I was thinking yesterday. Perhaps there is a direct relationship between the share price and people's expectations. What I mean by that is, you can exclude all other factors including fundamentals and sentiment etc.
Ok. So, expectations are very low here of course because Solomon hasn't delivered anything these past 2 years. Expectations have been going down, as well as the share price. Nevertheless, we are up 100% from the low and the reason for that could be expectations that Solomon will not dilute recklessly going forward. How am I doing so far?
Let's take a look at Netflix. Expectations are high. As Netflix will conquer the world and make all shareholders filthy rich. lol. Hence, a super high valuation. Fundamentals? Don't matter.
Now, let's take a look at Yasheng Group. Well... it's dark. Expectations are extremely low given that none of these Chinese companies have ever given us anything back, especially the ones that went dark or were deregistered. You cannot have lower expectations than this stock. Hence, it is even cheaper than SIAF. Fundamentals don't matter. Not even sentiment matters here because there is no sentiment.
How is my theory doing so far?
If I'm right about this, then all you have to do is look for companies where market expectations are WRONG, and invest your money there. You still need a bit of luck of course. So, Solomon could still deliver, the F-1. He could still do an asset sale. And HERB may very well deliver as well. For reasons I will not go into now.
As for some other stocks in the China sector like CCCL, CREG or companies that have VIE's, you are wasting your time as there is nothing to gain. IMO.
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