A short-term hit is to be expected, you're buying during a correction. It's imperative you buy incrementally at set prices, you dont want to go all-in on any one day and hope to catch the bottom. These stocks can/will get cheaper if the market continues its correction, so plz buy incrementally or wait and chase them higher if you're concerned over a couple pennies.
I usually use 10-15% increments when I buy, and I buy more as it gets cheaper. There are always special situation stocks, like CCME is right now. For example, today with CCME I started buying around yesterday's avg low ... I started buying 75 shares at $13.15 i believe. Then I put up 50 more shares (125, 175, 225...) every .15 all the way down to $13.50 where I got my final fill. But that's just because CCME is a stock you can never have enough of right now. I dont mind paying extra fees, a couple bucks here and there wont matter when you're rolling in profits and the stock is in the mid-$20s later this year.
So, lesson is simple: Always have cash and buy incrementally. Use set prices and don't break your rules, you'll profit more in the long-run as the market almost always gives you a second chance to buy your favorite stocks at a discount.
i'd be very very careful
if we are topped out and now heading for the inenvitable next leg down these chinese high flyers are gonna get gutted badly
chinese economy overall will unravel with the next leg down as we head for a global depression of sorts
---------------
Contrarian Investor Predicts Crash in China
January 7, 2010, 5:40 pm
James S. Chanos built one of the largest fortunes on Wall Street by foreseeing the collapse of Enron and other highflying companies whose stories were too good to be true. Now Mr. Chanos, a wealthy hedge fund investor, is working to bust the myth of the biggest conglomerate of all: China Inc.
As most of the world bets on China to help lift the global economy out of recession, Mr. Chanos is warning that China’s hyperstimulated economy is headed for a crash, rather than the sustained boom that most economists predict, David Barboza of The New York Times reports from Shanghai.
China’s surging real estate sector, buoyed by a flood of speculative capital, looks like “Dubai times 1,000 — or worse,” Mr. Chanos frets. He even suspects that Beijing is cooking its books, faking, among other things, its eye-popping growth rates of more than 8 percent.
“Bubbles are best identified by credit excesses, not valuation excesses,” he said in a recent appearance on CNBC. “And there’s no bigger credit excess than in China.” He is planning a speech this month at the University of Oxford to drive home his point.
As America’s pre-eminent short-seller — he bets big money that companies’ strategies will fail — Mr. Chanos’s narrative runs counter to the prevailing wisdom on China. Most economists and governments expect Chinese growth momentum to continue this year, buoyed by what remains of a $586 billion government stimulus program that began last year, meant to lift exports and consumption among Chinese consumers.
Still, betting against China will not be easy. Because foreigners are restricted from investing in stocks listed inside China, Mr. Chanos has said he is searching for other ways to make his bets, including focusing on construction- and infrastructure-related companies that sell concrete, coal, steel and iron ore.
Mr. Chanos, 51, whose hedge fund, Kynikos Associates, based in New York, has $6 billion under management, is hardly the only skeptic on China. But he is certainly the most prominent and vocal.
For all his record of prescience — in addition to predicting Enron’s demise, he also spotted the looming problems of Tyco International, the Boston Market restaurant chain and, more recently, home builders and some of the world’s biggest banks — his detractors say that he knows little or nothing about China or its economy and that his bearish calls should be ignored.
“I find it interesting that people who couldn’t spell China 10 years ago are now experts on China,” said Jim Rogers, who co-founded the Quantum Fund with George Soros and now lives in Singapore. “China is not in a bubble.”
Colleagues acknowledge that Mr. Chanos began studying China’s economy in earnest only last summer and sent out e-mail messages seeking expert opinions.
But he is tagging along with the bears, who see mounting evidence that China’s stimulus package and aggressive bank lending are creating artificial demand, raising the risk of a wave of nonperforming loans.
“In China, he seems to see the excesses, to the third and fourth power, that he’s been tilting against all these decades,” said Jim Grant, a longtime friend who is also bearish on China and is the editor of Grant’s Interest Rate Observer. “He homes in on the excesses of the markets and profits from them. That’s been his stock and trade.”
