Greater China Fund Inc. (GCH) “Sell earn and cry!”. Why did I sell GCH knowing I will cry? May 8, 2006Posted by deminvest in GCH, growth stock, investment, Single stocks, stock I own, stocks.
On Friday I sold 540 of my 700 GCH closed fund stock at a price of 23 $. I did so even though I like GCH very much, because it invests in dynamic Chinese companies. I am already crying about my deed: GCH is 23.94 now. But why did I do so?
I did it because I liked to follow two investment strategies, one of my own and one well known:
1) The "Free Stock Strategy" is mine: when a stock I own goes up 30% from the price at which I bought it, I sell enough stock to get my original money back, so that 30% earning is transformed in "Free stock" meaning stock that I got for free because I was lucky enough to buy them and see them go up 30%.
2) The "Sell earn and cry!" strategy is well known by investors: It is based on the fact that it is almost impossible to buy a stock which is going down at its lower possible price before it bounces back up and it is nearly impossible to sell a stock which is going up at it highest possible price before it goes back down.
So, following strategy 1) , I have 160 GCH "free stocks", worth about $ 3800. Following strategy 2) I have secured my capital, bringing it back home, and even if tomorrow a revolution happens in China, my money is safe again.
So the history of my GCH investment is: on 03/30/2006 I bought 700 Greater china fund GCH at a price of $ 17.72 spending a total of $ 12.404 . On 05/05/2006 I sold 540 GCH at $23 making $12420.
I was lucky this time, and I can say so now, whatever happens to GCH stock!
Even thogh I sold most of it, GCH closed fund is still an excellent investment. It invests in various economical sectors andpicks good Chinese companies from all economical sectors, without being forced like main ETF to buy bad run government controlled Chinese dinosaurs.
GCH invests in the most interesting and healthy ectors of Chinese Economy like Real Estate ( 23%), Energy (12%), Electrical & Electronics (11%), Consumption (10%) and Technology (8%)
Its NAV (net value of assets owned buy the investment fung) grew 50% in a year. If I did not have GCH for free, i'd buy it now!
Maybe Warren Buffed read my Blog too, so he is deciding to invest on companies outside the US too. Let the force be with us… and with Warren 🙂