Yesterday's post was as error-ridden as anything I have ever published.
On the most important matter: I thought the Globe and Mail story on Sino Forest would drive the stock down at least 50 percent.
The last time I saw a major paper of record come right out and agree with a shortseller that a major company was a fraud was... well... never.
I thought that would be significant. I thought it would be game-over.
The stock was down less that 15%.
I have a word for my preconception: wrong.
On the size of the theft in global history - well obviously I was not broad enough. I have to exclude all thefts in the nature of war or invasion (dispossession of the American Indians, Australian Aborigines etc). I have to exclude thefts in the nature of revolution (eg the end of Communism in Russia). I have to exclude thefts by Government (Yukos). I have to exclude thefts from Government in quasi war (eg theft of the reconstruction funds in Iraq). I could go on.
However $2 billion neat stolen (still not proven but in my view looking likely) is a larger net theft than Madoff and about as large as they get in financial markets. But then I am likely to be shown to be wrong on that too.
This does not surprise me. I was convinced by the Muddy Waters report after reading it and cross-checking just with the annual accounts. (The business model described was bizarre and major fraud was the simplest explanation consistent with the facts.)
However my view of this was hardly important. When the Globe and Mail prints it is important. I got several emails that pointed to the article and said "game over". And they are right. Despite collapsing revenue and declining importance the "Mainstream Media" still matters. They are to some extent trustworthy - have a reputation for telling the truth about major matters - and they are selling that trust.
Blogs may be right more often than not. (So far - touch wood - this blog has made very few mistakes...) Blogs may be more adventurous (and there are plenty more adventurous than this blog and I express stronger opinions than much of the mainstream media).
But the mainstream media matters. They do have more authority and the reaction to the Sino Forest article in the Globe and Mail is about to prove it.
So here is a puzzle for the media analysts: how do you continue to monetize trust and truthful media? How does alternative media get that trust and monetize it? Or is there no way of monetizing media trust and hence is all media likely to become (more) untrustworthy?
I really do not know the answer. But if there is no way of monetizing the truth in the media then the world is becoming an altogether more dangerous place because there are plenty of ways of monetizing lies...
John
PS. The Globe and Mail was only last week squibbing on Sino Forest. They published a bizarre editorial which suggested that Muddy Waters inflammatory rhetoric reduced their credibility. I thought that Muddy Waters rhetoric (if they were right) was if anything understated. I wrote this letter to the editor which they did not publish:
Dear Sirs
In your editorial dated 14 June you suggest that Muddy Waters Research's relentless comparisons of Sino Forest to Bernie Madoff reduces their credibility.
Au contraire.
Muddy Waters allegations are far from proven but if true they suggest that in excess of a billion dollars has been raised from Canadian markets to buy forest and forests were not purchased. In other words the money has been stolen.
Further insiders and related parties have probably sold a further billion dollars in Sino Forest shares.
This alleged theft is probably in excess of $2 billion.
Bernie Madoff took money from Peter to pay Paul. The amount of money stolen for Bernie Madoff's personal use was probably less than $300 million. Sino Forest is six times bigger and if the Muddy Waters allegations are correct is probably the largest straight theft in human history.
The Globe and Mail's suggestion that comparisons to Bernie Madoff are credibility reducing is just an extension of the jelly-backed tradition of apologizing for Canada's inept and faithless investment banking and stock promotion community.
John Hempton
Sydney, Australia
And that is right. Sino Forest raised the better part of $2 billion in bonds and related parties probably sold huge amounts of stock. All that money was - if the Globe and Mail and Muddy Waters are right - stolen. That is (if the allegations are correct) the biggest theft in human history.
Comparisons with Madoff are unfair as Madoff only lifted a few hundred million for personal use. This is maybe six times bigger.
--------------------------
Later addendum: I figure that if the allegations are true then this theft was over $2 billion. That is money that went from the victims to the perpetrators net. Madoff had bigger money but Madoff got much much less than that net.
Some people have objected to me characterizing this as the largest theft in human history. I understand but can they please suggest one that is larger? I have yet to find one but the best candidates are things like the Albanian Ponzi and the Spanish Stamp Ponzi. Both were organized crime and in both cases the victims were a substantial portion of the population.
The recognized loss number from the Albanian Ponzi is about $1.2 billion... Some numbers for the Spanish Stamp Ponzi are in the 5 billion euro range - but I think the net losses are less than half that and the net-gain by the perpetrators is thus smaller than Sino Forest.
