Replies to post #46556 on China Growth Stocks

[KurtNYC]

"Short CHBT at time of this post"

Maj, I have this right? CHBT was "Added to the GeoBargain list on July 14, 2009 @ $9.70" and as of now you are short CHBT?

[derek2000]

Geobargins

Maj, I used to be a vivid reader of your site and I have recommended your site to my friends. While I applaud your efforts to put more rigor on your research, the way you manage this exercise is less optimal.

In effect, you may have capitulated at the worst time. When the sector is at its bottom, you essentially told your readers that all Chinese bargains you wholeheartedly endorsed through a rather "rigorous" process were no longer bargains, but stocks with considerable downside due to unspecific accounting risks, and need to be re-vested.

Now the sector is crawling back up, some "bargains" which were longer become bargains again, only at a higher price.

The timing is very unfortunate.

[abh3vt]

Hmmm, Maj I was wondering when your site was going to have to more fully disclose its trading positions:

Positions: Long NEWN, DEER, CCME, CWS, CNVP, HFGB, SOKF, TSTC; Short CHBT at time of this post.

You say you guys aren't market timers?

We are not market timers so investors will have to make their own personal entry point decisions.

Of course you are! No shame in that; we all want to be on the right side of an investment. Who likes to buy in too early only to see something go down 25-35%? I think you have written some insightful stuff on the capital raising cycle and its impact on dilution and on fd eps growth catalysts. The larger question that you haven't answered is WHEN does the forward looking/thinking investor start to accumulate? Do you wait until the last few weeks before an earnings report that you think will be decent? Or do you start buying on weakness after the last disappointing quarterly result leading up to the beginning (hopefully) of a string of strong quarter eps reports that proves the thesis of decent forward eps growth?

I guess there is no definitive answer to that question. Too much depends upon overall market sentiment and individual company strengths/weaknesses that impact possible forward valuations (and thus margin of safety), and to some degree daily trading volumes. From your list, I like and am long CCME, CHBT and SOKF. I think DEER is overvalued a bit at present, TSTC has a big shelf hanging over it. CWS had a shelf and was pricing an offering but decided to pull it back, given market conditions. Doesn't mean they won't come back later.