Value investment in china?

**zdplus** Mon Apr 10, 2006 10:15 pm

Value investment in china?
I saw an very interesting case on newsmth.org
which is a bbs in china.
If you look into the board stock_SMIF
, they have a stock port management competition
there. The ID htyx initiated a funding from 2004 March or so
called as "jing yuan" funding. The performance by today is
130% and it never uses margin.

The most exciting finding is that as this ID claims, all investment
is based on value principle. All the books he recommended are
these classical value investing books from graham and buffet.
It's amazing that someone made such amazing returns from early
2004 in china b/c during this period china market suffered a
very tough bear (index from 2000 to 1000). Also it's well known
that chinese market is badly regulated.

I am not quite sure if that port really followed value investment
principle. But it seems an example to show the power of value
investing. All trading records are documented on that board
of that bbs.

/zdplus

**angryangryhippo** Wed Apr 26, 2006 10:10 pm

Just be careful investing in China- even though they're may be a lot of noise and hype about "Rising China" a major problem is still and has always been

-Corruption

That as well as the mainland Chinese banking system. Good saving's conviscation banking system- bad investment banking system.

The other concern is that the Chinese government may have over-invested and over extended themselves. Same idea as myself randomly throwing money on Wall Street and being extremely impulsive and such- and by that activity I call myself an investor (More a gambler at this point)

China consumes the most construction material (particularly cement) and oil- building frenzy still strong.

US housing construction in a good year is 1 million a year. Canada has close to 10 million houses. China builds 10 million houses a year since 2000. Thats a Canada a year.

Don't forget what Ben Graham said about Mr.Market- he is wildly manic depressive and to do what Mr. Market says well, you'll probably lose money.

Personally I am very suspicious of this noise about China's rapid industrialization although I do believe that serious profit can be had- if we pick out good solid companies. The problem is always the legal proceedures. There is always the threat/reality of having all your capital assets conviscated. Or having half of your capital investment suddenly disappear.

I had family in Hong Kong- they all hate the air. Thats why they're all living in Shanxxi!

-Angry Hippo