Treit, the earnings and PE of this company do not make a whole lot of sense, so there are other things going on. Let us consider a few.
1. The sector suspicion, which I have talked about before.
Clearly it plays a major role. I do not see that changing at all. Why would it? Several months ago on this board I posted at length about the structural deficiencies of american citizens investing on U.S. exchanges in small chinese companies doing business inside of china. and, these deficiencies are pounced upon by shorts, who in turn use the internet to full advantage to spook retail from ever investing in even the solid companies, presuming there are some. But the shorts smell out the structural deficiencies and pounce, and the deficiencies are very real.
2. We are in a larger bear market, which is in the process of pulverizing the remaining few investors who might believe in the larger theme in this area, a variant of the china miracle. In short the audience for this stock is getting financially destroyed on the home front. It is my strong belief that this will get much worse as the bear gets stronger and stronger. Hence the drip down in price. Money is leaving, the deflation is picking up steam, and europe, and the swedes in particular, are not immune.
3. As the great bear gets stronger, and the western debt bomb is seen for what it is, in much clearer focus through the web of western government and wallstreet dissembling and lies, we will begin to see something in the larger stock market that is all too apparent in china small caps: crooked books. CROOKED BOOKS IN THE RUSSELL 2000, THE S AND P, THE DOW, AND EUROPEAN EXCHANGES.
We just had a small glimpse of what is coming with Mf Global and Corzine. We had enron and a host of others in 2000, at the bulls peak, we had Lehman and the banks just after the bulls double top in 2008, and as western stocks decline and come under attack, we are going to see a lot of crookness coming to the front lines. It was rampant in the thirties, and my view is it is absolutely inevitable. The finance guys who have been running america simply must be crooked, there is too much opportunity to lie, just like in the thirties...and with 30 trillion in derivatives, richard russell estimated recently 50 trillion, but who's counting, the opportunity with this sort of paper being pleged and repleged and repleged ad infinitum, is inevitable.
4. Western stocks are being repriced to a time before the debt bubble. The PE's will be cut to pieces, back to the early 90s, and PE's in the thirties were sub 2 for larger companies.
To me it will end in a huge crisis of confidence, where publically traded instruments are viewed with great skepticism and mistrust, as the Great Bear picks up momentum. So in a sense, the little china small cap sector is just an appetizier to a main course which is just now starting to be played out in the west, and this will all take years to unwind
to me, in appraising this situtain, I can see there are two schools of investors in this sense: those who focus on the macro picture, and thos who focus on a companies micro internals. The first group survive, but barely survive, in a bear market, and they are almost irrelevant in a bull market. The second group, which are the investors who invest in SIAF, get destroyed financiall in a bear market, but prosper enormously in a bull market. Me, I am closing up my stock account on this coming monday, not transferring the money out of it, I am closing it till approximately this time next year. My call, and that of people I deeply respect who are light years ahead of me, is that the bear will take us to next lows on the S and P in the next year. These people, by the way, are all self made market millionaires many many many times over, people like Richard Russel, Jimmy Rogers, Doug Casey, and perhaps the greatest trader in the last hundred years, a young kid named Attila Demiray....all say we are going to Hades....Say, 600 on the S and P...which will put Siaf at maybe 15 cents, maybe, regardless of its earnings...
I hope you and these are terrific people do not lose it all, but it is a fact that people who stay long in bear markets pertty much do lose most of it. The thing is, the keyensians think, or rather thought, they could elminate the business cycle, this is why we have had so few recessions, and no depressions, in the last so many years...but they are wrong. It would have shocked a man like Harry Truman, one of the last great american presidents, to think that it was the role of government to partner with wallstreet so that people in general, and the "big money boys" (truman's phrase) would not lose money from their bad investments...and that the way to protec the big money boys would be to destroy the currency and subsidize the banks with the middle class's hard earned savings, but that is the govenment policy of this increasingly facist and socialist government, with america following the europeans in some ways....
It is all in the process of unwinding, and we will probably lose the next 5 years at least doing it....and the S and P will reach a bottom at some point when it intersects with gold at around 450, and all of this will affect SIAF, presuming it is a viable company in the first place.......
The stock price should be talking to you. You know it is funny, the more people know about trading stocks and companies and what not, the more inclined they are to try and fight a bear market, rather than lose money, and simply get out. In this way, you lose a lot less money, the less you know, because you will get burned and stay away.....
This will be the greatest Bear Market that anybody alive has ever experienced, and that includes Russell, and I believe he was born in the 30's, at least this is what he says..
Hubris
