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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (42581)	5/10/2011 11:21:54 AM
From: Jurgis Bekepuris	Read Replies (1) \| Respond to of 78464

I would be more happy if I were right on other Chinese small caps. :/ Looking back the correct approach was to avoid all the RTO space + some small cap native IPOs. No income/balance sheet analysis was enough to find good RTOs. The ones with lousy income/balance sheets were as likely to collapse as the ones with great financials. The jury is still out if there are any that were good investments long term. In toto, I made money on GFRE even with disastrous last sales. These gains may cover my losses in other Chinese RTOs. The margin of safety - buying really cheap - applies even when companies are fraudulent. ;) Especially if you sell on various runups. ;) I still hold bigger/institutional Chinese names: CYOU, GAME, PWRD, CHL.

To: Paul Senior who wrote (42581)	5/10/2011 11:40:22 AM
From: Madharry	Read Replies (1) \| Respond to of 78464

I dont know that the bad news is all out on this one. I too had concerns about the large a/r balances and exited this with a loss last year i think. The press release doesnt really explain the extent of their losses in my view and makes me really concerned about management, especially considering they didnt even bother with a warning. When I invested in the company it seemed like a logical way to play china over the next decades. just one more nail in the coffin that is investing in chinese small caps. Still suffering with my massive gfre position though. Seems strange to be having such a big loss on a company that supposedly has $2 in cash and is projected to earn $1.80 in 2011. At least the cpa hasnt quit and fidelity hasnt sold their position as far as i know.