Replies to post #85191 on China Growth Stocks

[Michael Anderson]

I am also still very surprised how many people are still going long the space. It is good for short term trading, but you have to be on top of things, take all emotions out, and be pretty saavy. I think there is a ton of fraud still, much that will be uncovered and much that will not be. There is going to be a black mark on the space for awhile. I know I cant do the necessary research required to come to a quality decision in the space to even come to an conclusion to invest in it longterm. If I were to invest here I would much rather follow the money and those doing the proper research. It is much easier to make money that way and not a lot of effort is required, but that is a lot short term as well. Of course there still could be some winners in the long run, but with such risk and not really coming close to knowing what will happen or what these companies will do, it is too big of a chance to take.

[rru2s]

Rato yes I have and do invest in the Hong Kong exchange stocks, but there are hidden frauds too...for example, the Lin Brothers own Wuyi Pharmaceutical on the Hong Kong exchange, and they shared an office and also own CCME. QED.

That being said, I like some of the state owned companies on the Hong Kong exchange....China Oilfield Services HK:2883 is much, much more liquid than its corresponding US ADR, CHOLY.PK.

The two drawbacks I have about hong kong exchange are (1) finding the news of the day applicable to a particular stock - locals are creating the volume and are trading on the day's events and someone investing from the US has very little idea what is causing their intraday swings at around 11pm or 3am Eastern Standard time. (2) I hate having a 1% foreign currency exchange fee on top of a trading fee of $300 HKD (at a conversion rate of $7.716 HKD/USD).

[joenatural]

Even if that were true, I'm 100% confident I will continue making good money trading the sector. The last 4 weeks have been great ......

"I have come to the conclusion that close to 100% of the companies are fraudulent. Maybe a full 100%."

[ratobranco]

Forbes MCOX pump

http://www.forbes.com/sites/ericjackson/2011/09/01/mecox-lane-is-a-bargain-here/

The folks here who are desperately in search of a US-listed Chinese stock in which to sink money should look at MCOX, as I said awhile back. This company is extremely cheap on a valuation basis. It may go to zero, but it could also go to $10. And unlike the rest of the garbage trading in this space, it's not a fraud, as it has received large equity investments from SINA as well as Dongxiang (at much higher prices than the current price). Those are two very well-known and well-respected Chinese companies. Unlike US investors, they aren't going to be fooled by exported scams, so the fact that they put real money in this company (at $6, with the share price at $2.40 right now) means they know it's not just another RTO/IPO fraudcap like CCME or CTE seeking to get rich off of US enthusiasm for all things "China."

If I were bullish on the overall markets, I would start a small momentum-based trading position now, then wait for the coming earnings report, and if it indicates a turnaround in the business and is well-received by the market, then I would build a more serious position. It's difficult for American investors to understand and analyze the trends in a business like this, given that we aren't on the ground to read the pulse of Chinese consumer trends, that is why technicals are important to watch. If this stock puts out what appears to be a good earnings report, and then starts showing price strength with volume, then you want to get in on that as quickly as possible.

As it turns out, I'm not bullish at all, I think the markets are very dangerous here and headed much lower over the next year, including China and the emerging markets. The evidence for a coming global recession continues to build, and if that is the outcome, MCOX will get slaughtered like everything else. So I intend to wait for more carnage and a cheaper price.