China Growth Stocks

[ratobranco]

"That's why there's no such thing in the stock market as loyalty"

You're definitely right here. Loyalty is dangerous.

But how about commitment? By commitment I mean willingness to stick with a company that continues to perform above and beyond reasonable expectations?

If CCME were putting out garbage earnings, the first thing that I would tell anyone to do would be to dump it and move on.

But the management is firing on all cylinders, doing everything that they should be doing, building and growing an extremely profitable business. And it just so happens that the stock is technically broken, and that short sellers are having a hayday in it.

MUST people play along with the short sellers and sell their stakes as well? Unfortunately, the answer seems to be yes, which is why we are in this vicious circle.

It is a prisoner's dilemma.

http://en.wikipedia.org/wiki/Prisoner%27s_dilemma

If we would all just hold, we would be fine. But everyone thinks everyone else is going to sell--and so, in a self-fulfilling prophecy, everyone sells.

Unfortunately, there is no way around this problem. I point it out simply in appreciation of the irony.

What we need to do is bombard Jacky with requests to inititiate a buyback program with a quarterly stock dividend--a plan that would crush the nuts of anyone stupid enough to go short. With a buyback + stock divdend plan, management could make the price go to whatever reasonable value they wanted. 15.00? 17.00? 20.00? No sweat.

Unfortunately, my fear is that until Zheng gets his earnout shares, those requests will fall on deaf ears.