I don't understand the criticism regarding JB's selling of XIN. Whether the recent news genuinely qualifies as bad is immaterial. Many stockholders perceived it as bad and, thus, sold their shares, driving the stock price down. This coincided with a great buying opportunity (STV, due to its one-time $2.30 dividend). So, JB made money by selling XIN, will make money again when he collects the STV dividend or sells before the ex-dividend date, and can use that money to buy back into XIN as soon as doing so seems prudent. This is perfectly rational; i.e., it's more profitable than simply holding his XIN shares. Being consistent in the sense that you mean it (maintaining the strategy of holding XIN long-term) is good only as long as the conditions that originally warranted that strategy persist. If those conditions change, one should adapt to the new information by changing one's strategy to fit the new conditions. In this case, an abrupt change in the perception of XIN occurred in the mind's of many shareholders (as evidenced by the sell-off), and the company provided information indicating that things might be slow for a while. Being "consistent" in this situation is irrational (i.e., not as profitable as the alternative of holding). If conditions change again in the near future (e.g., XIN's repurchasing, new institutional buying, and so on begin to drive the price up), as I said before, JB can just sell his STV and get back into XIN at around the price at which he got out. Consistency and adhering to superficial principles are bad if they prevent you from adapting to new information and making more money. Also, I don't think there's any contradiction between JB's current behavior (a short-term move) and his view of XIN's potential (long-term assessment). I assume he still views the stock as likely eventually moving beyond $6.00; he was just pretty sure it wasn't going to happen in the last few days; thus, he saw time for the STV move.
The problem with your analysis is that it leaves out the fact that JB spent MONTHS pumping this stock. Post after post saying that the stock was going to 6. Then a CC with a little bad news and he dumps almost his entire position. This is NOT rational behavior.
A tiny change does not warrant a massive reaction. The stock sells for 2x earnings. That has NOT changed. Did anyone really believe that Xin would blow away earnings every quarter?? JB is a blowhard and a pumper. At the first sign that things aren't perfect he cuts and runs. WHAT A WIMP!!!
According to what standard is it not rational behavior? New information emerged regarding the current perception of XIN (in the form of the price drop) and regarding its short-term future performance. JB changed his strategy accordingly. This is what rational investors do; they adapt to new information. In JB's case, it has paid off; he's up big with STV and still has the option of buying back into XIN at a lower price than the one at which he got out.