Mr. Chanos declined to be interviewed, citing his continuing research on China. But he has already been spreading the view that the China miracle is blinding investors to the risk that the country is producing far too much.
“The Chinese,” he warned in an interview in November with Politico.com, “are in danger of producing huge quantities of goods and products that they will be unable to sell.”
In December, he appeared on CNBC to discuss how he had already begun taking short positions, hoping to profit from a China collapse.
In recent months, a growing number of analysts, and some Chinese officials, have also warned of the threat of asset bubbles emerging in China.
The nation’s huge stimulus program and record bank lending, estimated to have doubled last year from 2008, pumped billions of dollars into the economy, reigniting growth.
But many analysts now say that money, along with huge foreign inflows of “speculative capital,” has been funneled into the stock and real estate markets.
A result, they say, has been soaring prices and a resumption of the building boom that was under way in early 2008 — one that Mr. Chanos and others have called wasteful and overdone.
“It’s going to be a bust,” said Gordon G. Chang, whose book “The Coming Collapse of China” (Random House) warned in 2001 of such a crash.
Friends and colleagues say Mr. Chanos is comfortable betting against the crowd — even if that crowd includes the likes of Warren E. Buffett and Wilbur L. Ross Jr., two other towering figures of the investment world.
A contrarian by nature, Mr. Chanos researches companies, pores over public filings to sift out clues to fraud and deceptive accounting, and then decides whether a stock is overvalued and ready for a fall. He has a staff of 26 in the firm’s offices in New York and London, searching for other China-related information.
“His record is impressive,” said Byron R. Wien, vice chairman of Blackstone Advisory Services. “He’s no fly-by-night charlatan. And I’m bullish on China.”
Mr. Chanos grew up in Milwaukee, one of three sons born to the owners of a chain of dry cleaners. At Yale University, he majored in medicine before switching to economics because of what he described as a passionate interest in the way markets operate.
His guiding philosophy was discovered in a book called “The Contrarian Investor,” according to an account of his life in “The Smartest Guys in the Room,” a book that chronicled Enron’s rise and downfall.
After college, he went to Wall Street, where he worked at a series of brokerage houses before starting his own firm in 1985, out of what he later said was frustration with the way Wall Street brokers promoted stocks At Kynikos Associates, he created a firm focused on betting on falling stock prices. His theories are summed up in testimony he gave to the House Committee on Energy and Commerce in 2002, after the Enron debacle. His firm, he said, looks for companies that appear to have overstated earnings, like Enron; were victims of a flawed business plan, like many Internet firms; or have been engaged in “outright fraud.”
That short-sellers are held in low regard by some on Wall Street, as well as Main Street, has long troubled him.
Short-sellers were blamed for intensifying market sell-offs in the autumn of 2008, before the practice was temporarily banned. Regulators are now trying to decide whether to restrict the practice.
Mr. Chanos often responds to critics of short-selling by pointing to the critical role they played in identifying problems at Enron, Boston Market and other “financial disasters” over the years.
“They are often the ones wearing the white hats when it comes to looking for and identifying the bad guys,” he has said.
if we are topped out and now heading for the inenvitable next leg down these chinese high flyers are gonna get gutted badly
chinese economy overall will unravel with the next leg down as we head for a global depression of sorts
---------------
Contrarian Investor Predicts Crash in China
January 7, 2010, 5:40 pm
James S. Chanos built one of the largest fortunes on Wall Street by foreseeing the collapse of Enron and other highflying companies whose stories were too good to be true. Now Mr. Chanos, a wealthy hedge fund investor, is working to bust the myth of the biggest conglomerate of all: China Inc.
As most of the world bets on China to help lift the global economy out of recession, Mr. Chanos is warning that China’s hyperstimulated economy is headed for a crash, rather than the sustained boom that most economists predict, David Barboza of The New York Times reports from Shanghai.
China’s surging real estate sector, buoyed by a flood of speculative capital, looks like “Dubai times 1,000 — or worse,” Mr. Chanos frets. He even suspects that Beijing is cooking its books, faking, among other things, its eye-popping growth rates of more than 8 percent.
