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China the monster.
kahuna1
post Posted: Dec 19 2005, 10:44 PM
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Hi Forevertold ...

Thanks ... Be warned ... like everyone I get it wrong sometimes. Badly .... sometimes it happens. So be careful.

Motorway ....
YepI here u ... and as I just said sometimes I get it very wrong ... maybe the case here with SSI. Just over the years have had a lot of fun and games with old chinese fortune cookie companies. Learnt my lessons cheap many years ago. So suppose bias against them after seeing over the years a whole host of them fail to deliver.

Very wary of them ... and as u know tend to stick to big ones ... even given up to a great extent commenting on smaller ones that seem to be built on a house of straw.

Impossible to prove a negative ... and very hard to even convince the faithful.
Waste of my time. Tried saving too many crowds over the years ........ Lum was a classic
Sometimes you get it all wrong ... but most of the time ... 90% u can spot them.
Of course some times I get sucked in with a big story ..... I check for all the signs but boy some of the porkies that can be told.

My ditty here on China ... is as all the others who have helped very much a maybe ... one cannot know where the price of oil will be next week let alone next decade.

Santa has been very good to me this year with a few loves going nuts ... hopefully 2006 is just as good. Became convinced like most the popular view by every economist and analyist about sharply falling prices as time goes on ... but evidence if we look at oil as a prime example up almost 50% in 12 months. Have economies slowed ? Has inflation spiked ?

So when the same argument is wheeled out for the top 10 commodities I think in short they have got it wrong. All different markets and drivers in them ... sure some will come off sharply ... but others like coal which I look at as a leading indicator ... well it isn't which leads me to suspect views about 30% off Iron ore are wrong ... and nickel.

As Dee and Geog and a few others have said its probally an in between price correction that we see going forward. But longer term I am not sure it is wise to be discounting prices for commodities looking forward given what in reality is going on.

One thing on SS I talked about at length, don't I always :} was the oil market. For over 30 years the forward contracts in the oil market were cheaper than the spot. In other words to buy oil now may have been US$60- but 6 months forward you could buy it for US$55-. The forward price was in discount and it had nothing to do with interest rates or holding. Now this market for the first time ever as one looks forward the price actually rises. In the past everyone was a bear on oil ... its always going to come off ... thats was 1971-2004 !!

My main gripe with these low forward numbers being used by analyists for say 2008 oil and a host of other commodies that can be covered forward and hedged for producers ... and are hedged. Oil for example ... analyists and economists predict oil will be US$40- in 2008 and use this number to calculate the NPV of WPL on this basis. Fact is Dec 2008 oil futures are in fact US$59.70. Thats almost a level 50% over what theya re usuing to arrive at an NPV for WPL of AUD$44-46 between the lot of them. Same with Nickel, gold, copper and so on.

In fact a spastic could hedge himself for no cost ... none at US$55- in oil. Grant a US$65- oil call and buy a US$55- put for DEC 2008 ... either way at worst u get USD$55- at best US$65-. Slightly exxagerated there ... oil needs to be $1.30 higher for zero cost ....

But here we sit ... valuations based on prices 50% below reality. Its worse than that even.
If it costs US$25- to procude the oil at US$40- it leaves US$15- profit which is what they NPV. Big difference Usuing say US$55- for 2008 oil with a profit DOUBLE to start the NPV.
Its why I have been spazzo about WPL all year.

Same stuff virtually everywhere. Some like copper I would agree with since the price drops off sharply as the contracts go out. Spot is 216 and 12 months is 180 ... but ones which are hard to find prices on like coal ... what do we go back to ... the 10 year average.
Since China 10 years ago still had a similar population but the GDP inflation adjusted was 46% of what it is now ... well it doesn't make sense given the 2006/7 prices just set.


Either way BHP,RIO WPL and co are all way way below even current NPV prices usuing these heavily discounted forward commodity prices. Market is really having trouble coming to grips with the 2005 reality. BHP with a predicted 9 billion number this year and still 40% expansion to go across the board ... this year it will be a P/E under 9 if correct and I presume the market will correct BHP's price to say a P/E of 11 so $25.50 ... and we will always be playing catchup.

So for me its a buy on corrections and dips.

Wait for them .. we had two dooseys this year 7-8% ... and as always they will happen again when we least expect it.

Just sell into rallies ... u love the stock ... the higher it goes the less you should love it.
If it goes too high love should turn to hate .... and wait again for the correction.
I even sold my WPL last rally ... too early ... but not this time.

