I elected to show the two year chart because it is the closest to the length of time that BloggingStocks.com has been around. During that time I have written numerous stories about the company and it is one of our top five holdings. There does seem to have been a lot of volatility recently as the the short term chart indicates, where the stock moved 5% to 10% in 48 hour periods, but making anything of it is just wild speculation.
Last August I posted Volatile Markets: Huaneng Power (HNP) is my pick for the next 50 years discussing the strength of utility stocks and even showing how this value play had beaten Google, the "growth" stock. I also have made a big deal about utility stocks and dividend paying stocks in one of my early stories Dow Jones Utilities BEAT Industrials with ease!.
It is human nature to want to know why something occurs. This is exaggerated when you have invested heavily in something, be it your stocks or your kids.
The bottom line is that stocks jump around for a multitude of reasons. Sometimes an earnings report or industry news. Sometime because major investors are making a play and volume is up. It could be the government allowed for price increases or decreases or changes in subsidies. It could also be that something corrupt is happening behind the scenes -- heaven forbid -- and that you cannot find out about until it is too late usually.
The last issue is of course the most disconcerting and there was news reported by the China Daily on Monday that makes one wonder, Huaneng Power says chairman resigns. However, if I let my imagination run wild with each news story or press release I could not invest in stocks at all.
We originally got into HNP at $26.35 in May of 2006. We followed up into the $50's and back down where we have been acquiring more, most recently at $28.00 per share. It is trading around $35 mid-day today which is a nice return in a short period of time and I must add that the current 5% dividend yield (20% higher for me) does allow one to be a very patient investor.
Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I own shares of HNP.
