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Dollar vs. Yuan vs. QE
Just one question:
Suppose Fed's QE increases the US money supply by 10% or 1T (both are make up numbers.) How much money China has to print in order to maintain the PEG?
1) The same amount as US (USD1T or RMB 6.xT)?
2) 10% of Chinese money supply?
3) 1.5% of Chinese money supply?
I do not know the actual answer but here is my guess for the correct answer: about 1.5% of Chinese money supply.
China only needs to print enough to maintain the net of Export/Import, which is about 15% of the economy.
I assume that Chinese only need to print enough money 10%*15%*Chinese money supply, or about 1.5% of Chinese money supply.
So I agree with Fernando. I do not believe that QE2 will have a 'higher impact' on inflation in China compared to the US.
Rodman Note - Great article.
Glad to see that many US listed Chinese companies are very long term focused. That's the only way to greatness.
SIAF - Agree here. Chad is very good as an IR. He understands investor psychology.
Talking about bottom fishing: I had standing orders progressively below the trading prices (lowest prices were 0.10x) with the intent to catch the flash crash when the presumed lawsuit announced. Just image that I could have bought a decent size of SIAF at 0.10.
Although my actual holding of SIAF is relative small, I am still happy with the way SIAF PPS traded.
UTA - Rato, you message seems to be strong and rushed. I would suggest you to get to know Chinese travel habits a little more before sending out messages like this.
1) There is nothing weird about packaged tours. In fact, it is arguably the most popular ways for regular Chinese to see the country and the world. Online travel maybe popular for business travelers, but packaged tour is the meat and potatoes of China's growing travel industry.
The business values for a package based model: Majority of casual travelers in China uses packaged tours. a) By joining a packaged tour, you are provided with transportation, lodging, tour guide, and vol discount for food and meals. b) The economic values is enormously better than individual/separate bookings on hotel/airfare/meals/etc. c) You do not have to worry about details, just join the tour and enjoy. d) Chinese likes to be in crowd. That's why group travel is very popular. Even singles/couples join groups created by the travel agencies. All group tours are packaged tours. e) Tours to Korea/Japan/SE Asia/Taiwan are very popular. Millions travelers are travelling to those areas. Growth rate are about 100% each year. Almost all of those tours are packaged tours.
2) Online travel - For a relative small player like UTA, its website is actually pretty good. Better than 99% of its competitors (the travel agencies and like.) Sure its site is not up to par with eLong/Ctrip. But it is decent and has fair amount of traffic.
3) Equity dilution - Sure there are dilutions. Travel is a very segmented industry in China. UTA is try to consolidate and become a large player. You may or may not like this model, but there is like wrong with this model as long as both rev and EPS are growing.
4) Auditor. The new auditor is actually large than the one replaced.
UTA - I added another 1K at 4.43 to test if there was a major short seller. UTA is my biggest holding now since I loaded up during the attack. The last time I have this much UTA was May 09, during the period of reverse split/uplisting.
A PE of less than 3 is a very good value for an NYSE stock. The PE is about 1x if you back out the cash.
The shorts' story is pretty weak to start with. So I am not worried about the downside.
Value - I appreciate your tireless works on behalf of the longs on CCME (and many others Chinese small caps.) But frankly, I would not take shorts' innuendos seriously. I do not feel the needs to defend or react CCME at every situation.
At this moment, shorts are shorting CCME for one reason, and one reason only: because they COULD get away with it. It is shorts' goal to keep an underground mud fight so in the end, everyone is covered with mud, and everything regarding CCME is muddy.
I would suggest the longs to take the high road on this one. Instead of responding to every bit of innuendo, we can just talking about positive cases, educate the people regarding the viability of the LCD ad model in Chinese market, and be confident, unwavering, and unyielding.
I am pretty happy with my CCME positions. I have an almost non-existent chance of losing of my investment 100%, but a good possibility of getting 6x to 10x returns within 18 months. I like the risk vs reward here. Period.
SIAF - 1.57.
Amazing strength. Thumbs up for Chad.
BIDU - GS lift target.
Comparing BIDU to Chinese small caps - Drought and flood, Yin and Yang, ...
