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The CCME (China MediaExpress) Madness

|Includes: China MediaExpress Holdings, Inc. (CCME)

It came to my attention lately about the heated debate on who is the so called 'fraud'. Some people accuse CCME for being the fraud, while some point the fingers to the made-famous bloggers such Muddy Water, Citron, and Shang. It is comical to me because the whole pandemonium feels like a Texas holdem poker game to me in which the regular investors are trying to guess who has the winning hand and who is just bluffing. 

I think there are enough articles out there debating whether CCME is a fraud and enough articles out there debating whether the Muddy Water, Citron, and Shang bloggers are frauds (just by simply looking at all articles about CCME on SA and you will see what I mean.). Therefore, I will leave the debate and hunt on who is the fraud for the ones who are already writing about them. 

What I want to do here is to take a step out of the madness and focus on something else -- the transportation issue in China independent of CCME. And then, I will come back on what I think about CCME.

Everyone knows China is a big country and there are a lot of people. In turn, it creates a very obvious issue on the amount of efforts needed to connect cities and move people around. In China, many of the less developed cities do not start to grow enconomicly until roads or transportation means are set in place. I have heard people joke about how you have to move two third of people around in China during Chinese New Year. If you have been in China during Chinese New Year and have to travel, you probably will not think it is a joke nor there is anything funny about it. To get a train tickets in certain cases during Chinese new year, you have to wait for days to get the ticket and you are not guaranteed to get the ticket (the earliest you can start to buy the ticket is ten days before the break). Just picture all the people waiting inline to get the new Apple product.

When you get on the train, you are really stuck back-to-back with all other people. It is not uncommon to have to stand there for ten to twelve hours. If you have to go to the restroom, sometimes you may be simply just out of luck. Of course, this is the worst case scenario since not everyday is Chinese New Year in China. Also with new developments such as the high speed rail, things are improving. However, this is just to show how transportation can be such a big issue in China. Just think of moving two third of China round the country and you will get the idea.

Hopefully by now, I have painted a picture of the big transportation issue in China. Just as a side note, if you think it is crazy that one day the US government starts to limit who can drive on a day based on the license plate number being even or odd,  yup, that is what is going on in some big cities in China.

Now let us connect the transportation issue with the growth of China. When I say growth, I am more referring to the development of individual cities in China. For a city to develop and catch up some more advanced city in China, it is critical that resources can come in and out. So it is not hard to understand there would be a big push to improve transportation which include inter-city buses. One interesting thing to note is that there seems to be a big push for the government on those European buses to replace the existing out of date buses that are unsafe. 

I cannot say whether I know who is the "fraud" in all the heated debates. However, one thing I know is that transportation methods such as inter-city buses will only grow and improve as time goes on as there is a real need for them. Someone has to got to find a way to monetize on all those people moving around the country through advertising. And that is a lot of people we are talking about. 

I may get a lot of hate comments for saying this and people may make fun of me. However, as someone who has not lost in Vegas playing Texas Holdem in Ballegio for the past five years, I am betting CCME is not bluffing. It is not saying the other camp is "fraud". I have definitely seen neither side is bluffing, it's just that one person has pocket Kings and the other has pocket Ace's. 

After the research I have done, I like where CCME is right now. Most of all, I want to invest in any company that tries to monetize on people moving around in China. Let us hope my ability to read poker players is proven right in the long term. 

Disclosure: When I play Texas Holdem, you will only see me at the $1 and $3 no limit table. I am not a high roller in casinos.  I am long ccme.