I'm Selling China Mobile (CHL)

I decided today to sell my stake in China Mobile.  I've done very well with the stock, having bought it near its five year low in 2003.  But I've decided not to be greedy and get out while the getting out is good.  Here's why.

  • China Mobile has the third highest market cap in the world behind only Exxon Mobil and GE.  It's trailing and forward PEs are significantly higher than either company's.
  • The mobile growth opportunity is slowing in China.  There are over 500M cellphones in the country and work is now being done to sign up villages and more remote areas.  This is harder work and requires more infrastucture investment.  Everyone in the cities who was going to have a cellphone has one meaning the easy pickings are over.
  • China is hot now.  The Hang Seng almost doubled in the last year.  Now seems like a good time to take some money off the table.
  • Saying that China has a billion people and thus there are 500M more cellphones to be sold is like the predictions of Internet growth during the Internet bubble.  When someone speaks of unlimited opportunity its  time to take stock.
  • The Olymics are coming.  I have a feeling China is going to delate a bit after the Olympics.  Money is being pumped in and the government will do everything in its power to keep the economy from sinking before the event happens.  After it, who knows.

I might be totally wrong about this but that's okay.  I've already made 5X my money.  You know the saying, cows get milked, bears get shot, and pigs get slaughtered - or something like that.

 

 

Sol Nasisi
Sol Nasisi: Sol Nasisi is the co-founder and a past president of BestCashCow, an online resource for comprehensive bank rate information. In this capacity, he closely followed rate trends for all savings-related and loan products and the impact of rate fluctuations on the economy. He specifically focused on how rates impact consumers' ability to borrow and save. He also has authored a wee

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Comments

  • non believers

    October 06, 2007

    glad you made $ ...I.m staying in~~~~~~~~~

  • Thomas Bivens

    October 12, 2007

    Yeah, I'll probably kick myself but I'm getting too nervous about China.

  • JJ

    October 17, 2007

    I have also hade 5 X on my initial in 2003. And then made 4 more purchases over the years. I'm going to stay with it for at least 10 more years. Sometimes all you need is 1.

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