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Goldman Sachs analyst James Mitchell this morning repeated his Buy rating on Baidu (BIDU), raising his price target for the China Internet search company to $105, from $90. (He needed to do something, with the stock yesterday closing at $96.22, above his old target.
“We believe Baidu has experienced not only acceleration in its rate of revenue growth, which we expect to slow [starting in Q1 2011], but also a sharp improvement in the quality of revenue growth, which we expect to persist,” he writes. Mitchell adds that the stock continues to look attractive, given solid near-term earnings trends, and PEG ratios of 1x 2011 and 0.8x 2012."
I read through the seekingalpha article. To be frank, it is a rather confusing article. I do know understand author's main points. Maybe the first sentence of the last paragraph is all you need to read.
"In conclusion, the reverse merger space is fraught with risks for both longs and shorts, as evidenced by large losses as well as massive gains."
Actually, the author can prove this point by doing a three year chart for almost all of the small caps. It does not matter weather the stock is US or China, reverse merge or not.
UTA - 4.79, back to pre-attack level of 4.77.
All those shorts who followed the original attacker are losing money now.
GFRE - Come on Joe, at least admit that your timing for this particularly trade is not right.
You shorted GFRE at 7.19 and tried to add your position at 7.4. The real time PPS two days later at 8.09.
Taking cover (should I say covering?) in a hut near a mountain.
But seriously, the short is still very persistent here, judging from the fact that CCME made to the naked short list for 4 days.
Where is JJ Truth???
It is sure nice to see many of the CGS stocks are marching up over the past two weeks, beating the market handily for a change. All the TALKS about how smart the shorts are do not hold water when the market sentiment turns.
YUII - the techno chicken wakes up and runs like energizer bunny.
UTA shows considerable resilience in the face of attack over the last two weeks.
CCME: trading up for six consecutive days (a major change of behavior.)
NEP - 6.37. Another nice up day. I sold my $4 trading shares too early (at $5.5).
CNAM - I am amazed by the non-stop purchases by Worden. It seems he will take over all the float.
LLEN/PUDA - Up. After an S-1, LLEN is still marching up.
SIAF - Taking a breadth $1.35-$1.40 range, after a fantastic run from $0.5.
Smaller OTC stocks such as LTUS/CKGT/HFGB/CHGY: PPS stabilized and inch up slowly.
Major stocks under short attack: RINO/CAGC/UTA/FUQI/CGA/CCME all shows strength. FUQI is still holding well even after receiving letter of non-compliance.
Rich like one of the following?
1) You are able to upgrade the next take out dinner from pizza hut to a steak house, or
2) You are able to afford a new hut in the mountain near Joe N. or
3) You will get Warren B and Bill Gates' invitation for next charitable party for zillionaires when they visit China.
CCME - Puts
My schwab shows about the same open interests as yours.
I am not so worried about it though. People buy puts for a number of reasons, not all of them are for shorting. Plus, the buyback program will put a level of support way above 7.5.
CCME - Puts
My schwab shows about the same open interests as yours.
I am not so worried about it though. People buy puts for a number of reasons, not all of them are for shorting. Plus, the buyback program will put the a level of support way above 7.5.
No, your "best technical analyst" in this country did not call the stock correctly. If my recollection is right, he made a call for CCME to go down to $1.
Calls like this went beyond reasonable technical analysis or chart reading. If Stephen WAS one of the BEST, he is no longer from that point on. Even AmericanBulls.com was more accurate than him.
Nobody, and absolutely nobody, could read from a chart and declared that a stock was going to lose 90% of its value.
Mauiguy - good post. Thanks for sharing.
CCME - Longs firm up and shorts go naked
It is interesting to see that CCME's recent performance.
After the company announced its buy back program, the stock prices jumped for about 1-2 days. Then the shorts went to hyperdrive, brought it down. However, the shorts were unable to keep the price down. Over the last four sessions, the PPS went up signifcantly from under 8, to 9.47, or about 20%.
Now the shorts go naked. Naked shorting is illegal, but the shorts are doing it anyway. It ran out of ammunition.
