| Posted: 09 Jan 2007 21:04 | |
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Does anyone have a take on Petro China? I know Buffett is a large holder of this company. I am just an amateur investor who is fascinated with the market. I had a good run with this stock last year. It's pulling back now, but I'm guessing that is just a temporary set back. You figure China is only going to grow and oil is only going to go up, so it seems like a smart play. The one downside is that I believe the government over there has a good bit of control over the company. Anyway, I'm thinking of adding to my position during this pull back. Last I checked, return on equity, assets and invested capital all remain over 20%. All thoughts are welcomed. Keep in mind, I have no profession training. I'm just an amateur invested that really enjoys following the market.
emooreonline.com 
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| Posted: 10 Jan 2007 23:11 | |
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emoore : I have a friend who invests almost exclusively in Asian markets and China in particular . He's done very well . Keep in mind though he was very well off BEFORE he began hopping into the Chinese Market . PERSONALLY , Mainland China is off limits for me for two reasons : 1) Shoddy Banking System , it's improving but too many government roots and not enough disclosure for my liking at all 2) My personal disdain for the government there in general . As far as the government involvement in Petro China ....if it's any consolation it's the same with EVERY Chinese Company that's listed .
Money can and has been made in that market , it just won't have me as a participant . Best Regards , TBB43
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| Posted: 11 Jan 2007 02:08 | |
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There are some other Chinese stocks coming to market, I thought I saw one today called China Life that came public recently.
I agree with TBB43 about the Chinese government, I dislike them too!
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| Posted: 11 Jan 2007 19:59 | |
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Guest : I guess the Chinese Government could best be summed up as wanna be thug capitalist totalitarians . While the Chinese have embraced " capitalism " to a limited extent ( although far more so than one could have envisioned just 20 years ago ) , it is my belief that human rights and economic rights are inter-twined . One without the other won't work so well .
Best Regards , TBB43
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| Posted: 11 Jan 2007 20:01 | |
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OOPs : Looks like we forgot to LOG IN yet again !!!
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| Posted: 12 Jan 2007 18:47 | |
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bigboss: Thanks for the feedback. I agree, China is definitely a place to tread lightly in. I pulled the trigger on a small amount the other day at $125.40. We'll see how it goes. It's not a lot of money because I have my concerns investing in that region...mainly their banking system which you pointed out.
Take care, emooreonline.com
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| Posted: 13 Jan 2007 13:56 | |
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emoore : Visited your site today . I actually enjoyed reading your goals , a terrific idea too . Having clearly spelled out goals is key to making them happen in my opinion . Please feel free to click and visit one of my sites , www.allmusicnow.net
, www.certifiedsilverdollars.com or www.corinnacoins.com . Best Regards , TBB43
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| Posted: 16 Jan 2007 20:54 | |
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BigBoss:
I checked out your www.certifiedsilverdollars.com site. That's a pretty impressive collection. Good luck, emooreonline.com
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| Posted: 16 Jan 2007 22:58 | |
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emoore : Started with nothing more than you had/have....GOALS . Funny thing about those GOALS is ...once you LIST them you FIND a way to MAKE them happen !!! That's what I really liked about your site , and why I think you'll do just fine too . Thanks for the Visit !!! Best Regards , TBB43
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| Posted: 28 Jan 2007 05:51 | |
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I like China very much;I think they are friendly!
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| Posted: 28 Jan 2007 08:47 | |
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Yeah, they are real friendly. In fact, why don't you go over there Mr. or Mrs. Guest and start holding rallies denouncing their government or better yet start holding Amnesty International group meetings while you are there. I am sure you will get to see their 'friendliness' first hand. I must say, they do have some good ass tea though!
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| Posted: 04 Feb 2007 22:27 | |
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Shark : I think I'd pass on the tea too . Agreed that they welcome guests but the welcome gets icy cold when any criticism is uttered . Most folks there that are critical of the government end up with a mimimum 10 year sentence . You are released knowing full well that your next " peep " may be your last . Some don't get that lucky , finding so called Chinese justice from a mob of thugs who somehow never get charged with beating them to death .
Best Regards , TBB43
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| Posted: 05 Feb 2007 05:46 | |
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The risk associated in foreign countries or foreign based assets is subjective and should be taken in context. China is after all still a communist country, albeit one with an tailored system that would undoubtedly make Karl Marx turn in his grave, but a command economy nonetheless. It is familiarizing oneself with the economic landscape from a local perspective that allows the value investor to make his rational decisions. If investing in China were so terrible, we would have to assume that the thousands of successful Chinese businessmen and entrepreneurs - plying their trade in downtown Shanghai or Beijing - are idiots! Because how could they possibly be ignorant enough to start a business (with necessary finance and investment) in an economy so unfriendly to investment foreign-direct or otherwise. Perhaps they have a different perspective!
