Sometimes, technical glitches can be good. When we announced last week that we had purchased 200 shares of Jiangsu Expressway (600377.SH) at RMB6.63 (US$0.97) a share, we were a touch premature. For whatever reason, the transaction didn’t go through, despite our computer confirming that it had.
Once we discovered the error, we decided to continue what we had started. Fortunately for us, the 200 shares in Jiangsu Expressway we bought on Wednesday were just RMB6.45 (US$0.94) each, a nice little discount from the price we thought we had paid.
Jiangsu Expressway rallied immediately following our non-purchase last week, but faltered as the week progressed. It closed today at RMB6.51 (US$0.95), down from last Friday but up slightly from Wednesday. We see nothing that changes our fundamental outlook for the stock – discounting, of course, the larger issue for the market that is excessive optimism in the face of continued risks to the economy. Some market watchers are starting to worry about overvaluation, and this Bloomberg piece suggests we could be headed for a "sizable correction."
It’s certainly an interesting time to be back in the market (for real). Whether "interesting" will turn out to mean "profitable" – or something rather less palatable – remains to be seen.
The Capitalist Roader Fund is down 32.8% since June 3, 2008, while the Shanghai Composite Index is down just 9.3% (!).