The document summarizes observations about China's stock market volatility and its potential impacts. It notes that China's A-share market, accessible mainly to Chinese citizens, saw a 30% correction after rising 130% in the prior year. While the sell-off spread to other emerging markets, its effects were most significant in China. The document asserts that though Chinese officials are concerned about the plunge, its real economic impacts should be limited since less than 10% of Chinese households own stocks. It concludes by expressing continued confidence in China's economic growth.

1. THE CHINA SYNDROME
The Stanley-Laman Group manages portfolios that invest in equities listed on foreign exchanges
trading in local currencies across the globe.
Thus, when events such as the Chinese Stock Market crash are reported, we directly experience
the impact of these events and are active in both assessing and managing their impact on behalf
of our investors.
As we observed the news regarding China’s stock market volatility and knowing full well that
the financial press thrives on sensationalism, we felt that the following observations would be
useful for investors.
 The most significant of the pullbacks occurred in the China A-Share Market, generally
accessible only to Chinese Citizens and select institutions
 Prior to correcting 30%, the market was up +130% over the past year
 The Chinese market plunge followed moves by regulators to limit ownership of stock with
margin financing and speculation
 The markets have rebounded quickly
 While the sell-off has had a bit of a spillover effect to other Emerging Markets, it has not
been at the level of the impact on the A Share Market
 China reported second quarter growth of 7%, as better retail sales and factory output in
June suggest efforts to bolster the economy are gaining traction
 While Chinese officials are concerned about the plunge in the market, the impact on the
real economy should be limited as less than 10% of Chinese households own stocks,
compared to over one third of households in developed markets
 China is adding approximately 30 million new individuals to their middle class annually;
consequently, a large portion of their investing citizenry are newcomers to capital markets
and are perhaps more prone to making investment decisions based on emotion,
speculation and rumor (although the U.S. seems to have no shortage of this as well)
 China overtook the U.S. as the World’s largest economy in real terms in 2014 ($17.6
Trillion versus $17.4 Trillion)
 86% of the World’s 6.07 Billion People reside in emerging markets with China being the
largest
 And while growth may be slowing, we remain reasonably confident that the Chinese will
continue to eat, travel, work, entertain themselves, educate their children, require clothing,
etc.
The preceding represents the opinions of The Stanley-Laman Group, Ltd., a Registered Investment Advisor, and
is not intended to be investment recommendations. Strategies outlined and the views expressed offer risk of loss
of principal and are not suitable for all investors. Investors are advised to consult with qualified investment
professionals relative to their individual circumstance and objectives. The portfolios mentioned are a private
placement available to accredited investors and is sold by prospectus only.