WPL ... classic ... market corrects 7.6% ... WPL 19.4% .... 36.25 to 29.20
back to new high ..

BHP last correction $22.48 to $19.40 .... 13.7% ... so BHP was positivly strong compared to WPL's demise last correction. Then again ... BHP has failed to break its old high ... WPL on the other hand a new high 5% higher.

Time for bed ;}





--------------------
All views expressed are my own opinions. While I take every care when posting no guarantee to the absolute veracity of the postings is given or implied. Please do your own reseach and consult a professional investment advisor before investing.
 
motorway
post Posted: Dec 19 2005, 09:38 PM
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In reply to: kahuna1 on Monday 19/12/05 09:19pm

Well I wish you well kahuna1

And yes I have BHP RIO WPL etc etc...

They have been great

but not in SSI class

the shares you are referring too

Where in payment to BW for CEH

see in the announcement

"to acquire 100% of its
wholly owned subsidiary, China Entertainment Holdings Ltd (“CEH”), in return for issue of
shares in SSI to Best Winning. This agreement is subject to a number of conditions precedent
and the obtaining of approval from SSI shareholders. As part of the agreement, Best Winning
will also be subscribing for additional shares in SSI for cash at A60 cents per share upon
completion of the agreement. "


NOTE ... IN return for shares... and then additional shares at .60


It is all in the announcements

In any case anyone is interested ... See you in the SSI thread

YES commodities are King

I have them on the buying list

SSI get a hold hold of the Carmicahel report and tell Us how much to multiply

the figures with nation wide expansion ??

Or why is tattersall's talking about a JV...( see BRW article )

Why have they gone up.... DAYTRADERS ????

Why Gilhooly and Matheison on board ??

etc etc...



Hey spot... SSI is the best performing stock on the ASX

That makes it best performing stock in peoples portfolio or mentioned on a stock forum

It is something to learn lessons from ( let's hope rewarding ones for holders )


Good fortune to all

Will leave this thread for commodities

and the excitement I hope In the Sino one



motorway


 
forevertold
post Posted: Dec 19 2005, 09:37 PM
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In reply to: kahuna1 on Monday 19/12/05 07:32pm

Hey Kahuna,

I would just like to say that I enjoy reading your posts and learn something new each time. Keep up the good work and thank you.



 
kahuna1
post Posted: Dec 19 2005, 09:32 PM
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Oh I found them .... the SSI shares ...

So dont bother Moterway.

Unquoted securities: 32,150,000 ordinary shares escrowed until 2
November 2007

yes the market has the company with a market cap of 258 mio .... boy.

Wish u well.

Oh and checked the date on the top 20 ....
of course the date is before or at the issue ..... 2/11 .... as opposed to the actual date on the top 20 release on the 8/11.

So I suppose ... my mistake about the top 20 being incorrect. Must say it is interesting however the choice of dates .... announcement on Tuesday 8/11 a top twenty list as of the previous Wednesday 2/11. Since the escrow period I am sure appears to be 2 years for this chunk ... I am not sure this even is a correct representation as of 2/11 since the share come out of escrow 2/11/2007 ... I would presume they were issued on the 2/11/2005 funny they dont appear on the top 20 list for that date.

The rest ... yikes.

All the best



--------------------
All views expressed are my own opinions. While I take every care when posting no guarantee to the absolute veracity of the postings is given or implied. Please do your own reseach and consult a professional investment advisor before investing.
 
kahuna1
post Posted: Dec 19 2005, 09:19 PM
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In reply to: dee27 on Monday 19/12/05 09:44pm

Hi Dee ...

Yep I think u are probally right there.

Not suggesting the commodity prices go up short term ... I suppose the 25% discount for 2008 and beyond is my point. This is how they are working out the NPV values besides also discounting it as well for resources not yet pruduced to arrive at the present value.

Just not sure how correct it is. It is the traditional way of working things out ... and usuing I suppose a 5 year average price for the forward estimates is how they arrive at it. Frustration I suppose is what is driving me ... and its a lagging indicator but given what I presume is reality right now having say todays prices for oil discounted in this case by 33% for 2008 and beyond and then working out net profit if oil is there after costs and then discounting it back at 6% each year to arrive at the present value is the tradional way of doing things ..... but a 33% discount for oil, a 25% for coal and Iron ore.

