Stock Gumshoe

I haven’t written much about Robert Hsu and his China Strategy newsletter lately, but back when China’s markets were shooting out the lights last year he was probably the most popular newsletter editor out there. This year has seen a reversal of so many different Chinese stocks, and a loss of faith in the China growth story among many investors, so I thought we might take another look at some of his favorites now that he says the China market is full of bargains.

I can certainly sympathize with the general feeling of any China-focused investor — two of the stocks I’ve written about as “Ideas of the Month” over at the Irregulars site are Chinese companies, and though I still like them and think they have bright futures, they’re both down at least 40% since I first wrote about them. China’s not going away, and its economy is not going to stop growing — if it does and they stop coming up with jobs for those millions of people who move to their cities every year, they’ll have a revolution on their hands. But that doesn’t mean that Chinese companies are good investments, or well-timed investments — that’s a much tougher question.

Robert Hsu, who has generally been much more momentum focused in his picks (or maybe it just feels that way, since most of his stocks were in incredible uptrends all of last year), thinks that the market is going to come around and embrace Chinese stocks again. Here’s an excerpt:

Read the rest of this entry »

This is part of an ad that we’ve looked at before in slightly different form — the other “Billion Dollar SSE” we looked at was General Steel Holdings back in July.

What the folks at the Motley Fool’s Global Gains newsletter mean when they call something a “SSE” is a “state sponsored entrepreneur” or “state sponsored enterprise” — that’s a term they use for something inbetween the tiny mom-and-pop firms in China, and the huge state-owned companies. These are midsize companies, though many are really small caps in the context of the US stock market, and they usually have good connections to the government but are privately owned and managed by entrepreneurial founders.

In general, I like the theory — these are the companies I am most comfortable with in China, too, though they are certainly not guaranteed successes. And I have some financial interest in a few of them (though not the main one covered here today). Small companies that are either consolidating industries or growing organically in a huge market are usually more compelling for me than are large companies that are owned by the government and may have other priorities beyond growing shareholder value (or a big overhang of shares if the government decides to sell). Not always true, of course, that’s just my general feeling.

So what is this latest teaser company from Bill Mann at the Motley Fool? Here’s a taste of what they’re selling … Read the rest of this entry »

A few days ago I noted that if there were a reasonable Chinese cement company to invest in, that I’d consider doing so. Immediately, several readers tossed some ideas on the pile for me to consider … and though it was a throwaway comment, more or less, I thought I might better take a look.

Especially when a few folks alerted me to the fact that one of the new services from Casey Research, called Without Borders and put together by Fitzroy McLean and Simon Black, recently began teasing a Chinese cement company as one of their favorite low risk picks.

(My comment that started this, by the way, was in the context of me noting that I sold my shares of Cemex last fall, partly because Cemex is so heavily weighted in the Western Hemisphere and the US and has had trouble getting into Asia — clearly, that decision to sell on my part was quite premature. So, another good reminder for all of you that I can be an idiot. Doubtless many of you didn’t require such a reminder.)

So let’s dig into this Casey pick for a cement company. What kind of clues do we get? Read the rest of this entry »