CCME, a stock with great fundamental but notorious weak technicals, is finally on solid technical ground:
1) This morning's PM: PPS at 9.71, back to 50 day MA. A major mile stone.
2) SAR trigger yesterday.
3) All major technical indicators such as MACD, OBV, ChiOSC, A/D, are in great shape.
In other words - Longs are firming up, and shorts are in retreat. The buyback is having its positive effects.
CCME - I think the 15% is annual yield. That means if the short covers in 1-2 months, the borrowing cost is about 1-2%.
CCME -
This is the first post actually with some arguments into why CCME pps should not go up.
Unfortunately, those arguments seem to be very wrong.
- CCME diluting: what dilution? CCME's PE is so low that the dilution argument is very invalid. Plus, CCME had just pledged to use exactly the same amount as the proceed ($30m) to buyback shares.
- "The reason is that Chinese companies with the exception of SIAF are just out to milk American investors and speculators."
You may want to get your fact straight before making such a wholesale accusation:
1) Large Chinese companies such as PTR/SNP pay very decent amount of dividend (with annual yield of as much as 10% at one time until their PPS went up.)
2) Even MSFT/GOOGLE/DELL/CSCO/Oracle and almost all growth companies in US do not pay dividend during the growth period. Most of them still do not while their bank account is as large as the GDP of majority of the countries in this world. That's how the capital market works as designed by US and Wall Street. It is very disingenuous to single out CCME and Chinese small caps.
CCME - long and short
Is it just me? Somehow the tune of many posts on this board has changed to serve the shorts' interests. Now CCME needs to "prove" they are legit. And share buy back does not do it. Only divi does. (When company announces a divi, I am afraid another excuse will be found.)
Why CCME needs to "prove" they are legit? If anyone do not believe in big 4 auditor as well as multiple due diligences by the SPAC and STARR, then present the evidence. CCME had already proved they are legit multiple times.
I have no problem with people who take short positions, but it is disingenuous to be short while talking like a long. If you are an actual long, you do not have to repeat the rumor. Actually, there is not even an rumor.
680B Yuan = about USD $100B
UTA - HOD at 4.40.
A good 35% increases from LOD two days ago at 3.25. The 5 min chart looks very strong.
So far, the attack on UTA appeared only very modestly successful on the first two hours of the attack - The stock dropped sharply on the first two hours of trading on 9/15. It has been bouncing back ever since.
The company's response so far is very muted.
CCME -
I rarely browsed yahoo board but I do it once a while just to check what's going on there.
Two pieces of information stand out,
1) Going private rumor -
Someone wrote that CCME and Starr are talking about buying all the shares and going private. Maybe IPO at HK or Shanghai at a late date.
It is just a rumor. But if I am the CEO, I would be very tempted to do it. It makes more sense than simple share buyback or dividend.
2). HK interest rate
Someone post the link for HSBC - HK's biggest bank.
http://www.hsbc.com.hk/1/2/hk/investments/mkt-info/deposit-rates/interest-rates
You can check the interest rate there. Fixed deposit with a 12 month will give you a grand total of 0.20000%, a 6-month deposit will give you 0.05000%. Fantastic rate of returns. Wondering if they tax you over the interests.
Reverse merge to NASDAD/NYSE by Yanchang? (LPH will be trading there in 3 years.)
Yanchang Oil
It seems to me that Yanchang is modeled as PetroChina (PTR), and SinoPec (SNP). PTR/SNP are huge companies with rather extensive business models - they have oil/gas fields, drilling operations, refineries, and gas stations.
LPH, on the other hands, focuses on the storage and distributions of oil to consuming companies such as power station, factories, and gas stations. It does not compete with PTR/SNP/Yanchang. It complements them.
The oil industry is a huge, vital, and fast-growing sector in China. Companies such as LPH can survive and thrive for a long time in this environment.
CCME - great article.
SIAF - Of course not. I am not a lawyer and proudly so.
Frankly speaking I was waiting for your lawsuit to load up the truck. I had open orders at both 0.40 and 0.25 for a long while.
Talking about lost opportunities.
"Please don't tell me that you think that's how it works ........
SIAF - Interesting observation.
Now Joe has no basis for his delayed lawsuit. His loss of $30K would be back if he held the stock.
