Best World
daily chart on 7 Mar 19 at market close
This is a follow-up to my
short position in Best World, following my earlier post “Expected Volatility on
Best World Trading” that I shared on 24 Feb 2019:
I closed all my short position in Best World and gave myself a belated big angbao of close to $20k after CNY.
Until now I still maintain
that:
- It is difficult for Best World to make more money in 2019 in China as Premier Li Keqiang just mentioned that China’s 2019 GDP will be further weakened to between 6 and 6.5%.
- The uncertainty of Best World franchise model in sustaining its revenue cannot be removed easily as franchisees may not be able to clear their inventory fast to take in new inventory and pay cash upfront on delivery to Best World.
- If Best World franchisees flout the China’s direct-selling regulations, the image of Best World will be tainted even though Best World has claimed that they will not bear any responsibility of the wrongdoings or misfortunes of their franchisees.
- The volume of transaction has shrunk drastically which means the panic has largely subsided.
- The price has stabilised which means I cannot expect any big fluctuations in my favour.
- I am keeping more cash for another opportunity that will come my way soon.
Superphang
