Yesterday I posted that I would sell Ctrip International.com out of my Jubak Picks portfolio at the first sign that the stock’s upward momentum had broken. Well, the New York traded ADS for Ctrip closed down 5.42% today. I think that counts as a break and I’m selling this position. Ctrip was up 68.5% as of the close on March 6 from the November low. At the March 7 closing price of $40.00 I had a 27.25% loss on Ctrip International in my Jubak Picks Portfolio since I opened that position on October 10, 2017.
The sell today is mostly a call that China’s financial markets have gotten way, way too frothy. And that I don’t think the short term reward in Chinese stocks in general and Ctrip International in particular is sufficient given the short-term risks. On the very promising fundamentals of Ctrip’s business I’d consider getting back into the ADS if a correction took some of the froth out of the Chinese market.
I laid out the evidence of froth and my worries about the Chinese markets in yesterday’s post on Ctrip International.