Friday, November 14, 2008

Sell half of your CTRP

At the end of March 2006 Mr. Robert hsu decided to buy CTRP at $22.30 (split adjusted). He was writing:

The April newsletter also features our newest recommendation: Ctrip.com (NASDAQ: CTRP). This company could not be more different from the bloated SOEs we've talked about today. This young Internet company is changing the way Chinese people travel, and in my mind, exemplifies what's at the heart of the China Miracle. I think the stock is an attractive buy all the way up to $90 ($45 split adjusted).

CTRP went over $70 (split adjusted) but Mr. Hsu never sold it. He waited the long decline to $25 before telling his subscribers to sell half of them for around 10% gain.
Ctrip.com International (NASDAQ: CTRP) is set to report third-quarter earnings on Monday. As we've discussed in past issues, the company may not post strong earnings this quarter as a result of limited travel in China during the Beijing Olympics. So as a precautionary measure to protect our current profits and limit our losses – if CTRP does indeed report weak earnings -- I recommend that you sell at least half of your positions in CTRP.


After another example of turning a 200% missed profit into a 10% realized one, we notice for the second time the new, humble approach of Mr. Hsu to his readers.
In fact he writes I recommend that you... instead of his usual pretentious I want you to...
But those who bought CTRP at $56 as Mr. Hsu recommended in May 2008 are now sitting on a 55% loss.

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