Time to buy Chinese small cap?

We've been burnt by them sometimes losing 90% of them stock prices due to frauds. Is it time to return as some have recovered nicely (not the companies with frauds)? After owning several Chinese small caps and FXI, my next move when Chinese stocks fall further could be buying a mutual fund on China and let the experts handle it.

Here is from a fellow bogger on DEER:

The China small cap on space technology has been in the dog house for over a year now because of a few fraudulent companies in the space. With the passage of time, as more quarterly reports are carefully prepared and submitted, Mr Market will regain confidence and the companies will become fairly priced.

Companies within this space should be conservative with projections because if they over promise and fall short on delivering the lack of confidence will continue.

Deer management has not only met but have exceeded expectations. Despite this they have been hammered with the rest of the space. Management has been extremely aggressive taking it to the shorts but have not prevailed. They recently implemented a decent dividend to demonstrate viability but thus far this has not worked. Management owns a huge chunk of the company, a very positive item when management has skin in the game. With this in mind, though not expected, I would not be surprised if they raised the dividend to cause a little discomfort to the shorts.

I'll cotinue to collect my dividend and use a bit of it to purchase some wine while I wait for the share price to rise.

This stock will be a winner because of management and a great business model. Of course a few billion Chinese improving their lives by becoming consumers will facilitate rapid growth for our products.

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(c) TonyP4 2012. Written in 2/17/12. Last updated in 2/17/12.

Disclaimer:

Do not gamble your money you cannot afford to lose. Past performance is a guideline and does not guarantee future performance.

All my posts are for informational purposes only. I'm not a professional investment counselor. Seek one before you make any investment decision.