“Bubbles are best identified by credit excesses, not valuation excesses,” he said in a recent appearance on CNBC. “And there’s no bigger credit excess than in China.” He is planning a speech this month at the University of Oxford to drive home his point.
As America’s pre-eminent short-seller — he bets big money that companies’ strategies will fail — Mr. Chanos’s narrative runs counter to the prevailing wisdom on China. Most economists and governments expect Chinese growth momentum to continue this year, buoyed by what remains of a $586 billion government stimulus program that began last year, meant to lift exports and consumption among Chinese consumers.
Still, betting against China will not be easy. Because foreigners are restricted from investing in stocks listed inside China, Mr. Chanos has said he is searching for other ways to make his bets, including focusing on construction- and infrastructure-related companies that sell concrete, coal, steel and iron ore.
Mr. Chanos, 51, whose hedge fund, Kynikos Associates, based in New York, has $6 billion under management, is hardly the only skeptic on China. But he is certainly the most prominent and vocal.
For all his record of prescience — in addition to predicting Enron’s demise, he also spotted the looming problems of Tyco International, the Boston Market restaurant chain and, more recently, home builders and some of the world’s biggest banks — his detractors say that he knows little or nothing about China or its economy and that his bearish calls should be ignored.
“I find it interesting that people who couldn’t spell China 10 years ago are now experts on China,” said Jim Rogers, who co-founded the Quantum Fund with George Soros and now lives in Singapore. “China is not in a bubble.”
Colleagues acknowledge that Mr. Chanos began studying China’s economy in earnest only last summer and sent out e-mail messages seeking expert opinions.
But he is tagging along with the bears, who see mounting evidence that China’s stimulus package and aggressive bank lending are creating artificial demand, raising the risk of a wave of nonperforming loans.
“In China, he seems to see the excesses, to the third and fourth power, that he’s been tilting against all these decades,” said Jim Grant, a longtime friend who is also bearish on China and is the editor of Grant’s Interest Rate Observer. “He homes in on the excesses of the markets and profits from them. That’s been his stock and trade.”
Mr. Chanos declined to be interviewed, citing his continuing research on China. But he has already been spreading the view that the China miracle is blinding investors to the risk that the country is producing far too much.
“The Chinese,” he warned in an interview in November with Politico.com, “are in danger of producing huge quantities of goods and products that they will be unable to sell.”
In December, he appeared on CNBC to discuss how he had already begun taking short positions, hoping to profit from a China collapse.
In recent months, a growing number of analysts, and some Chinese officials, have also warned of the threat of asset bubbles emerging in China.
The nation’s huge stimulus program and record bank lending, estimated to have doubled last year from 2008, pumped billions of dollars into the economy, reigniting growth.
But many analysts now say that money, along with huge foreign inflows of “speculative capital,” has been funneled into the stock and real estate markets.
A result, they say, has been soaring prices and a resumption of the building boom that was under way in early 2008 — one that Mr. Chanos and others have called wasteful and overdone.
“It’s going to be a bust,” said Gordon G. Chang, whose book “The Coming Collapse of China” (Random House) warned in 2001 of such a crash.
Friends and colleagues say Mr. Chanos is comfortable betting against the crowd — even if that crowd includes the likes of Warren E. Buffett and Wilbur L. Ross Jr., two other towering figures of the investment world.
A contrarian by nature, Mr. Chanos researches companies, pores over public filings to sift out clues to fraud and deceptive accounting, and then decides whether a stock is overvalued and ready for a fall. He has a staff of 26 in the firm’s offices in New York and London, searching for other China-related information.
“His record is impressive,” said Byron R. Wien, vice chairman of Blackstone Advisory Services. “He’s no fly-by-night charlatan. And I’m bullish on China.”
Mr. Chanos grew up in Milwaukee, one of three sons born to the owners of a chain of dry cleaners. At Yale University, he majored in medicine before switching to economics because of what he described as a passionate interest in the way markets operate.
