I truly believe that Shanghai will develop into Oriental Manhattan, maybe even better. However, if I want to invest in Shanghai, I am facing two choices. One is jumping in now and grabbing a condo. The second choice is waiting for the coming financial crisis.

Let me present analogy. The analogy can be found in the US. Is it better to buy in 2004 or 2005, or wait till 2008? Obviously, from what we have experienced, and from rear view mirror human always can see wisely, everybody would say it's better to buy in 2008, someone may even suggest later.

The same situation can be applied to Shanghai. Since Shanghai hasn't been through much of a crisis so far, and it may not come immediately. Rather than buying it now, why not wait till the crisis come? History tells us that HK housing value lost nearly 70% during 1997 Asian crisis. Why HK lost so much? because percentage of investor was too high. HK's housing market was basically converted into a "stock" market at that time. It behaved exactly like one in 1997. There will be a high risk that Shanghai's housing market may exhibit similar characteristics. In such high risk, high return market, I feel the best strategy is waiting for a crisis, the jump in when blood is shed everywhere on the street.

Another analogy to Shanghai market is Florida market. Florida market is an American version of high risk/high return market. When it was hot, it can be crazily hot, not any less in degree than Shanghai's, when it becomes cool, it may drop more severely than other regions. I don't see any reason Shanghai's market can be different. Investor percentage in Shanghai is probably higher than that in 1997's Hong Kong.

Another point to be aware of is that investing in Shanghai is a classical remote investment case for most of us not able to travel there often. It's not good to hold there for a long term like you normally do for your local investment houses. Shanghai's market should be best used for flipping, especially for us who don't live there. That furthers my belief that I will only get interested in Shanghai when crisis knocked it down to a bottom.

That being said, I have extremely high confidence toward China and Shanghai's long term prospect. That's why I will not be afraid to jump in during the bloodshed. Because I think Shanghai will not be like Japan and like Hong Kong. Shanghai has potential to come back strong from any crisis. Why? Shanghai's FENG SHUI is simply better.

We also must realize that China's financial system may be very hot, at the same time, it is very immature, it will need to have couple of crisis to help clean out the inefficiency and prepare China for better growth. That's why crisis will have to come, and need to come. It's only just a matter of time, may be in years. I have no hurry to get into Shanghai right now. I would rather focus on US market to look for casualty properties at super discount for the next 5-6 years. When everybody is getting out of Shanghai, I will get into Shanghai.