14 Comments
author
Mar 21Author

So a $2.4/share dividend for Lufax. Looks like I guessed right. Might be an interesting strategy to regurlarly screen for large volume spikes 1-2 days before earnings.

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Mar 20Liked by IJW

you're on fire, mate! thanks

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Mar 20Liked by IJW

The big risk with Chinese stocks is, of course, fraud. The managers know they can't be prosecuted in China. The cash balances of many Chinese stocks simply did not exist because it is relatively easy to fake cash statements in China.

Maybe the situation is better now, but I am still sceptical.

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Mar 20Liked by IJW

see also this video, I think many of these Chinese stocks listed in U.S. are total frauds: https://www.youtube.com/watch?app=desktop&v=AcannSxyTww

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author
Mar 20Author

Oh yeah I agree, when investing in Chinese stocks you have to have to answer "why is this not a fraud". Kind of the opposite as with in the West, where you usually only start to worry if you see something fishy.

That is why I stick either with companies paying large regular dividends, or with companies that have particularly credible insiders, or large shareholders such as JD, Tencent or in this case Ping An.

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author
Apr 1·edited Apr 1Author

It's funny how 3/4 of last two quick idea posts worked rather well, but they got far less likes than my other posts.

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This Lufax situation is pretty funny. Well played!

I didn't bite. The "I should to less trading, more investing" - angel on my shoulder won this time.

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author
Mar 21Author

LOL yes it won many times for me as well, but this time I beat him.

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45% yesterday!! As a Chinese stock watcher, I would say fake cash is not often in this days than 5 years ago!

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This $LU screens like "danger". That Valueinvestorclub write up was from 2022 and in the meantime, the share went down 86%. The company recently did reverse stock split so that it the price is above 1$ so that it can stay on NYSE. The company has shrinking revenue and profit quarter by quarter since exception.

So the only positive things is backed by Ping An and jump in HK shares comparing to US shares.

If it is arbitrage opportunity than the stock is 15.42% Higher in HK than in USA, sure, but at the same time one can buy Bank of Communications in Hong Kong for 24.67% Lower than in Mainland China, so there are better arbitrage opportunities probably.

I wonder if Turtles is legit actually.... or another pump and dump scheme. I think that when I followed a substack stock, that it was a really a bad trade. In some circumstances although, stock was fairly large, and not the pump and dump...

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author
Mar 20Author

At 1700 subs of mostly retail investors, I am nowhere near big enough to pump and dump a nearly $2 billion stock.

And of course these posts are merely ideas that I am sharing, not investment advice. I expect readers do their own due dilligence before buying anything. If you think this one is too dicey I completely understand that. And I welcome any constructive feedback.

Also I am pretty transparent about performance of ideas I am sharing here. Most have outperformed the S&P 500 over the period that they were active (which is no guarantee that Lufax will outperform):

https://www.turtlesresearch.com/p/list-of-current-open-and-closed-ideas

Most of the stocks I am posting are pretty liquid and some stocks suck as PAGS, FIXX, CE, TIM, VNT, CPH have continued to significantly outperform after I closed them. So I don't think I can be accused of being a pump and dumper.

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Mar 20·edited Mar 20

First, thanks for the answer. Secondly, it seems I did follow one of your write ups, Kinetic Development, but decided not to sell (good decision until now) and bought Consun Pharma months before you mentioned it, currently at 10% of my portfolio. It's now trading at 5.84 significantly higher than your exit at 5, I think this could easily go to 8-12 but the stock has some yellow warning signs as well.

Anyway, I have noticed that you don't pay attention to business quality and business risk, mostly writing stuff like "high cash, low FCF"... While it seems it works for you, that's very risky.

I'm sorry for thinking that you might be involved in pump'n'dump as I have seen many substack and similar ideas and for me, most of the time I have followed someone the position dropped significantly, it could be a bad luck although, I have seen very detailed write ups with loads of info from people with the knowledge, but the purchase turned out bad to me. Konako research i.e. specifically, very detailed, good write ups, but I had a very bad luck with stocks mentioned there.

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author
Mar 20Author

Usually in these quick ideas posts I don't go into too much detail. I probably should a bit more, but in this case it was rather time sensitive. The Lufax VIC write-up has an extensive portion dedicated to risks.

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wtf are you talking about?

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