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China Information Technology, Inc. Message Board

  • chasurez chasurez Dec 5, 2011 10:26 AM Flag

    CNIT: A life lesson for me

    One of the first stocks I've put into my portfolio since I began investing in early 2010.

    Just beginning to get the idea of fundamentals, I put a small chunk into this stock based on the smartgrid announcements at the time plus the analyst giving it a strong buy.

    Fundamentals seemed pretty sweet at the time and then it kept dropping and dropping so I "backed up the truck" while catching a falling knife that's still cutting.

    Ended up losing $3k all in all which isn't anything for me to sneeze at. I didn't really see any warning signs until the CFO left for a new job.

    Now this stock is below $1 and doesnt look to be getting any better. At this point, do you just sell the remaining amount and take the loss? Do you get bold and move down my average buying price? And do I avoid chinese stocks for pretty much the rest of my investing career? I see P/Es (and PEGs) so low that it screams buy to me all while I look at stocks like CRM with ridiculous P/Es that make no sense to me why anyone would buy them.

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    • The problem w/investing more now is that information on this company has been terrible. You have also not much to lose from holding on at this point to what you have. If they (at some future date) come out w/a significant improvement in their Q reports; one that shows some upside to the stock is taking place, that would be the time to add to your position.

      As for whether a company like this will ultimately succeed...the floor is littered w/those that did and those that didn't. Unless you work for one you will never know which it is so only buy what you feel comfortable risking.

    • Paul Tudor Jones, considered a great trader, has a slogon -- "losers average losers", meaning that it is a losing play to add money to an underwater position.

    • chas, As you have found out the hard way, you are being RIPPED OFF by the likes of Goldman Sucks and their army of crooked "hedge funds" (ie boiler room mafia operations). Wall Street only knows how to STEAL. They manufacture nothing. They create nothing. They provide no service. All they do is rig the game so that they can continue stealing from investors, traders and the like.

      Welcome to the BLACK HOLE known as the "stock market".

    • You should of been out long before now...

      When you buy a stock you need to set a sell range. No emotions!

      If I bought CNIT at $5 i'd have a stop limit in at $3 and i'd kick on a trail limit after $6.50

      Where do those numbers come in? 30%-60% on a stop limit(depends on how much i have in it), 20% + trail amount kicks in my trail limit.

      Now as for the stock...
      Personally I've bought in the mid-low $1 range as a volatility play, worked pretty good until it finally sank under a buck. Now I'm waiting for a buy back to prevent delisting. That may or may not come, but even at current price levels i'm' not hurting yet.

      In your case, I'm assuming you bought ~700 shares.
      You had no stop losses, so you went from 3800 to 600... How badly do you need the $600? How many shares of company X you want to invest in would $600 buy?

      The amount of losses you've lossed, it's hard to make a decision. Your fundamental flaw was not selling when your paper-value dropped to ~2500.

      In your shoes, assuming you had no pressing need for the $600, I'd stick around. It would take an accounting scandal to drive the price under $0.50, in which case you loss another $600 (not like you haven't lost $3k)

      That being said, this stock isn't going above $2.50 anytime soon. Put in a trailing stop limit at $1.50 and pray it goes up.

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