anonemouse

Fractured Wall Street Fairy Tales #1: Buy and Hold is the Best Strategy

Laughing said "where were you in March 09". I guess you haven't been following the author:

seekingalpha.com/artic...

Of all the articles I read on SA Mr Shaefer's are to me the most insightful and informative. Great job on 'Fractured Wall Street Fairy Tales #1', looking forward to the next parts.

A.

Top 10 Chinese Internet Stocks: Comparing P/E Ratios

Exactly Glen. The only way to mitigate the various risks is to buy something cheaply by whatever combination of metrics one chooses based on Earnings, Book, Sales, FCF etc.

In regards to Alphameither's statement I do understand why people accept higher multiples on a stock, but I would love to see the evidence that a high PE implies low risk in regards to as the author put it the 'investment risk'.

Here's another gem in regards to CTrip: "its stock chart shows something other Chinese internet stocks do not have: a four-year uptrend with very low risks ".

The chart shows share price going up and the author is correlating this with risk? The statement implies price going up means low risk, i.e. the fact it has went up in the past means it is at low risk of dropping in future. Yeah right.

I actually like CTRIP medium term prospects too but the author should seriously do some reading on the definition of risk and investments, and look beyond prices going up and high PEs.

A.

Top 10 Chinese Internet Stocks: Comparing P/E Ratios

As much as I am a believer in the long term opportunities of the Chinese economy and the short term risks associated with a forced liquidity faked recovery, I have trouble with this statement:

"The P/E ratio reflects two factors about a stock: potential growth and investment risk. Typically, a high P/E means high growth and low risks. ".

Low risk are you serious? Btw I've held BIDU since early March so I am not adverse to Chinese stocks that have good future potential and are *under valued*. My interpretation of the phrase low risk in this context is:
- The stock price at this level has a low risk of decreasing

The PEs of some companies on the Shanghai and Hang Seng exchanges are at really high multiples, guess the author would see this as impling minimal risk. A word of caution do not drink the kool-aid being supplied in doses by Xinhua. From an economic perspective the 21st Century will 'belong' to China, but now is not the time it will take years to transform from a low margin export driven economy to a mixed economy.

But putting that aside BIDU is a great leading technology company, but at its current PE I would say it is risking opening up a position at this level.

A.

Chinese Government Gives China Mobile Revenues to China Telecom

This is exactly why you need to take care in owning stocks in Chinese SOEs. I would rather take my chances with small caps with a high degree of insider ownership and a good track record of corporate governance.

A.

Omnialuo Wants to Be the Chinese Ralph Lauren

From 2007 10K Net Income raised 14.5%, share dilution increased 134%, 2006 EPS was 0.33, 2007 EPS was 0.15. From recent 2Q results share dilution increase 48%, net income in last 3 months of 2007-2008 increased 21%. Diluted EPS dropped 14%.

I don't mind small caps issuing shares to increase shareholder value, but this growth company appears to be doing the age of trick of letting everyone know about their fantastic growth and using their share price as a personal ATM and not returning share hold value. I've been burnt by this before, until the "share-junky" weans themselves off their habit I see no reason to take a chance they will be cured.

Many other under valued better Chinese small caps to invest in, CSR, CFSG, HOGS, FEED etc. If they stop issuing shares like the FED is printing money I leave open the possibility to reconsider...

Focus Media: Will Massive Accounts Receivable Lead to a Future Write-Down?

% AR to revenue for previous quarters:
Q1/08 158%
Q4/07 114%
Q3/07 111%
Q2/07 110%
Q1/07 162%

As glassbox said you should be comparing Q to Q. I think its something to definitely keep an eye on but no immediate need to panic based on comparison to peers.