To OTC Journal Members: 
 

China Electronics Holdings (OTC BB: CEHD): Profit Alert

Any baseball player who went 3 for 3 would be rewarded with about $30 million a year. I think Jeter just got about $20 million for the next three years, and he's only average about 2.8 for every 10. Coming off big short term wins in FPP and SOPV (I hope you all locked in 20% in 2 days on SOPV), I have another profit alert to bring to your attention today. 

It's been a while- Sept 29th to be exact. While that's only 6 weeks in people time, it's more like 30 weeks in dog years- any way you cut it, it's a pretty short time to be in a stock. On September 30th I wrote a feature article entitled China's Version of Sears- In 1960.

The story featured China Electronic Holdings (OTC BB: CEHD)- on track to deliver about $17 million net this year on just north of $100 million in revenues. On that date, the stock was $3.25, and I was the first one out with any real coverage alerting individual investors.

CEHD closed about $6 for the first time on Monday, and is still hovering around the $6 level. That's a net profit of 84.6% since that day at the end of September. 

The volume has been building and the stock appears to have reached a nice peak level. I would suggest this might not be a bad time to lock in your profits, as this stock is now entitled to go into a corrective phase.

I believe this company will prove out to be worth at least $10 per share down the road, but it's tough to walk away from over 80% in 2.5 months.

And- on the subject of China stocks. I have been writing tons of coverage on these situations of late. All my content on China can be found at www.EmergingChinaStocks.com. There's been a lot of volatility of late with the commodities stocks going crazy and recent interest rate increases in China. Earlier this week 5 or 6 of the companies I cover hit new multi year highs. The second half of this week has been corrective as another interest rate increase in China is expected any day now.

I've been getting a few emails from investors on some of the China situations I have featured. If you want updates, you have to subscribe to www.EmergingChinaStocks.com. I gave you the heads up on CEHD as a courtesy- and, I don't want you to miss the profit. However, I won't be covering the China situations in the OTC Journal any longer.

I'm trying to come up with a trade for you every week. I have an idea for this week, and next week I'm looking at a good old fashioned penny stock - you'll love it. For now, here's the idea of the week:
 

Locking in a Cool $12 Billion Profit

Whether you liked or hated the 2008 bailout which started with Hank Paulson and the Bush Administration and carried over to the Obama Administration, you have to admit some of the "investments" we (meaning the US taxpayers) made when we were the "investor of last resort" sure paid off.

Case in point- CitiGroup (NYSE: C). I don't feel like the government is that well off, but we locked in a nice profit of a cool $12 Billion yesterday. Our investment of $45 billion in Citi (NYSE: C) had a cost basis of $3.25 on 2.4 billion shares.

Yesterday, those shares were "placed" with institutional investors at $4.35 per share, netting the tax payers a $12 billion profit. Do we have to pay taxes on the gain? If so, thank goodness it's a long term capital gain.

Seems like we made a lot of money on that one, and numerous other banks we bailed out. It sure doesn't feel like the government is that rich.

With the 2.4 billion share overhang gone, I suspect C can now trade up nicely, and I'm in with my own money at $4.60. I'm looking for a short term trade to $5, and perhaps $6 over the next 60 days. 

My stop loss on this trade is going to be very tight- if it trades down to $4.50, I'm out. The stock only traded 3 billion shares yesterday, and hasn't even hit a billion today. Everyone who wanted to sell their $4.35 stock has been able to do so, and I expect better things from here on out.

This is my trade idea for the week, but next week I expect to have a good old fashioned penny stock idea for you. If C hits $5, I'll be 4 for 4. Then, next week, we'll see if we can go 5 for 5.

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