His guiding philosophy was discovered in a book called “The Contrarian Investor,” according to an account of his life in “The Smartest Guys in the Room,” a book that chronicled Enron’s rise and downfall.
After college, he went to Wall Street, where he worked at a series of brokerage houses before starting his own firm in 1985, out of what he later said was frustration with the way Wall Street brokers promoted stocks At Kynikos Associates, he created a firm focused on betting on falling stock prices. His theories are summed up in testimony he gave to the House Committee on Energy and Commerce in 2002, after the Enron debacle. His firm, he said, looks for companies that appear to have overstated earnings, like Enron; were victims of a flawed business plan, like many Internet firms; or have been engaged in “outright fraud.”
That short-sellers are held in low regard by some on Wall Street, as well as Main Street, has long troubled him.
Short-sellers were blamed for intensifying market sell-offs in the autumn of 2008, before the practice was temporarily banned. Regulators are now trying to decide whether to restrict the practice.
Mr. Chanos often responds to critics of short-selling by pointing to the critical role they played in identifying problems at Enron, Boston Market and other “financial disasters” over the years.
“They are often the ones wearing the white hats when it comes to looking for and identifying the bad guys,” he has said.
Thx for the warning, but the Street will recognize value when these companies all start reporting over the next month. They'll get close to fair value with every Q they report.
Here's an article to counter Chanos' concerns:
China bubble ,not
China's Economy is Not a Bubble
It was announced today that China's GDP grew 10.7% last quarter over a year ago, its fastest pace since 2007. There is now speculation that China's central bank will start raising their benchmark interest rate in order to tighten lending in the country. In fact, China's central bank last week raised reserve requirements and Chinese authorities have ordered some of China's largest banks to curb lending for the rest of January.
NIA believes China's moves to tighten bank lending will strengthen the long-term future of their economy. In the short-term, interest rates will inevitably rise and their GDP growth will decline, but we won't see a collapse in asset prices in China.
Certain pockets of the Chinese economy may have mini-bubbles, such as the Real Estate markets in Hong Kong and Shanghai. However, even if Real Estate prices in certain major Chinese cities were to decline substantially, it won't be enough to send China's economy into a tailspin like Dubai. Dubai's economy was built on Real Estate speculation, while China's economy has been built on a solid foundation of manufacturing and savings.
There are some claims being made by people like James S. Chanos that China is in danger of producing huge quantities of goods that it will be unable to sell. NIA believes China's population of 1.3 billion people will be perfectly capable of purchasing their own goods that they produce, if the Chinese government abandons their currency peg to the U.S. dollar and allows the yuan to appreciate. China's currency peg is responsible for most of the global economic imbalances that exist today. It is forcing the Chinese to acquire U.S. treasuries, fueling the 'dollar bubble' in the U.S. and artificially suppressing the standard of living of Chinese citizens.
When China first chose to peg their currency to the U.S. dollar in 1994, China had a much smaller, less-mature economy. Due to a lack of population centers and distribution networks, China was dependent on the strength of its exports. Today, China is investing heavily into its infrastructure by building high-speed rail lines, dozens of new airports, and high-tech power distribution systems and electricity grids. At the same time, our infrastructure in the U.S. is decaying and we don't have any savings to repair it.
China is not trapped into maintaining its currency peg to the U.S. dollar. China's exports to the U.S. and Europe now account for less than 1/2 of their total exports. China has been rapidly increasing exports to countries like Australia, that can purchase their goods by trading valuable commodities instead of printed money.
It is impossible for China's economy to be a bubble when the Chinese stock market is still about 50% lower than its all time high. There are many Chinese stocks that have 20%+ revenue growth and trade with price/earnings ratios below 10, with comparable companies in the U.S. that have zero or negative revenue growth yet trade with price/earnings ratios of 20. These valuations should be the other way around, but the perception today is that China is still a "risky" emerging market.
China's economy is still in its infancy. China's oil consumption per capita is less than 1/10 the U.S. and most Chinese households don't own a car, while the average American household has 2.3 cars. China has saved and lived below its deserved standard of living, allowing Americans to live beyond their means for an extended period of time. This imbalance must soon be dramatically corrected.
