Like I said earlier. You MUST be 100% sure this is a 100% legit company. Because even if it is 2% fraud ( a few accounting mistakes even), then this is going to the pinks and then to 0 even if 98% of the earnings,cash and revenue are real. Just 2% fraud! Or even NO FRAUD if people like Carson Block convince the SEC and exchanges to investigate - thus sending it to the pinks. ONCE ON THE PINKS - it will not matter anymore. Shares will be worthless.
thats what they said about CCME. However, the BANKS lied. How do you deal with that. Money needs to be put in US banks, then I will believe its there. Chinese companies are nearly exclusively full are liars and cheats - nearly every one
That is certainly what the majority of investors believe. That's why so many of the Chinese stocks are trading below P/Es of 1 and for less than 25% of cash in some cases.
About 10% of them are proven frauds, with another 10% accused of fraud. Maybe the other 80% are too, who knows?
On the other hand, maybe the other 80% are not frauds. If so, buying them is the deal of a lifetime. But there is no way to know. Anyone buying these stocks needs to know that they are just spinning the roulette wheel.
My AHHAP spin paid off. From 50 cents to $14. So I am willing to use a small amount of my profits to spin again. It's all in fun for me. And anyone buying stocks such as ZSTN, should do so for fun with a very small amount of their money. Don't put in more than you are willing to lose. The Chinese companies are full of liars and cheats, and it may be nearly every one - who can truly know?
As long as people are running away from Chinese stocks, they are all going to continue to go down.
The best one can do is to make a shopping list with stocks like ZSTN, VALV, WKBT, and some of the others. Then buy when the market turns. They may all trade for a P/E of 1/2 by then. If they even recover to a P/E of 5 that's a 1000% return.
Right now, the only place to be is in cash. Just sit on your hands and watch from the safety of the sidelines.
mizesaw: I'm opening small positions in the stocks I like with the intention of adding larger amounts at later dates.
No-one can ever know where the bottom is on any stock and the market isn't rational. If I were guesssing, ZSTN will bottom in the $1.70's range.
General comment: All the collapse in the China small cap market has done is expose tremendous value. It pretty much ensures that a large chunk of my cash supports the Chinese economy going forward since there isn't that value in the US market at this time.