In 2009, I bought TCK at $2.6x, KFN for 60 cents, and GNW below 80 cents. They became 10-baggers and 20-baggers in just over 1 year and I did not hold them long enough.
This year, I don't see many potential 5 baggers among 5000 stocks, but XIN is one.
I see your style now. Basically, you count on a turnaround in those industries.
I used to have the same style as yours. However, I realize buying growth companies at fair price yield more return in the long-run. These companies almost are never traded below BV.
In 2009, we can buy LULU around $3 and now it turns to $56. We may also buy BAC at $3, and now it is only worth $7. LULU may be an extreme, but there are numerous other highly profitable companies such as COH could give you more than 5 times return from 2009. If I am right, most low PB stocks back in 2009 are still low PB now.
I am leaking that it is more than 5% now close to 10%. I own other stocks like BAC, HIG, MET, NTT, BPOP, MT and others, and each is less than 3%. In general, I like stocks trading below half book value.
That tells how confident I am in XIN.
Hey, SCD, you should join the board stock picking contest. You could pick a silver mine as one of your fantasy stocks. http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_X/threadview?m=tm&bn=72398&tid=21420&mid=21420&tof=3&frt=2
Fortunately, I sold half of my XIN last Thursday. Now. it is down to less than 2.5% of my portfolio. I still don't worry too much about the fraud risk. Otherwise, I will sell anything. Just the risk environment is totally against XIN right now. China is very unlikely to loose the real estate curb in the near term. Also, the RE bubble risk in China is getting higher.
I lived my first 20+ years in China, and still own properties there. Those bubble-talks are all non-sense.
In this globalization process, China is like 10x Japan in 1960's, 20x Korea in 1980's, and 50x Taiwan in 1980's. All countries experienced high-rising housing prices, and they all stabilized.