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Re: A deleted message

Friday, 04/13/2007 6:50:31 PM

Friday, April 13, 2007 6:50:31 PM

Post# of 172865
CHINA STOCKS AND THEIR RETURNS SINCE....

.... first being mentioned on this board. Everything you wanted to know.

Last night when I was referencing CAGC in the context of CESV, I mentioned that CAGC could be a CESV or it could go up over 100% like a dozen other China stocks we have had on this board.

So, I decided to look at that question. What I didn't do was take every China stock that has preceded ChVMC07. I mean there are a number of China stocks that have been on VMC in 2005 and 2006 that are not in this study. For example CESV (-100%) is not in it, but neither is AOB (+ several hundred percent).

I restricted the group to ChVMC07 (37 stocks). I searched VMC and found the first mention of these stocks on this board and noted the price at the time. Shown below are the returns at the highest point the stock has reached since the first mention - as well as the total returns as of now since the first mention.

The average return, assuming you sold at the high, for each stock is +114%. The average return as of now is +31%. The average holding period is 14 months.
      %High %Now        %High %Now 
HRBN +365 +340 CDGT + 0 - 79
CSCT +307 +300 BBCZ +210 - 72
FSIN +233 +221 CHBP + 1 - 70
SUWN +894 +212 CHID +235 - 66
JST +281 +183 CGRH + 62 - 65
ADY +282 +163 CHNG + 5 - 62
JADE +222 +160 CHAS + 0 - 49
TBYH +178 +148 CBAK + 49 - 42
TSTC +154 +117 CEDA + 29 - 40
XING +141 +111 PACT + 15 - 39
ORXT +127 +106 CKGT + 62 - 31
UTVG + 88 + 86 SEED + 15 - 23
NWD +225 + 74 DSWL + 3 - 23
CPHI + 62 + 26 SKBI + 8 - 22
CHME + 27 + 21 SORL + 18 - 15
CSOF + 23 + 16 MHJ + 14 - 1
CFSG + 28 + 5 CAGC + 67 + 4
Not in this group are 3 stocks from ChVMC07. ETLT and CXTI predated IHUB VMC and I cannot establish an initial date that they were brought up. Also NINE was impossible to search since there are a gazillion references to the word and I wasn't going to spend a week and a half finding the first on that referred to the stock.

ONE VERY INTERESTING ITEM FROM THIS LIST IS THE FIRST LETTER. There are 19 stocks that do NOT begin with "C". The average return to date on those is +92%. There are 15 stocks that DO begin with "C". The average return for those stocks is -9%! Is that a large enough sample to draw any conclusions. Perhaps not IF it were just an arbitrary letter. But, the letter "C" clearly indicates "China". Now, if you were a questionable company and simply trying to capitalize on the "China" craze, wouldn't you name your company "China ......"? I think so. On the other hand, if you were a legitimate company and you believed that you would succeed based on the fundamentals, wouldn't you name your company based upon the product(s) that you dealt with - like most companies? I think so. You can draw your own conclusions, but I think it is reasonable to seriously consider being less quick to jump on "C" China companies in the future than those without it. Also, keep in mind, the two companies I brought earlier as examples that are not in this list are CESV (-100%) and AOB (+several hundred percent). Just more evidence.

As I have argued repeatedly with respect to these China stocks, you MUST BE DIVERSIFIED or you simply take a chance of getting obliterated. Since it is difficult to verify a lot about these stocks, you have no choice except to take a basket of them - at least IMO.

FWIW: Here are my picks from China stocks in all PSL's. Exactly half (15) of my 30 original picks in the 5 contests have been China plays. The returns are as follows:
PSL1: CXTI +183% 
PSL2: CHID + 77% TBYH +83%
PSL3: BBC + 6% CHID -49% CXTI + 10%
PSL4: BBC - 59% TBYH - 3% CEDA + 25%
PSL5: BBC - 60% CAGC +14% FSIN +105% HRBN +71% SKBI -21% TBYH +61%
As you can see, I've had plenty of winners and losers. But, the average of these 15 picks is +29.5%.

IMO, you can't let the fact that a China stock may blow up on you (like some have) to prevent you from investing in them - UNLESS you are not willing to have a decent-sized basket of them. But, if that is the case, I wouldn't be investing in the markets at all. Nothing is safe enough not to diversify IMO.

Len


Warren Buffet: 5 minutes and 17 seconds of pure, unadulterated, bulletproof, flawless logic.
http://www.youtube.com/watch?v=QLD0p1QpcI8

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