China has many of the same characteristics the U.S. had just before it took its world superpower status from the U.K. in the 1920-30s. The U.S. was propelled to its superpower status because it was the world's largest exporter of goods and the world's largest creditor nation. Today, China exports the most goods and is the world's largest creditor nation with $2.3 trillion in foreign currency reserves. China will have many ups and downs in the decades ahead, but over the long-term we believe China is positioned to capture the U.S.'s status as the world's superpower.
Bargain Hunting:
BSPM: $4.75-4.85, sweet.
CCME: $12.36s so far, hoping for more cheapies, hopefully they fill the gap today as well.
TSTC: Back in this stock now at $16.90. Cant wait for Q earnings which are just around the corner. $30 coming soon.
NEWN @ $8 again, lol.
XODGE: Got an "E" for late-filing even though they filed an NT-10Q. Weird, got some $1.27s earlier lmao.
BSPM: $4.75-4.85, sweet.
CCME: $12.36s so far, hoping for more cheapies, hopefully they fill the gap today as well.
TSTC: Back in this stock now at $16.90. Cant wait for Q earnings which are just around the corner. $30 coming soon.
NEWN @ $8 again, lol.
XODGE: Got an "E" for late-filing even though they filed an NT-10Q. Weird, got some $1.27s earlier lmao.
I could not get a quote on XODG until I found out it went to XODGE. What does the "E" mean? Also, XODGE dropped big time today. I did not put a stop limit, so I took a bad hit todayhno:. Hopefully she rises soon
XODG: Hopefully u loaded the cheapies, 1.29 was on the ask for a few minutes, couldnt believe it. I reloaded all the shares I sold over $2 for a nice 35% discount ... I'll take it.
The "E" has been affixed for a late filing, but I dont understand why because they filed the NT-10Q on the 14th I believe, so they shouldnt have the "E" for another week. Doesnt make sense, that's why folks were selling earlier. Take advantage of their confusion, now $1.45 x $1.65.
Another Chanos rebuttal:
http://www.uncommonwisdomdaily.com/the-china-express-is-about-to-leave-the-station-5-8187
http://www.uncommonwisdomdaily.com/the-china-express-is-about-to-leave-the-station-5-8187
Just depends on when the market finishes consolidating. This is what I posted in the "Market Top" thread:
"This is when you know you're close to a bottom ... folks start saying the sky is falling and we're going to retrace 18%. We're back in the chanel we traded in for months, 1080-1120. This is nothing new or anything to panic over.
Although, The Bulls Last Stand is coming next week. They say 1085 but I think 1082 is the real line in the sand.
I smell an intra-day reversal coming early next week. It's gonna be ugly either way -- GL to both sides."
Even if stocks continue to fall over the near-term, with earnings just around the corner for TSTC, CCME and practically every other stock I post here, the stocks will go up as institutions recognize value.
Folks need to realize, even in a bear market stocks will go up. It's based on fundamentals, and the stocks mentioned here have the fundamentals to drive their prices higher. A company like TSTC that will likely make .60 EPS this Q will not be under $25 for long regardless if the sky does fall and the entire market tanks back to March lows (which will likely not be happening for years to come). This goes for every stock mentioned here, but especially the up-listed companies -- and dont forget BSPM is up-listing in March/April, and CKGT is likely to up-list this year as well, along with LPIH, the list goes on.
So, this is when the line will be drawn. You either can't bear to lose a few % here and there so you sell ... or you say "I know what I own and therefore I'm not concerned if the price keeps falling because it will go up when they report earnings." Your call, my money has been placed and I'll continue to buy as long as the stocks I like keep getting cheaper. It's just difficult figuring out what to sell to buy more of something else, lol.
SDTH: I've looked at it before, never owned it. You're buying at or close to support (nice job), up-side is probably $10, maybe $12 if their revenues can sustain growth.
TPI: Pays a dividend. Up-side probably $8-10, but chart is a little weak right now with the rest of the market. Considering it already trades at a PE of 10, I'd reduce my position and add closer to earnings if you really believe they're going to pull in around .80 EPS in 2010.
