As of the USX China Fund Annual Report ending 4/30/2011, LPH is the second biggest stock position the fund owns. Excellent!
Uh, not really. You *do* realize I was quoting the article, right?
"...Just wait till they all start buying into LPH as a result of all that "DD"..."
Wait a minute. DD is everything, but no mere mortal could possibly do DD like the pros, but the pros blew it with their poor DD and lost OTHER people's money, the now the pros promise to spend more *time* doing (probably the same naieve and superficial) DD, and this increased DD will somehow lead them to pick LPH out of every other Chinese small cap. Uh, sure CB. I'll just sit here and wait for that, but they'll still have no idea if Cai is carting money out the back door with shady acquisitions, will they?
"...Your arguments are becoming circular now, and you appear to be stuck in an infinite loop..."
Nope - the only way to argue against the naieve assertions of *your* circluar logic 'see no evil DD' and 'trust the happy newz' is to follow you around your crazy-circl and beat you over the head with reality. Frankly, I'm losing interest and getting dizzy - I think I'm going to throw up pretty soon...
"...The only way this will be resolved for you morefud, is when the profits keep rolling in Q after Q, growth keeps occurring, auditors keep auditing, and I cash out with a nice profit..."
No. While I wish you all the luck with that, the other possibility your ignoring is that this could blow up when everyone least expects it if some kind of shady dealings are exposed. I don't *hope* that will happen - it just seems prety stupid to ignore it and suggest the only possible outcome is pots' o'gold at the end of the rainbow. There's about 29 Chinese stocks that insisted on the exact same outcome, and are no longer listed. How could that have happened?
"...Hope you're still around to enjoy the giant piece of humble pie that gets crammed down your throat by about 6 of the patient longs here...."
Good for you if that happens and I'll take my pie. I, on the other had, will never delight in seeing people lose money if Cai is up to something. I don't need to be right here for my ego or anything else - I just think I might be based on the ever-growing collection of red flags and the meager amount of explanations from Cai that get filtered through Teflon Toups.
"...But I just *had* to buy the shoes that went with this top and I needed a haircut and stuff, too - do you want me to walk around looking like a bag lady? I didn't *mean* to charge over my limit. Jeeze - you act like I did it on purpose. What's the big deal, anyway? Just make Visa raise the limit so I can still buy junk with my card. I *need* my card. How else do you expect me to buy *anything*? It's *obvious* I'll pay everything back. Why are you always so mean to me! Get Visa to raise my debt limit a few trillion ...and I have to use the car and lend me twenty bucks for gas tonight until they reactivate my card. It's my turn to drive. Do you want all the other girls to have to WALK to the party because of me? Oh, that would just be GREAT! I might as well just stay home and be a bag lady!..."
"The fund manager refused to name the other company but admitted the setback has forced the team to spend more time on due diligence."
Just wait till they all start buying into LPH as a result of all that "DD". Your arguments are becoming circular now, and you appear to be stuck in an infinite loop. The only way this will be resolved for you morefud, is when the profits keep rolling in Q after Q, growth keeps occurring, auditors keep auditing, and I cash out with a nice profit. Hope you're still around to enjoy the giant piece of humble pie that gets crammed down your throat by about 6 of the patient longs here.....
Excellent? Do you happen to have access to the internet, hshinti? You might want to spend five minutes researching the dismal performance of the USX China Fund before suggesting that any association with LPH could possibly be construed as 'good' by the market. It has consistently lost money, vastly underperforming the cap-weighed Halter USX China index.
Poor Stephen Parr also rates the distinction of Business Insiders "20 Worst Equity Fund Managers of 2010". He's actually #5 on the list.
He consistently finds, invest in (and subsequently loses money on) a suprising number of Chiscams. But don't take my FUD - er, word for it. Gregg Wolper of those infamous bashers Morningstar has this to say in his June 21st article "A Closer Look at a Trio of Cellar Dwellers"
China Rising? Not Here.
Finally, The USX China (NASDAQ:HPCHX - News) has returns that look like a typo. For the year to date, it has lost 48.4%. China's market has floundered this year amid concerns about rising inflation and slowing growth. Even so, the China-region category average shows a much milder loss of just 6%.
Few shareholders own The USX China, which has less than $10 million in assets. But its 2011 performance is worth noting. The fund invests in very small Chinese stocks, and its collapse this year, following a disastrous 2010, highlights how an appealing story in theory can turn into a heap of trouble in reality.
The fund's website describes management's interest in focusing on domestic consumption rather than exporters, which helps account for the abundance of very small companies in its portfolio. But with questions swirling about the accounting practices of certain Chinese firms listed on U.S. or Canadian exchanges, small Chinese companies in particular have been hit hard. The companies that have received the most notoriety in the recent "reverse-merger" controversy--Longtop and Sino-Forest (Other OTC:SNOFF.PK - News)--were not in this fund's portfolio as of the end of March. But many of the stocks the fund did own have themselves suffered shocking losses. Through June 17, the fund's annualized five-year return is negative 9.5%, 22 percentage points behind the China-region category average.
While readers probably weren't considering buying this fund, its travails highlight two important points. First, what might be a compelling story, such as the potential of undiscovered stocks in a fast-growing emerging market, does not necessarily make for an appealing mutual fund. Second, outsized gains alone don't provide a reason to buy. The USX China gained 35% in 2006 and 50% in 2007, but anyone who bought it at that point would be sorely disappointed with the devastating losses since then.
Parr seems to have a handle on the Chinese macro situation, but seems to be the biggest rube in the room when it comes to scamster China small-caps. For what it's worth, he's doing much better recently then last year, but there's still a lot of questionmarks on his holdings. A few double-baggers will not make up for a half-dozen or so possible frauds, and he needs way more juice than that to match the Halter.
Not sure if he's finally getting wise to these scams or just running out of them as they get halted or delisted.
Here is the best part of the USX China Fund report:
". For the fiscal year April 30, 2010 to April 30, 2011 the Fund has decreased, but we believe there is extreme value in our portfolio as most of its holdings have no debt and trade below book value, tangible book value or cash value per share.
We continue to believe the People’s Republic of China is still the best country to invest in due to the country’s superior GDP growth, fast-growing middle class with higher incomes, and little to no debt. We believe the commodity inflation imported into the People’s Republic of China from the west will decline as western countries remain in recession or recession-like economies. As manager of the Fund, I have positioned the Fund to focus on domestically-oriented companies. Earnings of the companies in our portfolio have consistently met or exceeded expectations, and we have confidence they will continue to do so for the remainder of 2011. If the single digit price-to-earnings ratio average they now trade at holds, we could be in a position to substantially narrow our year-to-date loss during the rest of 2011.