Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : HONG KONG -- Ignore unavailable to you. Want to Upgrade?

To: William Shen who wrote (1483)	3/25/1998 6:46:00 PM
From: Tom	Read Replies (1) \| Respond to of 2951

Thank you, Mr. Shen. I do appreciate it.

To: William Shen who wrote (1483)	3/27/1998 11:18:00 PM
From: ----------	Read Replies (1) \| Respond to of 2951

Mr. Shen: Without getting too technical, could you possibly mention some of the major differences in accounting methods you mentioned? While accounting standards are set & accepted for U.S. companies, I have never met a C.P.A. I did not have a friendly disagreement with. Deciphering a financial statement is always a challenge. One has to recognize which numbers are very difficult to manipulate and which numbers can easily be manipulated. Any input would be greatly appreciated. Regards, Doug

To: William Shen who wrote (1483)	4/1/1998 10:55:00 PM
From: Tom	Read Replies (1) \| Respond to of 2951

William: While pondering some moves, I reviewed your #1483. And now that I have a moment... Your statement that stock prices "are not supported by cash flow, but earnings growth" falls back onto my original concern; puts the cart before the horse, so to speak; is a bit myopic; and might confuse others. In the mainland system cash flow is thee issue. Yes, a company can enjoy a rising stock price based on published earnings. But too often, you might agree, it does not work that way. And what is it that drives the earnings? And what is it that propels the drive? If one were to pursue an investment based on earnings, it could also be at some juncture suggesting that it's the tail that wags the dog. Even as the shareholder who departed the annual meeting for the lobby prior to its ending, phoning his broker to say, "Production efficiency is 100%. Earnings are the best we've ever had. Sales have broken an all-time high. Sell everything. They just said it can't get any better." And as an investor, the moment I discern a problem in the cash flow column is the moment I begin to ask questions. It is also essential that people realise an important aspect of the China equities market at this particular point in time. Whether it be Shanghai Industrial, the Guangzhou group, Beijing Enterprises, or any one of a number of others; the enterprises they support are requiring enormous amounts of capital investment. The importance of this support can not be mitigated. The reason for this is that foundationally from supply to distribution the commerce system in China is still relatively weak. When Beijing speaks of funding infrastructure development, this necessarily includes commercial facilities of all sorts. It is too, as you say, that the numbers are often unavailable. Yet of the numbers that are available, there will be none more indicative of the company's present viability than cash flow. The ones you cite for SIHL are encouraging. People should know too that certain aspects of successful trading in U.S. equities, as well as what is learned of the U.S. domestic markets, will allow some to succeed in the China markets. It is also why some will not. Even as China has always been.