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Strategies & Market Trends : Value Investing
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To: Mico Martinez who wrote (47149)3/23/2012 11:06:46 AM
From: Paul Senior3 Recommendations  Read Replies (3) of 78666
 
My assumption is that almost all these Chinese companies are frauds on the face of it, or fraudulently run. I've got the scars from purchases of maybe 15 of them to remind me of that. If my experience is typical, it's going to be difficult to get speculators/investors to get back into the Chinese market when there's no evidence that foreign investors can rely on financial reports or Chinese laws/regulations. So some of these "value" stocks may just languish.

In my experience, everything looked good -- p/e, roe, cash, debt, sales -- yet there's nothing that the investor ultimately gets other than creamed as the truth comes out. My feeling is that the people running these companies will eventually go to the next higher level of fraud -- give "investors" something to draw them in so as to prop up the stock price while the fraud continues. And that would be a cash dividend -- if the real company owners haven't siphoned the cash off the books yet.

I'm guessing the Chinese managements haven't wanted or needed (or been able) to institute a dividend, and so any Chinese company that now actually does share some of the profits with a cash dividend to small investors might be looked at as 'possibly' legit and maybe a possible speculation. For me, I only hold one mainland Chinese stock -- and it's just a few shares as a speculation -- XIN. finance.yahoo.com
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