Don't invest in this fund, absolutely not!

The news said a Chinese fund manager pays $2.1M for a lunch with Warren Buffet. It is a great news for the organizer. Maybe not for the fund investors.

Here is the performance fo this fund, Pure Heart Fund, from their website.

Besides this website, you can inquire about the Net Asset Values (NAV) of the Fund in following websites: Guotai Junan, www.gtja.com.hk (see Investment Fund Net Asset Value Report in the middle of the Home Page) Bloomberg Ticker: PUREHCG KY
Cumulative Performance %
YTD
1 year
3years
Since launch
Issue date: Jan 16.2003
NAV/unit: 100.85
YTD: -8.02%
1 month: 2.01%
3 month: -3.28%
1 year: -9.40%
3 years: 165.85%
Since launch: 488.10%

It is very impressive to have 488.1% in 5 years. In the past year, the fund started down turn 1 year ago. It isn't very necessary to seek advice from Mr. Buffet so soon with this price. Also, this fund is obviously attached a security firm, Guotai Junan, which has Chinese military background.

Why does the fund manager want to have lunch with Buffet? Here is their investment ideology, also from their website

"We do not follow stock index and price-volume analysis. We rarely use individual stock charts as the basis for investment decisions. We only partly agree to fundamental analysis. By taking a long-term view, we believe that the share price of a (well managed) enterprise will undoubtedly reflect its intrinsic value over time. Our selection criteria are quite simple. We seek enterprises that can survive. These enterprises have been established usually for a decade or more and have relatively high success track records. We strongly believe that if we own part or most shares of these enterprises, our investment will grow and breed success together with the companies.
We see ourselves as private enterprise investors rather than security analysts. We dedicate ourselves from the onset to the fundamental investment. Our first step is to screen for enterprises with long-term competitive advantages and a high probability of becoming industry leaders within 20 years. We then conduct due diligence on a company’s financial reports and announcements in a critical manner. Our analyst team conducts ground research by visiting their clients, raw material suppliers, electrical power suppliers and so on. We also investigate the actual sales statuses of these enterprises."

Compared their performance and ideology, there is no indication of "long-term" investing. It is quite volatile. Besides, $2.1M is from whose pocket eventually?

So don't invest in this fund!!