Alan Young

China's Stock Market: The A vs. H Premium

Very interesting. I knew there was a premium, but I didn't realize it was so high--and so volatile.

I find the overall trend can be easily tracked by charting $SSEC:$HSCEI, which shows a general downtrend since a series of peaks in 2007.

I don't know of a site that posts individual A-share prices (in English), so while I'm curious about wide differential in premia among the stocks you list, learning more about it would not do me much good.

Clint Cox: Digging for Opportunities in Rare Earths

Excellent --this correlates just about 100% with my own thoughts. I got in to Lynas at .52 AUD (a little late, but still plenty of potential). My thesis is that the Australian owners will make at least some of the production available to the non-Chinese markets, increasing demand for their output. Also long GWG.

On Jun 27 11:17 AM comox wrote:
>
> I did some amateur legwork on this Rare Earth market more than a
> month ago before the Dines Newsletter created a runup, and found
> these possibilities:
>
> Great Western Minerals Group (TSX Venture: GWG)
> They produce powders and manufactured items, as well as explore,
> so they have some advantages over pure explorers. With Molycorp looking
> for an interest in them, they may be a takeover target, and that
> may be the best way to capitalize.
> I bought them at .09 in May, they went as high as .18 and have fallen
> back down to .11 (which represents a good entry point again). As
> every penny is 9% at this point, I am toying with buying at .11,
> selling at .13 for a quick 18%.
>
> Neo Material Technologies Inc. TSX:NEM. Currently $2.19 www.amr-ltd.com/
>
>
> Just fended off a takeover by Pala (May 12), which started at $1.40
> and escalated to $1.70. Offer rejected as financially inadequate.
> So Pala, or someone else, may be back soon at a higher price.
>
> Had disappointing 1Q09 results, due to the reduced global demand.
> Lost $4 million, but has lots of cash to wait out downturn ($49 million).
> Were very profitable in 2008, up until last quarter downturn.
> Shareholder Equity $173 million over 115 million shares = $1.50/share.
>
> Cash $49 million, Current Assets $114 million.
> No long term debt.
> Analysts recently put "Buy" rating on it, with target of $2.50, $3.75.
>
> Recent price range of $1.00 - $5.08.
>
> Avalon Rare Metals (TSX: seekingalpha.com/symbo...)
> I hate waiting for explorers to do their drilling and develop their
> deposits and production plants. The best play here is to await a
> takeover. AVL has already run up and fallen back a bit, so don't
> know how much more upside there is.

Clint Cox: Digging for Opportunities in Rare Earths

Nice background, but I agree with HaavBLine: it should not have been that hard to mention one or two plausible investment possibilities.

There are only 4 publicly-traded companies I've been able to find (2 in Australia, 2 in Canada) that specialize in Rare Earth resources. They all trade at speculative prices, so the potential upside is huge. Let's get a mineralogist on the job and sort them out.

China Will Push Increased Demand for Rare Earths

Very provocative. I've been considering taking a position in Lynas, but the upshot of this seems to be that North Americans should be getting very busy developing our own resources. So, perhaps that's a better way to play the industry. More study needed....

Why It's a Good Time to Consider Chinese Stocks

There are undoubtedly values in the Chinese markets, but you can't invest on the Shanghai exchange, so that's not a very good indicator--especially if (as you say) ALL you depend on is the charts! Prices in Shanghai do not always correlate to price movements in Hong Kong and/or in the ADRs you have listed. So if you are relying on T/A, you should be using the appropriate chart.

Personally, I like China as an investment destination, but try to pick stocks and sectors that are not export-dependent.