Thursday, November 6, 2008

Robert Hsu joins the Sell Above club

After Mr. Navellier started to use Sell Above prices in his $5.000/year Global Growth service, Mr. Robert Hsu decided to use the same approach for one of his stocks: ASIA.

Mr. Hsu bought ASIA on July 30th 2008 and convinced his $3.000/year paying subscribers to do the same with the following words:

I want you to buy ASIA under $15. I'm targeting $20 in the next six to eight months, which would give us a nice 33% gain.

Price was $13.48.

In the following weeks ASIA prepared to drop and Mr. Hsu was writing:

  • Continue to buy ASIA under $15.
  • Buy AsiaInfo under $15.
  • Buy under $15
  • I want you to continue to buy ASIA under $15. (saying please woud have been more polite...)
  • [...] a coming rally in Chinese stocks and strength in the country's economy should boost our shares of [REMOVED] and AsiaInfo (NYSE: ASIA). I know that these holdings have been battling some severe market conditions, but they have all held their ground relatively well. These companies have solid fundamentals in strong sectors, and I look for shares to improve especially as we reach year-end and Chinese stocks move up. So continue to buy [REMOVED], and AsiaInfo under $15. (that was September 3rd and I am sure you witnessed the rally...)
  • Buy under $15
  • AsiaInfo Holdings (NASDAQ: ASIA) shares have traded slightly downward lately. [REMOVED - Septembe 17th - at this time he was slightly down 30.1% on ASIA]. Buy ASIA under $15.
  • Buy under $15
  • Buy under $15
  • On October 8th, down 45.6%, Mr. Hsu started to say Hold ASIA
  • Hold for the next 3 weeks and...

Finally, yesterday Mr. Hsu wrote:

AsiaInfo Holdings (NASDAQ: ASIA) announced its third-quarter results last Thursday. The company's income was $6.1 million or 13 cents per share, slightly below last year's $6.3 million. ASIA's revenues clocked in at $44.8 million, up from $32.36 million last year. Although top-line growth is healthy, the decline in the company's profit margin is a problem.
The stock has bounced nicely with the broad market, and we will wait to sell it above $12.50 with a limit order. Hold and sell above $12.50

Now ASIA is at $11.23 and it should gain 11% before reaching its sell above price of $12.50. We have only 2 options now:
  1. ASIA will go down. The sell above limit will not be reached and Mr. Hsu will lower it, losing more money.
  2. ASIA will go up (but then you should buy now and keep it until it goes up)

Mr. Hsu's sell above strategy would work only if:

  1. ASIA will jump over $12.50 for a while and
  2. then decline

I do not see this as a very lickely event...

In any case, selling at the sell above price would bring a loss of 7%.


Justin said...

Well, its nearing end of march 09 now and I just checked the price for ASIA. Its at 16.83.

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