Stan, all you are saying is that the price now is the price now. That is not analysis. If XIN were selling for $10, by the same logic you'd say $9 was a bargain and $12 is too much. The whole point of fundamental analysis is to figure out what the company is actually worth. You've said you don't believe in the standard objective fundamental criteria value investors use for figuring out what XIN is actually worth (PE, growth rates, book value, etc.,). So you look at price, and so you're a chartist. which is fine - XIN's chart is awful, and if that's how you invest, go right ahead. But don't pretend to talk about what the stock is worth in that case.
Let me make it clear. I am a value investor. I bought banks (Citi, BoA, and Wells Fargo) in 2009 when it was weigh below book value.
XIN is different. The difference is the environment of this company operates - China's real estate industry. When US banks posted huge losses, their stocks plunged. But the long-term potential of big US banks is still OK although it certainly would not as bright as it was before the financial crisis.
My point is a stock’s value is totally based on how well you understand the industry and the company. If XIN can still earn in the next 10 years as much money as it earned last year, I am sure it worth $10. But, guys, the background changed. China’s real estate is highly likely not going to be as positive as it was in the last 5 years. XIN makes money now because the housing price is still stable and XIN still realizes income by the old projects. It will post loss even liquidity problem if the government freezing last too long. The industry consolidation is coming. I saw this happened in the other Chinese industry before. The smaller or weaker players will go out of business. That’s what the market fears now.
Also, I am not saying the market is definitely right, but saying if you make your decision to invest in XIN according your understand of Chinese real estate industry and XIN’s position in it, you should go ahead to keep your stake. However, if you buy it just because the low P/E, P/B, and high dividend payout, you are gambling right now. I wish I can see more thorough analysis on the industry wide, but the silly ratios.
I understand why you wouldn't Stan. Anyone who has bought XIN has lost money, including myself. The problem with your mentality is this. As an investor you buy something that everyone hates, yet you see potential in the long term (5 to 10 years).
Use Zagg as an example. I know it's a whole different sector and not a chinese stock, but I am not looking at that. I am looking at how no one thought zagg could sustain making money with plastic phone protectors. Zagg continued to make good money quarter after quarter with no one wanting to enter the stock at 2 or 3. Then finally Zagg got recognized. Analysts in the stock went from 3 to 12. Big players stepped in once it crossed 5. Then everyone said no way it goes higher. Well it proceeded to shoot over 15.
I am not comparing those 2 companies. I am just saying you buy when everyone hates the company and sector if your research tells you so. You sell when everyone is in love. It's the name of the "game". Sure XIN may be dead money today, next week, next year. However, when they get recognized and they will. Every stock/company has it's cycles. They will be $10.00 before you can blink an eye.