Reiterating Paul and Jurgis on Chinese stocks,
I have taken a show-me-the-money approach and have managed to do pretty well avoiding the scams. If a Chinese company is at no-brainer valuations and not buying back stock or paying substantial dividends, it is either a fraud, incompetent, or the owners are running it as their own personal piggybank.
I don't think you want to take the risk of investing in any of those three situations regardless of valuation.
This approach has served me pretty well. After a couple of small positions (and losses) on some apparently fraudulent Chinese companies, I have made decent money on CCM, XIN, GAME, and a few other Chinese gamers. However,I give these companies a very short leash. XIN did some some stuff I didn't like, so I sold out. Actually, I don't own any pure Chinese stocks at this time.
MC |