Israel, complete with daily raids, missile launches and suicide bombing, would have been the last place I would have considered for investment – not so for Warren E. Buffett. He even went for a visit! Perhaps his research found a different perspective. Looking into the same room from a different window. Another ignorant fact is that concerning third world or (fashionably) “emerging markets”. Emerging markets are considered higher risk and hence potentially higher returns. This risk/reward relationship results in stock markets possessed of PE ratios well below that of USA. However, the rating agencies Moody, Finch and Co. bestow on these countries a debt rating. A rating which becomes a glass ceiling known as the Sovereign Debt Rating. Which means that it doesn’t matter how world class and productive the company is, due to the ceiling it cannot be seen by foreign direct investment as having a deserved AAA rating instead is limited to the umbrella rating of the country - hence to a certain extent "false" risk.
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| Posted: 05 Feb 2007 20:13 | |
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Scarborough : We've recently been witnesses to the unfolding events in Venezuela where the communist leaning President is taking the socialist path . Several multi-national oil companies ( Exxon , BP and Conoco among them ) are discovering ( yet again ) how important government co-operation is in order to get a return on investment , or in Venezuela's case , even the initial investment back . Equity owners of Venezuela's Telecom Company have been promised less than market for their shares ( perhaps nothing in the end ) .
Equity investors face similar risks in many other countries . Only in countries with established rule of law , democratic institutions and favorable political climate are investors relatively safe from government theft in all it's forms . Isreal would rate favorably with me , although I do not hold any Isreali equities , I would be happy to should the opportunity present itself . Lebanon , just to the North , I would not touch with a proverbial 10 foot pole even if PE's were 1 or less . One should tread lightly where overseas investing is concerned , in my opinion . I do have a wealthy friend who does wonders with his overseas portfolio , which includes Mainland China , but I don't have the stomach for it or the heart either . Best Regards , TBB43
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| Posted: 06 Feb 2007 00:16 | |
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TBB43:
The risk value of a foreign country can be attributed to several factors. I see the majority thereof being grouped into the business risk and financial risk categories. The business risk may be (I believe) thought of as those factors affecting the business operations or the ease with which the enterprise can conduct daily business. This is mostly affected by availability of resources (financial, skills, infrastructure, etc) and the ability to market/distribute. The financial risks are from the investor’s perspective. These are primarily information technology based, being mostly confined to three facets: information gathering (research), deployment of funds, and extraction of funds. These three are inseparable from the banking, legal and geo-political environment. A hostile, incompetent or underdeveloped government would seriously affect (hinder) the functioning of the information gathering by not legally enforcing corporate governance compliance. The deployment and extraction of funds are the most common vulnerabilities. Banana republics like free money. If they can get it cheaply either by outright stealing it or underpaying for de-privatized assets – even better! Your Venezuelan example is prime (and also very good at that!). Not only is there the risk of losing invested funds, but (as the former Soviet Bloc as already demonstrated) a traditional communist (or under-developed socialist) system ultimately hinders economic growth and operation, thereby affecting business risk too. The strong-arming of Yukos and Gazprom by the Putin government also demonstrates this. Highly lucrative markets attract competition; stratospherically lucrative markets attract governmental interference! Another risk group which investors should consider is that containing supply chain factors. For example a typical Israeli based machine tool company may derive its production inputs and have its supply chain positioned, not necessarily locally, but in a more stable business friendly environment thus reducing the risk. If it's distribution and market are in the same friendly market even better. This would mean that the company is essentially a mailbox located in an emerging market – I personally could live with a bomb falling just on my mailbox. The other side of the coin is the unappreciated risk that US and Japanese companies carry by having the rear end of their supply chains in low cost third world countries. Surely investing in these companies is just as risky as investing directly overseas? Ultimately foreign investment decisions should be weighed against your circle competence (as is reflected in our differing opinions on Israel) and margin of safety. We’ve all heard these concepts somewhere before haven’t we? :-) I trust this hasn’t been too much waffle. S.
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| Posted: 07 Feb 2007 01:10 | |
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Scarborough : You make excellent sense and good point on the US and Japanese companies and the supply chain note . My good friend ( who has more than enough money for his needs for ten lifetimes ) does very well overseas . He keeps abreast with current news , which I think is absolutely essential . The only thing I think he ignores , is China's shoddy and state controlled banking system , which I happen to think translates into a huge potential liability for investors in Chinese Companies .
But , that having been said ,it will only be a liability when if and as the Chinese Banking System falls into crisis . That may not happen . In the meantime , there is definately huge potential in the Chinese market which boasts the largest consumer base in the world . But , because of my feelings towards the government there , human rights issues , and the banking system , I will choose to not participate , there's plenty of potential right here in the good ole' USA . Best Regards , TBB43
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