Well, here’s a problem we haven’t had before. All of our current holdings are trading at a premium from where we bought them: China Vanke (000002) is up 2.59%, China COSCO Holdings (601919) is up 10.79% and – we can’t quite believe this – Jiangsu Expressway (600377) is up 10.85%.
Consider the returns on our previous investments. Our old flame Anhui Conch (600585) let us down to the tune of 41.22%, Industrial and Commercial Bank of China (601398), trimmed 24.71% off its value by the time we bailed, and our utterly misguided investment in riboflavin producer Hubei Guangji Pharmaceutical (000952) lost 43.65%. It’s fair to say that we’ve been doing so badly for so long that we don’t quite know how to deal with good news.
The question, of course, is when to sell. We’re more certain about what to sell: We hadn’t been terrifically enamored of Jiangsu Expressway’s performance up to this week (when it jumped more than 12%), and we think its long-term prospects are limited in comparison with both Vanke and COSCO. Its relatively small market cap may make it more susceptible to the kinds of speculative rallies that occasionally shoot through the Shanghai market, but that could also work on the downside.
The prudent investor in us is saying "get out while you can." But prudence hasn’t been a recipe for success in the past. Decisions, decisions.
The Capitalist Roader Fund is down 24.31% from June 3, 2008. The Shanghai Composite Index is down 3.7%.
UPDATE: Some of the figures given above are incorrect, due to problems with our portfolio tracker: Vanke is actually up 2.51%, COSCO is up 7.24% and Jiangsu Expressway is up 11.47%. The fund is down 24.67% from June 3, 2008.