My favorite investor, Warren Buffett, is warning investors that the Chinese stock market is "too hot". What does "too hot" mean? Isn't that supposed to be a good thing?

Well, according to Buffett, investors should be cautious when they see prices soaring. He just sold his 11% stake in PetroChina and is now on the hunt for "well-managed companies in sectors that he understood with an eye to investing for five, ten or twenty years."

Does this mean that Buffett believes PetroChina will sink in the next five years? What's really going on with the oil companies around the world? What is PetroChina up to? These are the questions that run through my mind and I wish that Buffett would have at least gave some kind of hint about what he knows.

I had no idea that U.S. citizens could buy Chinese stock, but I did read that if a company is listed in the Hong Kong market, it can be bought and sold by any investor. Find out more about the Hong Kong stock market.

I do agree that we should be careful when we see prices skyrocket in a short amount of time. There's probably alot of hype surrounding PetroChina which is causing this rise in price. Forbes is reporting that this is China's biggest IPO to date.

Photo: AP