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Xinyuan Real Estate Co., Ltd. Message Board

  • hmmm26 hmmm26 Apr 3, 2012 9:48 AM Flag

    Advice From a Long Time Owner of XIN

    I've owned Xin off and on for two years or so, but today sold my entire position at $3.85. I've entered my re-buys for $3.01 and $2.81. Why?

    Well, after having two national article mentions in two business days and being up from $2.65 in a week, micro stocks like XIN generally decline after the news goes cold. And for you brand new owners out there, the news for Xin sometimes goes very cold, indeed.

    If you just learned about Xin Friday or today in the Fool article, do yourself a favor and take the advice of an old Xin hand: wait a couple weeks and get the stock for 25% less than today (FWIW, I just entered my re-buys at $3.01 and $2.81).

    Whatever you decide, good luck.

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    • Verification for the "Let's Check the Facts" thread.

    • As promised on my "Let's Check the Facts" thread, here's the real time verification for the $3.85 sale and $3.01 and $2.81 rebuys (first post).

    • Since one of the possible explanations for XIN's two day run is its back to back national news mentions, I'm bumping this thread forward because the spike I sold on in April was caused in exactly the same way: daisy chained news items over multiple days.

      Heh, I assume the two thumbs down votes were from the guys who bought my shares at $3.85 that day.

    • I am pretty sure it is the Devil who likes the sinners.

    • FWIW, I'm not changing my buy orders. Today's sharp decline helped make that decision easy, since it looks like we might win our race between hitting $3.01 / $2.81 and the imminent announcement of the dividend.

      Even if I lose that race, I'm still not going to raise my price, since I believe the shortterm upside zap that the announcement will provide -- and I believe that impact will be significant -- will fade quickly and then the background environment of trading down from the spike caused by the WSJ/Fool articles will reassert itself.

      In a perfect world, XIN would be running late this year with its 20F filing and the $2.81 price would get triggered before the dividend's announced, but I suspect God hates me too much for that to happen.

      • 2 Replies to hmmm26
      • Good strategy, hmmm. But if I were you, I will stay in the sideline a little longer rather than using a specific price range to buy XIN.

        If you are a Buffett fun, you may know something he called "Cigar butt" strategy, which he used a lot during the 60s-80s. He normally bought significant undervalued stocks, which he called the cigar butt. You can smoke one last time from the cigar butt and then throw them away before the cigar butt if fully burned. Once you throw it away, it may never have any smoke again, and you move on to find the next cigar butt.

        XIN is a cigar butt. A OK company in a unstable industry with significant undervalued price. I consider the last run from $1.7 to $3.85 a perfect cigar butt run. Now, the run is over. The chance to have another amazing run like this is very low in the median term. Why not move on to find another cigar butt that has yet to have a amazing run yet.

      • Lets not put God in the mix of making money in the stock market.I am pretty sure he is the one that said,"money is the root of all evil".

    • You are absolutely right, hmmm. As a small cap stock, XIN is subject to various short-term special movements, which normally come with extraordinary high volume. Once the volume is back to normal, XIN will be the normal XIN again.

      Only long-term positive fundamental change help XIN outperform for more than a month. Look at 2009, when the Chinese government announced the huge fiscal stimulus, which helped the real estate industry tremendously, XIN went up from $1.7 to above $7 with normal volume. The theory is simple. If the company's future is brighten by factors accepted by most people, very few people are willing to sell at low price again. So, the price goes up with normal trade volume. On the other hand, short-term significant price movement with virtually no fundamental improvement needs high volume, a lot of time caused by flip transactions, to push the stock higher to absorb sell orders.

    • Good luck. You might see $3.01 and you might not, but if you like the alternative stock you probably bought with the cash you freed-up, then maybe you'll come-out fine either way. I don't try to time the market or individual stocks. Not enough time to stay on top of short-term swings. If the long-term story is solid then I just ride the roller-coaster and look to sell only when significantly over-valued or I have a better prospect to redeploy into. Plus, some 60% of my investments are in a fully taxable account and I always hold at least a year (unless the story goes sour quickly) and even then it doesn't make sense to get out and pay long-term capital gains tax, plus state tax, if I intend to get back in later.
      To each his own...

    • If anybody took my advice and delayed buying XIN, or, like me, sold at $3.85 with re-buys at $3.01 and $2.81, we've hit some snags on the re-buys.

      Our strategy faces two unforeseen problems this week:

      1. Good Vanke Data -- I suspect the Vanke data will have either a negligible, or a short lived upward impact on XIN's share price. If it weren't for # 2, below, I wouldn't even mention it.

      2. IMPENDING DIVIDEND ANNOUNCEMENT -- This one's a definite problem for our buy orders. While we don't know the size of the announcement, both the timing (probably this week) and the fact that I don't think the dividend's expected by the market are colluding to make the announcement's impact bigger than it otherwise would be.

      I'm going to dig deeper into all aspects of the announcement, and decide whether to change those buy orders tomorrow. I'll repost before making any decisions.

      All opinions by anyone concerning the size, timing, expected impact or any other aspect of the dividend announcement (or, really, anything at all impacting short term price) are encouraged and invited.

      But right now Game of Thrones is on.

    • I started to buy XIN at $4.2x back in early 2010, and since then have owned XIN everyday. I traded a lot, and have made a good profit when it bounced off the bottom.

      This stock should be $10 at this moment.

    • I have owned XIN since November 2011 even though this is my first post. First shares bought at $1.80 and then have been adding as I free up cash from other investments for an average of $2 per share. I am not very good at market timing and therefore I tend to just hold my shares. I would be worried about missing a continued run especially with a possible dividend, share buy back, or other update that could add fuel to the fire. You may be right about a small sell off, but I will just hold through it. It would suck to see it bottom just above your buy order and you would miss out.

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