Hi Sean, For China Milk the moat is wide due to the following. 1. High barrier to entry 2. Focused 3. Geography 4. Establish leader 5. Political - it is almost impossible to import Holstien due to Mad Cow fears Plus a few more..but you get the point. It takes a lot to displace China Milk..and even then it may not be successful.
Hi Gary I have a portfolio here currently which I would like to hear your advice or shed some light on which i should sell or hold or add more to in the LONG term:- 1. Venture Corp (22%) 2. China Milk (16%) 3. Celestial (15%) 4. Swiber (13%) 5. Sinotech (10%) 6. Li Heng (9%) 7. Mercator (9%) 8. China XLX (6%) So far to date, the portfolio has fallen by 30% from its original value.
Hi Sean, Your percentages % are by $$$ amount invested, I assume. Your portfolio is fine. The concerns I have is only for Celestial and Sinotech. I have written enough about it and silence from parent of management is not helping plus all the controversy about S-Chips is just killing the sector. As for China Milk, I talk to the CFO last week and apparently they are least concern about the controversy surrounding the S-Chips and they feel being unfairly punished. Right now they are working out how to buy back the CB at a discount and once they do you\'ll see the price soar as it will proof they indeed have the cash plus they are generating lots of FCF. The only concern I have about China Milk is the JV with the local government and the price for the JV paid. I do not understand the reasoning for the pricing whether it is a boost to current earnings or not. If they make it through somehow their share price can easily recover 200% over the next 6 months.
hi gary, I have a strange faith in Celestial, esp they have posted higher earnings for last year? The margins still look intact with higher selling prices, i suppose? I just wished i had waited longer so that i could buy now at a much lower price & risk with more holdings. Shall see the next few quarters how it and others fare then before relooking at the portfolio to make any needed adjustments. A lot of uncertainties & too much that i cant understand to correctly select the best ones. Not really looking at how much they can recover, just hope that my capital can at least be preserved in the long run. thanks.
One\'s entry price is close to impossible to time, so don\'t beat yourself up for not buying at a lower price. For me, I just tell myself not to try to catch the bottom and just to buy based on valuations. The key is to NOT focus on the daily share price but on the business instead. The share price is only relevant if you decide to BUY or SELL, otherwise we are at liberty to completely ignore it as it elicits strong psychological reactions. This was documented quite succinctly by Benjamin Graham in his \"Intelligent Investor\" book. Over the past few days, I\'ve increased my shareholdings in several companies as the index has plumbed new lows (I use the STI as a barometer of sentiment, a rough guide no doubt). As long as my time horizon is long enough and I feel the companies have good long-term prospects and are being offered by Mr. Market at good valuations, I will accumulate. It does not concern me if the price plummets more after the purchase, because if you carry on waiting for the \"lowest\" price to buy you may end up never buying in the end. Just my personal thoughts no this.
assuming the business goes on as normal, but investor confidence in the company does not return? My only worry now is that when the economy returns, some of the share prices may just never recover. The point to admit is that I have made a mistake in being too impulsive, overbetting on earlier lump-sum purchases rather than adopting a dollar-cost averaging approach, otherwise I would have minimise my risk by buying lower now. The harm has been done before I realized it now, and hopefully the portfolio can still survive out in the end to be ok in the least.