Suppose I am jumping the gun here but in reality just dont see the scope of falls short term for any of the commodities. Oil is special and in fact I see it here or higher as time goes un ... but the supply vs demand equation for copper or nickel or Aluminium or coal and iron ore and gold and urnaium all look very similar.

Will be interesting to watch as it unfolds.

Motorway ...

Look mate ... u like SSI fine.

And the amout of actual shares out there for this company ....
27.606 mio quoted on the asx...

they did produce a top 20 quoting this number .... which given the following appears to be incorrect and at best misleading given page 3 of the 3B!!

then when one reads the 3B for the quoting of these new shares ...
page 2 securities not quoted on the ASX ...

9 Number and +class of all
+securities not quoted on ASX
(including the securities in clause 2
if applicable)
2,800,000 Partly paid shares paid
to 1 cent with 49 cents
outstanding
500,000 Partly paid shares paid
to 0.1 cent with 79.9
cents outstanding
32,150,000 Restricted shares

There appear to me to be 27.6 + 2.8 +0.5 +32.15 mio = 63.05 million shares.

These mystery shares ... 32.15 million of them appear on the last 3B and for the life of me I cant see where they come from ..not that I care given the market cap ... maybe u could dazzle us with what the 32.15 unlisted restriced shares come from.

As I said a Chinese fortune cookie

at $4.10 it makes a company that is making nothing ...
has 10 million in the bank
valued by the market at $258.5 million.

Couldn't be bothered saving the world .... but I did look at your company SSI and spent the time and decided no thanks. Hear this sort of fable so many times ... OCO makes good reading if u want a directly linked to China comparison.

So no thanks.



--------------------
All views expressed are my own opinions. While I take every care when posting no guarantee to the absolute veracity of the postings is given or implied. Please do your own reseach and consult a professional investment advisor before investing.
 
balance
post Posted: Dec 19 2005, 09:01 PM
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In reply to: dee27 on Monday 19/12/05 09:44pm

Oxygen booths and respirator/ filtered masks will be the place to invest.only half serious but I cant imagine what unbridled HC emissions of oil and coal will do there over the next 30 years.
Energy.
As for keeping them on the farm.That is a serious issue.Aging parents now only have the one son to look after them and their farms.No money in it and cannot manage that so farming land is going underutilised as the sons go to town for work and wives.
Saw a sad doco on this not so long ago. Tens of millions of bachelors who will inherit a farm without value no one to work it and without a wife or hope for a family.
One child policy has both saved and damned them.



--------------------
Day Trader: Lowest form of life in the known universe.
Shorter: Can limbo under a day trader.
Investor: Salt of the Earth.Sits to the right of God (Warren Buffet)
Share prices are only ever manipulated down.
Paper losses are not really losses.
Chat site posters always know better & know more than anyone about anything.
I'm 29.
The cheque is in the mail.
 


dee27
post Posted: Dec 19 2005, 08:44 PM
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In reply to: kahuna1 on Monday 19/12/05 09:26am

Interesting post Kahuna

The situation may play out differently according to the fundamentals of each specific commodity and you may well be right about coal. I suspect the truth may be somewhere in between your position and that of Peter Hall.

Pretty hard to keep the Chinese on the farm when they've seen what's happening in the cities.

What all this escalating industrialisation and consumption does to the environment is another question blink.gif

Best wishes D



--------------------
From little things big things grow.
 
motorway
post Posted: Dec 19 2005, 08:36 PM
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Kahuna1

There is Bunkum and Bunkum

Your presentation of the issue at .60 is Bunkum

Yes READ that is R.E.A.D the announcements


Why because you would then know that SSI was not $3.00

But without looking at a chart more like .20

It was the price nominated to structure the deal

The mkt was fully informed
Did you read it then on the 16 may 2005

It is why the shares have gone up went up and are going up

The buying started from day 1 with this announcement

and yes We all new the issue was to be and would be at .60

To suggest that this is a new placement way below mkt price

Is to use your word ( Why the language ? ) Bunkum

stocks like SSI are hard to find without people presenting material
in way that is bunkum..

I see No evidence in the mkt since the announcement that this had been a negative issue
This announcement has be positively received

DJ Carmichael research report anticipated many more shares to be issued than in the end were...

Same I think with the focus material...

