Remember the Asian Crisis of 97..Do not miss the boat again!!!

You\'re spot on Eason...easier said than done sometimes and you keep having to reminding yourself about the target price 5 years from now. BTW, I\'m big about having a business moat (sustainable competitive edge) before buying a company. From your point of view what would be the moat for.. 1. Beauty China 2. Sichuan 3. China Sky (as opposed to LiHeng, Fibrechem) The question is really sometimes do you buy good companies at fair prices (Warren buffet and charlie Munger) or fair companies (Benjamin Graham) at low price.

Cheap can get cheaper... DJIA should hit 6,600 very soon. Take care brother.

5000 was the number on the street...again same guys were so darn sure of oil at 200 or the same guys calling for gold to be 1500...either way always extreme.. Well maybe it is good the DOW go to 5000, the faster it gets there even perma bears may jump ship to bulls camp.

Hi Gary, you look depressed like other investors now!? Yes, you are correct; I admitted we are easier said than done actually. Even some time, the ridiculous of Mr.market perplexed me to suspect my conclusions were gone wrong, when the price of the share drop and drop sharply. It is extremely wear down my spirit and consciousness! I know that, it is hard to encounter to the majority, but I believed that, the triumph or treasure is always belong to the minority eventually. During this perplexing period, I keep to reviewing my finding and conclusion in order to reminding myself I didn’t do wrong. This happen was only I do not know where is the bottom price. I convinced myself often to believe and confident to my decisions. Honest to say Gary, my target is not for 5 years even 10 years. My hold time is only until to the next bullish market, which I don’t know when it is, but expected 3-5 years from now maybe. From my point of views: 1. China Sky. -I was fascinated by it EPS Growth Rate. -It’s growth rate was faster than my estimated 15% per-year. Started from 2005, EPS is rmb 450. Year (estimation EPS 15% growth per year) 2006 = 450 x 1.15 = 517.5 2007 = 517.5 x 1.15 = 595.1 2008 = 595.1 x 1.15 = 684.4 2009 = 684.4 x 1.15 = 787.1 2010 = 787.1 x 1.15 = 905.1 Real: 2006 = rmb643 2007 = rmb821 -High profit margin, the profit margin look increasing from 2004-2008. This maybe it is not a Price Competitive company, due to it is producing high quality nylon. -Low debt and financial stable, ROE stable maintained (so far) -Rationally reacted by management. (Acquisition of Zhongda- try to expand it’s business when in high cash level. This given me a message that, they have aspiration to growth it business but no too aggressive but stable growth. I believe they have a plan to use the cash. However, I’m observing they how to use the cash. Hope they can acquisition a company again during this crisis). -I hope textile sector getting worse again, this can expel more uncompetitive companies. I believe China Sky can survive since they held for high cash and lowest debt. -NAV S$0.8x and Net cash S$0.3x, it is a very worth to buy in at S$0.18. If it attributes rmb 0.10 cent for dividend, it is 12%. Now is super discount! www.zdfibre.com/cn/news_d.asp?newsid=68 Disadvantages a. Probability mis-evaluation due to misleading of Financial report or management b. It is a supplier ( selling commodity product). However, the above is my personal point of view, if i have went wrong, pls comment! For Liheng, it is due to lack of information or history that i can use to monitor and evalution. so i rather chose China Sky which have a good record so far. For me, China Sky was a good companies at a fair price, some more also a fair companies at low price. what to you think? 2. Sihuan- lack of information, history and data. so under observation. Gary, may i question you why you buy a lot of new listed companies without pass record or data like china taisen, liheng, and zaino. How you evalute?:S

Hi Eason, Yes, I will be lying through my teeth if I said that it does not bother me that my portfolio is taking a big haircut in a span of one week. Even as much as you try and rationalise, sometimes you do loose some sleep wondering whether you got it right..actually to think of it what worries me is not the price but whether the business (companies) that I selected to invest (purchase) is indeed the right one for the long haul even after in-depth analysis. There is always an element of doubt somehow for information that is not public or that the management is not transparent or will not act in the best interest of common stock holders. China Taisan I like the business for many reasons among others 1. Being the primary supplier to major sports brands. 2. Continouos investment in R&D which will sustain it\'s competitive edge. 3. Balance sheet strength (debt free) 4. Focus commpany As for China Zaino. 1. Market leader in backpack segment. 2. Trying to win over market share in the luggage space taking on Samsonite with value proposition. 3. Focus company 4. Balance sheet strength Li Heng 1. Biggest company in the chemical fibre segment compared to it\'s listed peers. (Sky, Sinotech, Fibrechem) 2. Dividend yields 3. Balance sheet strength 4. Insider buying by directors and major shareholders 5. Focused company. That would an oversimplified reasoning of why I like those companies. If you notice, I am bias towards companies that are focus on their main business and continuously seek to strengthen their position instead of diversifying into business that are not their core strength. Yes I must admit that their listed track record is not one of their core strength and that is in my books a negative but then again it does not weigh heavily on my criteria. I do have another two companies that have a better track record but it was not part of my decision making process. They are.. 1. Celestial 2. China Milk I should think that most would agree that both have solid fundamentals in a very attractive segment - food. Celestial recently had being sold down aggressively due to the fears that they would not be able to refinancince the bonds coming due this June 09 or will be able to do so only at much higher cost. Although they may have enough cash (if it is there) in their balance sheet to redeem all in full, that will affect the working capital and strain their long term plans for expansion. China Milk - This is my personal favourite. Although the recent quarterly report was less than impressive, they did grow the top and bottom line and still holding out impressive margins. The melamine scandal is a big inflection point that now the Chinese farmers understand that there is no shortcut for good quality milk - they need good quality cows and china Milk can help them do that. They are indeed unique in the milk supply chain in a very competitive market but huge and growing market. Their investment in R&D and also increasing production of milk will be their main drivers of growth going forward. Disclosure; I have invested positions (higher prices) in the above companies mentioned.

Why retail investors are starving themselves to death Clif Droke Since the market bottomed and the new cyclical recovery bull market began, retail investors have gone on a collective buyer’s strike. Call it a “hunger strike” if you will. The retail crowd is effectively starving itself by missing out on some remarkable recoveries in recent weeks and will most likely continue to miss out on these opportunity until they simply can’t take it anymore. In other words, a classic repetition of the idealized market cycle is setting up perfectly. So why exactly are retail investors starving themselves to death by refusing to participate in this most profitable of turnarounds? Answer: Because of the most powerful of all human emotions, namely fear. The lingering fear and pessimism from last year’s abnormal market plunge put most investors in a state of catalepsy that persists even now. They are too frightened to take their capital out of zero-yielding “safe haven” investments and put that capital back to work where it is being most rewarded right now, namely equities. When will these retail traders finally work up the nerve to re-enter the market? Answer: At the top. With the passage of each week the market is giving us more and more signs that a real recovery is afoot, not just for equity market for prices but for key industries and economic segments as well. For instance, several weeks ago I mentioned in this commentary that a leading indicator of industrial commodities demand, the copper price along with the price action of Freeport Copper & Gold (FCX), were pointing to increased demand from overseas. This in turn harbingers a recovery in the global economy, which bodes well for the U.S. economic recovery. Freeport’s stock price broke out of that 4-month lateral consolidation base as anticipated and has rallied nearly $15/share since the beginning of March.