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Xinyuan Real Estate Co., Ltd. Message Board

  • hmmm26 hmmm26 Sep 14, 2012 4:40 PM Flag

    XIN's Opportunity Cost Problem

    Isn't the opportunity cost of owning go-nowhere XIN against a backdrop of a market rally (the Nasdaq's + 9% this quarter, while XIN's - 9%), starting to aggravate owners?

    Watching my Google and Apple shares race each other to $700 over the last 6 weeks (won by GOOG, in a thriller), I couldn't help but wonder: Do current XIN owners expect the price to rise in the very near term? Because if they don't, then isn't the logical step during a market rally to move their XIN money into something more profitable, at least for that timeframe within which they don't expect XIN to rise?

    If, on the other hand, you do expect a XIN price rise in the very near future, then how much of a rise do you expect, and how soon do you expect it?

    Naturally, there's nothing wrong with holding a stock you expect to spike up in the short term, but it doesn't make sense to own a stock that you only expect to languish, possibly even decline, especially not against a backdrop of a market rally, where you could pick virtually any other stock and make profits.

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    • I am sure my analysis could be improved.

      I love the company’s relationship to the broader market. It was the reason I bought XIN. With a beta 1.52 of and standard deviation .54, I knew I was getting a stock not following the crowd. Otherwise, why not buy a foreign or real estate ETF and stop for the day?

      In the broad market, it has been a great year. I think it will adjust downward 3 % to 5 % as the election, profit taking, and year-end tax planning occurs.

      The people that will make my investment a winner, the institutional stock picker, will have to turn their attention to next year. They get a completely new game on January 1. They have to beat the competition again.

      The broader market is reaching historical valuations finding winning picks next year are going to be tough. I hope they find my company and bet on it. They cannot keep accumulating Apple and watching like last year.

      Consider what has fundamental change this year on a macro basis. Did the Europe debt crisis, United States unemployment, QE, or earnings change year-over-year? This year is catch up in valuation for the last two years. The broader market is reaching historical valuations finding winning picks next year are going to be tough. I hope they find my company and bet on it. They cannot keep accumulating Apple and watching like last year.

      I am team XIN. GO YONG!!! GO TOM!!! GO XINYUAN!!!

      • 1 Reply to caseysxyz
      • Good analysis.

        I always find it funny that people who can claim to be Cheerleaders (or part of "team XIN") are never, without exception, actually Cheerleaders.

        For example, you could never be a Cheerleader because your commitment to objective analysis is far too strong. That's a very good thing, but it does mean you'll have to be satisfied with being just a plain old XIN Bull.

        The dead giveaway test is objectivity: Bulls do analysis; Cheerleader do spin.

    • Own a diversified portfolio and you won't have a problem. I bought most of my shares around 1.75-2 so I feel pretty good about Xin in any case.

 
XIN
2.50+0.20(+8.70%)Dec 19 4:09 PMEST

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