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Yongye International, Inc. Message Board

  • robinspec robinspec May 9, 2012 12:30 PM Flag

    Does Earnings Really Matter

    The markets have a way of sorting through all of the noise and concentrating on the issues that matter the most. This earnings season was a prime example. It's very clear that macro issues such as Europe and the future of the euro are more important than individual earnings successes. When the markets become "risk off" due to macro conditions all stocks sink as the good gets thrown out with the bad. What is really happening is deflation as prices contract on all assets. The dollar is king under these conditions so everyone takes whatever profits they may have and goes to cash.

    Many great companies have seen their stock price fall recently. It has nothing to do with earnings and everything to do with a "risk off" mentality. The fact is with all the macro risks in the world it makes it nearly impossible to be a successful long term investor. We go through periods of rally followed by periods of decline and over the long term we gain little if any ground.

    In modern markets it's extremely important to be aware of macro events as money can move very quickly as events dictate a sudden shift in risk management. It's a risk on, risk off world we live in today and things are very unstable throughout the world. It's a difficult environment to say the least. Under these conditions one must ask themselves,"does earnings really matter"? My feeling is earnings matter under a risk on condition and matter very little under risk off conditions.

    As we are currently under a risk off condition it's my opinion Yong's earnings won't matter. There may be an initial knee jerk reaction but I believe share prices will continue to drift lower. As other have noted there seems to be no interest in this earnings announcement. I believe the market is telling us that earnings don't matter.

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    • The message of the markets is much more important than some investor relations pr or conference call. The market is a living breathing entity that changes and evolves on a daily basis. If you try to invest based solely on some accounting metric you're not going to suceed in today's market. You have to get tuned into the message of the market as well. Also of critical importance is to have a risk management plan in place because anything can happen at any time to change the mood of the market. It's a volatile world we live in with very little stability.

      Throwing money at a stock and calling yourself a long term investor doesn't change the chart or the mood of the market. The hay day of long term investing is over. Today it requires more to be successful. An investor had better be using every tool available if they hope to survive. And most bluntly I'll say if you're not reading charts and following technical analysis you're going to fail or at the very least find yourself stuck with a loser stock that ties up your money for a long, long time. To me that's not what I call investing. Investing is putting your money where it will do the most good in the shortest amount of time. This is just mho.

    • HAHAHAHAHA!!!!!!!!!!!! And here I thought you had some brains. Mr. Technical Phony!!! I’m a retarded long and even I can do math:

      Jan 1995 – Jan 2000: Dow 3,800 to 10,900 = 287% or 57.4% per year

      Jan 1977 – Jan 1990: Dow 954 to 2,590 = 271% or 20.9% per year

    • Looks like more gobbledygook. You concluded " If this is more than just a bounce Yong may well go higher to test the downtrend line."

      Now using both Math and Logic, and finding the lowest common denominator, you just really said, "Yong Might go Up" which also implies the inverse, "Yong Might go lower." which proves, as far as your predictive powers are concerned, based on technical analysis....

      you know squat ... you are clueless.

      You are a total distraction.... you know zero and I therefore must, keeping to my own convictions NOT TO FEED THE ANIMALS, from now on, keep you on IGNORE.

    • amirstern@ymail.com amirstern May 9, 2012 3:32 PM Flag

      Robin, the market is telling us Chinese companies are not worthy of an investment, and YONG, although astonishingly growing and profiting, is no different. The statements are regarded grossly as an unfounded pile of worthless papers.

    • "Anatomy of a growth stock - Peter Lynch
      A quick introduction to one of the great growth investors of all time, Peter Lynch.

      Lynch became manager of Fidelity's Magellan fund in 1977 when it was worth $20m and grew it to $14bn by the time he retired in 1990. Anyone who went along for the ride would have seen their money increase 30-fold in that time.

      Lynch was never exclusively a growth stock investor, but 'fast growers' had a firm place in his portfolio, and he was keen on finding 'tenbaggers' - stocks that rise in value ten times. In picking fast growers he observed the following rules:

      Fast growers are small aggressive enterprises growing at 20%-25% a year.
      They don't have to be in a growth industry, but they do need a winning repeatable formula that has proven itself in more than one location and still has room to grow.
      They need a reasonably healthy balance sheet and, ideally, are making HEALTHY PROFITS (Body Shop was a good example in its heyday).
      They need to be simple businesses that anyone can run.
      Ideally they should not be in 'hot' industries which everyone is following. The less fashionable the industry the better.
      You need to get in on the ground floor."

    • YONG is not a global/international company. They do not export/import and are more isolated to China, except maybe the value of the dollar. I would tend to believe macro issues would not affect YONG except for the fact they are a publicly traded company on the US market, therefore may be affected by up/down swings on the overall market.

      So if YONG reports terrible numbers tomorrow it will have no affect on the share price? No one really cares whether the numbers are bad or good? It just drifts lower and is controlled by macro conditions?

      Sorry but I disagree. In my opinion what is going on in Europe should not affect YONG at all. Actually I would think investors would want to invest in companies like YONG right now who are not as closely tied to these macro issues.

    • robin,

      While your opinion always appears to be a studied one, it is also very clearly one that attempts to solidify your opinion. I think we all get it. You believe in gambling and card counting, and investors are suckers. Got it.

      My opinion, gamblers/retail know-it-alls, are one of the major ills of the current market. It fosters pure greed and replaces stability with minor event driven fear. The market should not be allowed to become a Casino, full of manipulation, and lacking in investors.

      Long term, knowledge based investment, will still, in the aggregate, win out over time.



    • "As we are currently under a risk off condition it's my opinion Yong's earnings won't matter. There may be an initial knee jerk reaction but I believe share prices will continue to drift lower. As other have noted there seems to be no interest in this earnings announcement. I believe the market is telling us that earnings don't matter."

      That one paragraph says it all. I'm sorry to say I couldn't agree more. I'll add to that by predicting that the earnings will be very good and, as you said, there will probably be a knee jerk reaction. However, 'the imbecile' will thereafter come out with another hit piece on Alpha, at which time the stock will slide again. That has been the history of this stock for the past year +.

      I hope I'm wrong.

    • Again, this guy is using logic that applies to big cap stocks and smaller cap stocks with typical PE ratios etc. Yong is trading at an inexplicable PE ratio.... While it may follow broad market moves, it will completely blast off when the force holding it down - unjustified fear caused by bloggers - is quelled.

      • 1 Reply to jonathan56602
      • totally agree. The risk-on, risk off trade ananlysis is totally irrelevant to YONG.

        For exmaple, the overall market has been in risk-on mode trhough late 2011 and q1 2012, with indices breaking to new highs. If his justification for YONG not performing tomorrow RE: earnings is because market is in a risk off mode, then what happend for the last six months? YONG reached new lows when market was in risk on phase. Clearly, this overlay is completely bogus. YONG has detached from tading with the NAS for quite some time, and whether the overall market is in a risk on/off mode is largely irrelevant to the PPS moves in this name. This has been demonstrated emprically time and again for months/years, so comments extrapolating YONG pps directing in relation to general market direction and sentiment are nearly pointless.

    • Earnings have not mattered for a long time with YONG. The PE hovering around 2 indicates the problem is not earnings. The problem is believing the earnings reported and seeing the cash in the bank.

      There have been a number of periods where YONG responds well when the DOW drops. Now that all world indices are dropping we shall have to wait and see.

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