Over the course of the last few months we have seen quite a few new China companies come out onto the market. I feel what we have here is a major Chinese IPO bubble, along with That is IPO saturation with with new issues almost on a weekly basis. Its looking a lot like 1998-2000 when everyone was buying everything and anything that was tied to the internet or had a .com at the end of the company name.Stocks were flying off into crazy valuations..Anyone here remember MP3.com? The company made millions on the IPo and then fizzled out after everyone stopped drinking the Koolaid.
I know Iknow, everyone says growth growth growth, and that was the same thing they said during the .com days in 2000.
Here's my point, right now everyone is jumping on a lot of new China IPO's for the short pop up and then getting out and jumping onto the next China hot IPO and staying long just for the run up in price then on to another and another and another. There are so many new issues most people don't really know which ones they should hold onto. Dang,Yoku,Renren,LCD,DATE, all had their run up's, now its just wait and see for the next one. I also think that people are chasing the dream that they are buying the next Bidu,Sina,Sohu, The diffrence is that these companies have been around a lot longer and have proven track records and good institution partisipation.In other words they do make money and have growth.
I'm not saying to not invest in China stocks, just don't hold on to them for more then a few weeks or months at the most. All its going to take is china to show some signs of slowing and Bamm !! overnight these stocks will get killed, or better yet turn into another LFT,Renren with accounting issues. Don't listen to the banks, CITI has a price target of 36 on this company, yet they are also the ones that underwrote the IPO and gave it its opening price of $14.50
so ask yourself this question..why did CITI do this QIHU IPO at 14.50 only to upgrade it to 36 in a few weeks? what did the company do that merited a 20.00 price lift from the IPO? did they mess up ? or are they working for themselves?
Ask yourself this question...Where do you think any of these companies will be in 2 years?
Good luck if your long or short. I know there are opotunities in both directions.
Nope, I did not. In my opinion there are better places to park your money, I have no problem being wrong, and I hope you see something that everyone is ignoring and you get paid handsomely. I use charts for most of my trades along with the CANSLIM methologhy from William Oneil. works for me but not for everyone.
By the way did you see the news on CBEH??
They hired a CPA, also Managing Partner of a CPA firm (Wei & Wei LLP) to be an indepedent director and join the audit committee.
That's not some random person, he's NY CPA and Managing Partner!!
If people still think CBEH is a fraud after that hirem they are lunatics!!
good point.. I am in 50% short term bond, which yields about 1.5%, 25% cash and 25% equities...
I am waiting for another 5-8% correction, which may happen over the next 2-3 months, then buy...
"Therefore, I disagree with people saying the chineses IPO is a bubble since the entire market is going through a correction. "
My point exactly and everyone has a right to his or her opinion.
Good luck With RENN,DANG,CBEH,and QIHU for the time being I'll be in cash until the market shows better times ahead
What are you talking about?
Dollar cost average was the key to make lots of money from 2008 to 2010. It's people that bought stocks little by little on the downtrend that made a lot of money on the rebound.
Of course you don't understand why I am talking about "a couple of months." It's because that's when a lot of chinese IPOs happened (VNET, QIHU, RENN). That's why I am using the performance of stocks in the last couple of months, not August like you said.
In the last months, the entire market (chinese IPO, commodities, banks, semi, tech,....) went though an entire correction!
Therefore, I disagree with people saying the chineses IPO is a bubble since the entire market is going through a correction.
I really don't need your respect this post was not intended to bash people of what their opinions are, it was more as a way discuss the market in Chinese IPO's.
If you are a swing trader then its good to stay out when the market is telling you to.
Dollar cost averaging? throwing good money at bad money..been there done that 10 years ago.
every sector is down?? What? where you been ?Did you just start investing last month? The market has been on a tear since last August !!
By the way can please explain to me why they reported unaudited financials,and why companies in the USA don't report unaudited?
The last two numbers of your user name is leading me to think that it's your age. If so you have a lot learn
You are advising right now to go "cash" when the market already corrected down?? that makes no sense
Also, have you ever heard of dollar cost average? Buy little by little (in May) on a downtrend to lower your cost basis and do better in December??
Also how can you criticize Chinese IPOs when every sectors have gone down??
Finally, at the end, you have to acknowledge that "you have done pretty well." It's very easy to prove you are successful on the internet
I will admit one thing: I have no respect for you!
The Market in a whole has been in a huge run. I think at this point its a stock picking market, going into summer June-July sometimes into August the market tends to be choppy from those times and can have downside momentum which we have seen.
markets will rotate from sector to sector, Comods,Tech,Ag,Clue Chip stocks like phillip morris etc. It really depends on what your goals are. If your worried about this choppiness then its best to be in cash, hecnce the phrase "Sell in May and go away".
I feel that there could be better times ahead for companies like QIHU,DANG..but right now is not the season and the market is a bit saturated with new IPO's.
Just because a company makes a profit does not mean that they don't need money. Most of them go public because they want to grow and aguire more market share, and the founders usually want to get very rich because that's where the money is at. also the hedge funds want their payday too being that they have bacnk rolled the company such as softbank,Seqoia etc you think Google needed to public because they needed money?
Let me be really clear..I'm not a QIHU hater I just think that there are better place's to make money and caution needs to be in place the next few months. That's why I am choosing to be in 80% cash for the next few months.
I've been trading for 15 years and have done pretty well, not as well as I would like, but well considering. The market is manipulated for sure we all know that..Go look up PPT on Wikipedia.
I am just saying if you guys don't agree with individuals looking for potential high growth stock such as the latest chinese IPO, what do you suggest??? What other investments do you have in mind?
I am just wondering because the past 2 months EVERY sectors have gone down.
I think the chinese rules are stupid and contradictory. Tell me...what is the point of going public (seeking outside investors) if you HAVE PROFITS!!!!!!!
The chinses rules make no sense...i wouldn't go public if I had 3 years of profit. Think about that!!!!!!!!!!!