After reading recommendations on these 'Can't Miss' stocks, I went all in on them. Turns out all 3 of them were and are basically frauds. HEAT is currently suspended from trading, but it doesn't really matter since it was already down to 50 cents when it was suspended. FUQI hasn't filed any financials in more than a year and is trading at 70 cents, down from $20, and PUDA may be the worst of them all. The CEO sold the company ourtight and pocket the cash. End of story. PUDA is an empty shell. HEAT makes or made heaters, FUQI makes or made jewelry, and PUDA used to mine coal. The one common denominator? All three companies haiol from China. Need I say more? I don't even like Chow Mein anymore.
I'll add Duoyuan Global Water and Rino International to your list of Chinese IPO frauds.I bought RINO on 10/22/2010 for $18.20. Not more than 5 weeks later, this comes out:... reporting $193 million of revenue for fiscal 2009 to the SEC while reporting only $11 million of revenue for 2009 in the Company's annual report filed with the Chinese authorities. According to the complaint, after a market research and trading firm named Muddy Waters reported this discrepancy and that: Company management diverted $3.2 million to purchase a luxury home in Orange County, CA; many of the Company's customer relationships do not exist; Company management is draining cash for its own business and personal use; and the Company's actual profits are really one-half to one-third of what was reported to investors, the value of RINO stock declined significantly.Sold out for $2.86 12/10/10 after trading on the OTC market resumed.
Maybe this says it best about these Chinese companies. I personaly visited China this past July. I found the local people afraid to talk, I found both regular Army soldiers and uniformed police everywhere. Our tour group was given explicit orders not to photograph any soldiers, police officers, or government buildings. These buildings included libraries, administrative offices, and standard issue government installations like police stations and Army bases. And there's no telling how many police officers there were dressed in plain clothes that we never saw. That speaks volumes about what the people have to put up with daily. As far as shopping, here's a great example of what you might find in China. They had a 7 or 8 story building full of individual shops and vendors, much like a flea market, but in a skyscraper instead of a fairground. It's called the Silk Market, and it's a big tourist attraction. The only thing I found in that entire building that wasn't a knockoff or outright counterfeight was the esclator that took you from floor to floor. That was real enough. Nothing else that I saw. The U.S. Embassay in Beijhing came out with news while I was there that the air quality in Beijhing was highly polluted and essentially toxic. The entire city is covered in a yellow haze. The Chinese government quickly responded by (1) stating that the U.S. Government has no business taking Chinese air quality readings, (2) Outright stated that U.S. Government was wrong about their readings, and (3) Indicated that the yellow haze wasn't pollution or toxic at all. It was in fact, 'mist'. We had to color correct every outdoor photo we took in China due to the 'Mist'. Given all this, if I had known then what I know now, I would never ever have bought any Chinese stocks. And now that I have this knowledge, I never will again.
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