Ok It pays to read the announcements
and to keep perspective

Do you reckon the mkt likes what it saw here... Do you think .60 was a negative ?
Or is it very likely the early adopters realizing the value obtained
Have been stumping up their dollars ??

your call

I think SSI is the china play

By the time the issue was made the shares were $3.00 or whatever

BUT that was because people were paying that much to buy them
in full knowledge from 16 may 05 that there would be issused shares at ..60



motorway



16 May 2005 No of pages: - 1 -
(including this page)
Australian Stock Exchange
Company Announcements Platform
Dear Sir/Madam
Re: Merger of Sino Securities and China Entertainment Holdings
The directors of Sino Securities International Ltd (“SSI”) wish to advise that SSI has entered
into an agreement with Best Winning Investment Ltd (“Best Winning”) to acquire 100% of its
wholly owned subsidiary, China Entertainment Holdings Ltd (“CEH”), in return for issue of
shares in SSI to Best Winning. This agreement is subject to a number of conditions precedent
and the obtaining of approval from SSI shareholders. As part of the agreement, Best Winning
will also be subscribing for additional shares in SSI for cash at A60 cents per share upon
completion of the agreement. The merger of the businesses of SSI and CEH is expected to
create a significant ASX listed entity focused on the development of entertainment business
opportunities in the People’s Republic of China (“PRC”), as well as Internet media and
communications. SSI shareholders will be provided with full details of the transaction
together with an Independent Expert Report in the notice of shareholders’ meeting.
CEH is involved in the lottery and keno agency businesses in the city of Shanghai, a city with
over 20 million people and is widely regarded as the most commercialized city in the PRC.
CEH has secured a number of permits for the administration of keno and lottery businesses.
CEH has also access to over 500 retail outlets in Shanghai for the conduct of its businesses.
Despite the early stage of development of the welfare gaming industry in the PRC, in the 5
years to 2002, industry revenue grew at a compound annual rate of over 33%, due only to
lottery revenue. The addition of keno, with much higher play frequency, from this year on is
expected to lift the Chinese welfare gaming industry revenue and growth rate much further.
Due to the mature nature of Australia’s gaming industry, the Australian gaming industry has
much to offer to the Chinese welfare gaming industry in terms of operating and management
expertise and insight into future industry development opportunities. The Sino Securities
group, via its subsidiary GoConnect Ltd, has also access to mobile gaming and Internet media
technologies that will further assist the development of CEH’s entertainment businesses in the
PRC.
As a result of the proposed acquisition of CEH by SSI, the announced proposed initial public
offering of shares in CEH will no longer proceed.
Yours sincerely
Richard Li
Managing Director
Sino Securities International Ltd

 
spot
post Posted: Dec 19 2005, 08:33 PM
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SINO STRATEGIC INTERNATIONAL LIMITED ... lol

.... well with a name like that, which gives no intimation of what economic field it is in, it sounds like a bunch of crap which is going to end badly.

now what is the best way of getting exposure to China? .... i think the answer is simple ... buying aussie resource stocks ... and for me it's as simple as buying WPL. the only other thing i watch for in this regard is how the AUD is performing. well the AUD is looking good so i don't have to worry about hedging my exposure to the AUD.

i've owned FXI on the NYSE which is laden down with some old dinasaurs ... got out of that and got exposure to Petrochina on the Hong Kong SE ... before exiting that on price weakness .... and the reason for this latter ... now get this, lol, and you thought telstra was a regulatory nightmare.. THE MAINLAND GOVT FORCED THE MAJOR REFINERS TO SELL PETROL AT A LOSS TO KEEP PRICES DOWN.

the answer to the following question is the crux of the matter ... if they could chose only one company , which aussie company would Chinese interests buy in toto if they were allowed to?

i think the answer is Woodside Petroleum ...up again today i see... go lads, play hard ball with 'em!



 
kahuna1
post Posted: Dec 19 2005, 06:14 PM
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In reply to: motorway on Monday 19/12/05 05:27pm

Bunkum ....

SSI ....

Read the announcements 27 mio shares quoted on the asx .... 35 million others ....
62 million shares at $4.10 ? and the company is worth 250 mio .... no income maybe 10 mio in cash ...

They just issued 10.5 million shares at 60 cents when the share price was $3.00

Chinese fortune cookie if I ever saw one

Eeek ....



--------------------
All views expressed are my own opinions. While I take every care when posting no guarantee to the absolute veracity of the postings is given or implied. Please do your own reseach and consult a professional investment advisor before investing.
 
 


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