OK, so is China really communist? Not from what I can see.
Just look at the IPO market. Yes, it's been sizzling.
And, of course, the latest mega deal is the public offering of Alibaba.com, which operates a sprawling group of fast-growing Internet properties.
According to a report from Bloomberg.com, the IPO surged from HK$13.50 to HK$39.50. In fact, Alibaba.com sports a market cap of a cool $25.7 billion. That is a thrill for Yahoo! (NASDAQ: YHOO), which has a 39% stake in the company.
Actually, Alibaba.com even has earnings. Although, at the current valuation, they are more than 150 times the market cap. That makes Google (NASDAQ: GOOG) look pretty cheap.
While China certainly has strong growth prospects, there are still risks. Can the country continue its torrid growth rate? What about political instability?
If you look at the history of US markets, strong IPO markets are usually a sign of excess and a top. So, investors should show caution.
And if you want to check out the IPO action here in the US -- which is not as frothy -- you can visit DealProfiles.com.
Tom Taulli is the author of various books, including The Complete M&A Handbook
Oil, the stock market and economic inconsistency
Is there a Bernie Madoff in your portfolio?
New McDonald's to include recharging stations for electric cars
