Investing Status Report – December 2017

For anyone paying attention, I mentioned my first significant trade here, buying FTFT (Future FinTech, formerly Skypeople Fruit Juice – SPU). As per usual, after I bought the stock, it went down. I got in at $2.15, and it dropped to $1.37. Ouch!

But, I decided to ignore it, and it jumped to $8.00 before settling back down around $5. I sold half my position at $5. That gives me all of my money back with a small profit, and I get to keep the stock! Instead of Return on Equity, it is Return of Equity. What’s better than getting a valued stock is essentially getting one for free. I also have a standing sell order to sell half of what remains if the stock gets to $8.

At this point, since I have all of my money back, it is fairly irrelevant to me what FTFT does as long as they stay in business.

I will say, thought, that I am a little more skeptical of them than I used to be. They jumped on the blockchain bandwagon. That’s actually one of the reasons for the jump in price and why I let so much of the stock go at that price. I don’t think that blockchain is a good technology. It’s very interesting and innovative to be sure, but I don’t think it really is as good as people say. Now, they said they were building blockchain environments. If they do and they make money at it, great. But, if instead they are just jumping in with the latest buzzword, that indicates that the company is just pumping their stock price with fancy buzzwords.

So, it shook my faith in them, but I did get back all of my money plus I still have half of my position. Not a bad play. I unfortunately didn’t have a lot of money to play it with, but I put a significant stake in their.

My safe play right now is MNDO. Basically a stable dividend-producing company with a solid backoffice solution they are selling. Because they are producing a dividend, that is not only helpful monetarily, but it is a direct indication that they know the goal of a business and how to acheive it, and probably aren’t playing games with their stock price.

Additionally, the dividend is pretty steep – about 10%. So you get the return of a junk bond but the benefit of equity ownership in a stable company. Not bad.

For a risky venture, I’m looking at GURE, but can’t quite yet determine if they are for real or not. Haven’t decided for sure whether to commit. They say they have a P/E of 2.77, a P/B of 0.23, and a 37% gross margin. They don’t pay out a dividend, so that is a drawback. Also, the company has hit some hard times because of regulatory issues, so they are going to report a Q4 loss. Anyway, I’m waiting for the Q4 loss to come out and see what it does. If it drops hard, I’ll probably pick it up, because they seem to be a stand-up company letting everyone know about the issues ahead-of-time and when the picture isn’t so rosy, plus they have a nice cash position to help them weather through these times. I think the price will drop hard soon and then there will be a great buying opportunity. It’s not a bad opportunity now, but right now it is tough to say that it would be better than keeping it with a dividend-returning stock like MNDO.

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