Replies to post #75613 on China Growth Stocks

[Michael Anderson]

Even with filings, I believe it doesnt meant that the company is 100% legit, so there is even risk with that and companies could start using these to fool investors if they believe that this will show their legitimacy. ONLY trading can be done in this space for now or a very very small amount of risk for a long term investment as some will definitely pay off, but many will bite you in the ass. Due to the valuation it is easy to get attached to these companies, but again, it is only worth trading and it will be awhile before that changes. Even if a company ends up being legit until there is more clarity, when there is a big rise, you take a chance of holding and an attack coming to bring the stock price down or the companies could say screw the US investors. So it is even risky to hold what may end up being legit companies

[Rames]

Don't forget that "informed decisions" won't lead to 100% safety with your investment. Whatever companies will put out can also be questioned for legitimacy, but it would be a start to improve transparency. Even a company that I believe is one of the safest in the CGS space got under heavy pressure last week (CAST). Recovered nicely on Friday, though.

Let's assume a 50% fraud ratio in the CGS space (I believe that this is too high, would mean 500+ Chinese companies listed or quoted in the U.S. were frauds), and you pick 10 stocks where you see a easy chance for a double in a normalized market. Good chance for a nice overall profit if your research is good enough.