UTA - Green.
So short is out of steam very quickly here.
I tried UTA's Chinese web booking site with a friend. It works and have a lot more options than the English version.
CCME stock buy back -
Company designated up to $30m for stock buy back.
http://finance.yahoo.com/news/China-MediaExpress-Announces-bw-2470497420.html?x=0&.v=1
Does anyone know the actual float? The float is 9.03m shares in Yahoo.
Assume at $9 per share, USD$30m = 3.33m shares. That's about 36% of the float.
Adding the 3m short interests. We are talking 70% of the floats will be repurchased.
Too bad my $7.5 bid was not filled yesterday (7.6 was the low of day).
CHBT - No I have not seen the latest website from shorts. I do not own CHBT so I was not checking regularly.
Judging from the sound of pop'in up of all those new websites dedicated to the short positions, it is apparent that shorting Chinese small cap is a real business now.
I may visit Shanghai next month or so (I am still planning.) If I do, I will check a few of those locations.
Isn't CHBT's investors' conference coming on Sept 20? It will be an interesting bus tour.
Retail outlets - CHBT
Rebert Hsu specifically mentioned that CHBT uses a store in a store concept. If that's true, it is very different than the simply "shelves space" within Carrefour. And it is perfectly OK for CHBT to the retail outlets terminology.
The shorts intentionally confusing retail outlets with individual stores.
Nows lets look various retail options from a manufacturer perspective:
- No dedicated shelves - The manufacturer sell goods to the retailer (either directly or via distributors), and the retailer decides on the display and sales of the goods
- Dedicated shelves - Manufacturer contracts and pays for shelves space, but retailer decides on the prices. Retailer makes money on shelf rental (sort of selling ads within a store) but takes the risk for profits/loss of the products. Soft drink companies in US sometimes uses this model.
- Dedicated retail outlets or store within a store - Manufacturer rents shelf space and sales counter within a store, it sets product prices and takes the risk for all the profits/loss. (In US, this was actually the original format for "department" stores. You can still see the elements of this format on the walk ways of the many shopping malls, where a telecom company with a counter selling cell phones/plans. This format is quite popular in China.)
- Dedicated stores: the manufacturer opens and manages individual stores.
I guess the main difference between you and me is that when I started a virtual portfolio, I started with an initial capital of $100K, and you obviously started with $m with $600K of CCME in it. The second difference is that I will not claim to be long if I short a stock
Your list of "questionable" things have nothing do with the company itself.
The Form 144 registers the shares so it can be sold, not necessarily being sold. There is a major difference here. The form 4 was not done by the company.
Superman/Pmony - Why they become a "questionable" thing for the company?
If you do not like the stock, you can easily make a sell in your virtual portfolio. It does not cost you anything when it comes to virtual trades. If your broker accidentally charge your $10, call their help desk and you will give you the refund. It is not fun when a virtual trade turns into a 10% loss ($10 out $100) in your real account.
Can you list the questionable things that are going on with CCME?
PS. For a person holding $600K worth of stock, you certainly have a way to discredit your own holding with negative under-tone in all of your postings. Of course, there is no real loss in any paper holdings. That's the beauty of virtual trading.
I agree with every one of your sentences in this message of yours except the first one.
However, quotes and link you provided in your prior message does not contain anything meaningful that really serves the high purposes you mentioned. The tweeter link shows a person (LegacyTrader) mindlessly bashing Chinese small caps with no inside information.
CCME -
Obviously a small fund that are part of the gang of shorts intending to ruin Chinese small caps with rumors and innuendos.
Why polluting CGS board with messages like this.
CCME - Changsha is a major city in China and is the capital of Hunan province. Changsha has 6 million people, Hunan has a population of 61 million.
It is only "small" comparing to other mega cities such as Shanghai and Beijing.
Changsha Huanghua International Airport is a regional hub for China Southern Airlines, one of the big four airlines in China.
CCME news shows good progress and sets stage for other airport bus routers in Central China.
CHBT retail stores from the company website
Here is a list of companies' retail stores per CHBT's website:
http://www.chn-biotics.com/c4426/c4435/default.html