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Wednesday, September 23, 2009

Remember this?




Remember these pictures taken in December and in March? That were plastered around the world to show we were heading for Armageddon?

How did that short on Ford work out?

Now remember last week, when we saw those pictures of idle ships?


And how Maria Bartiroma was breathlessly intoning about the fall in prices in the Baltic Dry Index yesterday? How she was concerned that world trade was slowing?

Says who?

China is now projected to have growth of 8.9%. Now that wasn't supposed to happen! Did anyone think that maybe trade is doing fine, thank you, but prices are down because we have some idle ships? So short the shippers at your own peril. Just like these brainiacs got courage to short Ford at the lows because they saw the cars stacked up at the ports. But no-one wants to make that analogy now. Especially since the stocks of the shippers are down. Just like the stocks of the auto companies were, when you had the above pictures!

But if you missed those auto plays, and you missed Buffett's 8 bagger in Hong Kong with his first $230 million bet for 10% of Chinese electric car and battery maker company BYD, you now have another shot at redemption. That company is trading at over 60X earnings.

Now you have the next play. Goldman Sachs just put $250 million into Chinese car company Geely, (HKSE: 0175.HK) via convertible bonds and warrants.



It's currently selling at about 10X earnings. You will get a PE expansion on this name, with Goldman's bet.

And it should turn out, just like Buffett's!

9 comments :

Anonymous said...

do I buy GEELY AUTOMBLE HLDGS LTD (Public, PINK:GELYF)? It's 0.370. The accounts at eTrade and sharebuilder only allow me to buy PINK sheets from geely -

Thanks

palmoni said...

yes

Anonymous said...

MGOL falling quickly back to 4$. Cant win em all Palmoni, this is a sinking ship, get out while you can folks

Anonymous said...

well at least GELYF is doing well.. Good timing on the recommendation P, co-incidence? prob not, LoL! well done

Anonymous said...

Hey Palmoni,

You think MGOL is selling the shares on the open market which explains the $5 price? I recall reading in their SEC filings that they did a few private placements at $5.

Anonymous said...

i can't really trade this stock....need to buy at least 5k shares and it's gotta be called in.

Palmoni said...

No the $5 shares were resticted and the buyer of the $2 million worth was a multiple hundred million entity.

I think it just that someone puked up shares, and the market makers took the stock down to take them, and nothing more than that

Anonymous said...

GOOG above $500 just like you said Palmoni! (a wee bit later but who's perfect)

Palmoni said...

Finally--better late than never!