China Growth Stocks

[ratobranco]

Caveat on my picks. You make each name a small enough position, maybe .25% of a portfolio, so that you don't need a stop. We know these stocks are going to zero, but we obviously don't know where they will go in between, so we need to take positions that are either sufficiently hedged (very difficult given the exorbitant price the market demands to hedge China RTO plays right now), or we take a small enough position that a 200% move or so will not be excessively painful.

I admit that's not necessarily the best of offers, much better would be for it to be Feb 2011 right now so we could short at reasonable cost with huge potential downside. But you have to take what you can get.

My point is that just because it is hard to make money on the short side in these fraud names doesn't mean that you won't lose all your money on the long side. You will, believe me. All of it. If you disagree, buy a couple of these turds, tuck them away, and come back in a few years. One share won't even be worth enough to buy you a postage stamp.