China May Consider One-Time Yuan Gain, Goldman’s O’Neill Says
http://www.bloomberg.com/apps/news?pid=20601087&sid=aNpOCUK8o.O4&pos=6
“a bigger one-off move than people talk about, at least 5 percent, maybe more,” O’Neill said in an interview today at the London School of Economics.
This would be very good for the entire China sector. Also good for the commodities market as folks would start selling the Dollar to buy the Yuan, putting downward pressure on the dollar, which was sure to be coming any time now anyway.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aNpOCUK8o.O4&pos=6
“a bigger one-off move than people talk about, at least 5 percent, maybe more,” O’Neill said in an interview today at the London School of Economics.
This would be very good for the entire China sector. Also good for the commodities market as folks would start selling the Dollar to buy the Yuan, putting downward pressure on the dollar, which was sure to be coming any time now anyway.
McConnell: Bernanke To Be Confirmed With Bipartisan Support
http://www.bloomberg.com/apps/news?pid=20601087&sid=aQMTyaptff3Y&pos=8
Futures up about .4%
http://www.bloomberg.com/apps/news?pid=20601087&sid=aQMTyaptff3Y&pos=8
Futures up about .4%
thanks for the advice earlier kuwl, i am looking to buy in increments as you suggested. The amounts I listed earlier were just my initial purchace, I will be looking to invest more on dips incrementally. I also took a look at TSTC and really like what I see. With companies such as china mobile looking to invest in 2/3g coverage I see this stock rising even if the market retracts. I was also taking a look at QTM, looking to buy on a dip but would appreciate any insight you might have. Happy trading!
A messy road ahead
Food for thought:
http://marketthoughtsandanalysis.blogspot.com/2009/12/long-view.html
A good post with some things to consider.
Food for thought:
http://marketthoughtsandanalysis.blogspot.com/2009/12/long-view.html
A good post with some things to consider.
Carnage... and to think it's only Monday.
TSTC is being gutted, now below 16 bucks
BSPM has fallen to 3.75 and change
CKGT now down 5% on the day...
SIAF down 5%
CCME down 3% and counting
CGDI down 20% in 2 days
CHME thrashed 5% today alone
Deals? Or are we into a major correction. Buy at your own risk. My money is on the sidelines and I'll be buying when things settle down. No sense rushing into anything until things calm down.
There are a lot of nervous investors expecting this sort of correction. I believe in value but I also believe in the herd mentality. Right now the herd is selling. The market is may oversold and stocks are going DOWN.
Read my post above and come to your own conclusions.
Peace out.
TSTC is being gutted, now below 16 bucks
BSPM has fallen to 3.75 and change
CKGT now down 5% on the day...
SIAF down 5%
CCME down 3% and counting
CGDI down 20% in 2 days
CHME thrashed 5% today alone
Deals? Or are we into a major correction. Buy at your own risk. My money is on the sidelines and I'll be buying when things settle down. No sense rushing into anything until things calm down.
There are a lot of nervous investors expecting this sort of correction. I believe in value but I also believe in the herd mentality. Right now the herd is selling. The market is may oversold and stocks are going DOWN.
Read my post above and come to your own conclusions.
Peace out.
All buying opportunities. That's the crazy thing about these stocks, nothing has changed fundamentally and if you've done your homework, you know what you own. I know these stocks inside and out, and if they get cheaper over the near-term, so be it. Just because the market has gone a littly skitzo over the last few days doesnt change the earnings potentials of these companies. I'll happily take a 25-30% in my favorite stocks, lol.
Buy the pain, that's how folks make money. Look back over the charts of these stocks, after big sell-offs like we're seeing now, it usually only takes a few days to get back to where they were before the sell-off. You buy on the cheap now instead of chasing them once they're finished consolidating and/or once the market starts taking its medicine.
State of the Union on Weds ... institutions may be waiting to see if Obama harps on the banks again ... if so, we're heading lower. If he stops placing all the blame on them, we rally back to where we were before the sell-off/correction occurred.