The dispossession of the American Indians or the Australian Aborigines are bigger thefts... I should limit myself to modern financial market thefts. Thefts in war (including things like Iraqi reconstruction funds) are likely bigger.
Ok - the title is somewhat misleading: I just purchased an HTC Desire HD Android phone via Ebay and by doing so I learned a few lessons - some of them investment related - others just about the way the world works.
This phone is (on specification and in third party reviews) an iPhone 4 equivalent - more powerful and does a few things that Apple restricts its users from but alas not quite as user friendly. But the phone I purchased was truly awful.
The Ebay advert said it was "unlocked" but did not reveal the shortcomings. This phone was from the Middle East (possibly Saudi Arabia) and it came with a restrictive set of applications and no Android Market. A smart-phone without an app-store is useless. I was limited to the thirty apps the phone came with. Ugly. I was missing some apps I consider very important (eg VOIP apps).
The solution was to "root" the phone (ie hack the system) and install a decent operating system (HTC Android 2.3). For someone only mildly geeky this was a little harder than it looked. There was a fine YouTube video series here but it did not cover the nuances of using the Android Developer Kit and nothing seemed to work in my virtual-box Windows so I had to hijack my son's computer.
Two and a bit hours later I have a fine phone - one I would prefer to an iPhone 4 (although probably not to an iPhone 5). It was however much harder than it should be and this process would not appeal to a mass audience.
A few lessons:
(a). Whilst phone companies and governments will fiddle around with phones and their operating systems the attraction of walking down to the Apple Shop and buying an iPhone remains. iPhones all work the same way and its hard to imagine an iPhone without the App Store. The Apple slogan is "it just works". My phone worked in a narrow sense - but Apple's worked better out of the box even though my phone beats the iPhone 4 in many surveys.
(b). The whole experience cheapens the Ebay brand. I thought the Radioshack and other shops selling mobile phones and contracts were not long for this world because phones would come without contracts and be purchased online. I figure that will be right in the end but risk aversion sends me to something explicitly local to my jurisdiction for a little longer.
(c). The modifications made by countries and phone companies to Android phones cheapen the product. Non geeky people - say 99 percent of the population - could not be expected to hack their phone. So they are left with the crappy phone they are sold in the first place. If it is full of bloatware so be it. Android is as sleek as IOS. The things done to Android are not...
(d). Big corporations (especially it seems tech firms) are prepared to play ball with oppressive governments. My phone was hobbled to please the Saudi Government. Google may have said no to participating in Chinese oppression but their partners (such as HTC) happily participate in oppression when they sell Android phones. And as they do it they continue to cheapen the Google/Android brand.
(e). For a small proportion of the population - those that can hack a phone install themselves as super-user and get around government communication restrictions modern technology beats oppressive governments - but we are kidding ourselves if we believe this will be a widespread skill.
For thought and comments...
John
PS. For those that want to know I installed T.B. Fusion 1.1.9 - an Android 2.3.3 system. The complaint on the web about this install is battery life - though I have not (yet) decided that is problematic.
TRE [Sino Forest] had some notable blocks / drops of other awkward questions. TRE cut off the Nomura analyst Anissa Lee rather than answering her question asking for more details on where the cash balances are kept.
Management also failed to attempt to answer a question about whether its banks are uncomfortable with extending credit. Instead of answering, there was a death ray type of sound toward the end of the question, and the questioner was no longer there. In true memory hole fashion, management moved onto the next questioner without making any statement in response to the question.
A bit over twenty years ago I spent a pleasant afternoon in the lock-up at Eden Police Station on the South Coast of New South Wales.
I was arrested at a protest into logging of native forests, cuffed, put into the paddy-wagon and left in a cell for about six hours, fingerprinted and released. The charges (obstruction) were later dropped. I was not obstructing anything...
What made this pleasant was the company. I was arrested as bystander at an “artists for forests” protest and in the lock-up with me were some of Australia's most famous artists.
The lock-up itself was a brick courtyard open to the sky except for bars that blocked an unlikely escape up the walls. Attached were two austere cells only one of which had a door. There was a toilet (no privacy) and a vinyl mattress and a total absence of hanging points. The other cell was firmly locked but if you peered through the feeding-slot there were a couple of tonnes of marijuana being kept as evidence after a huge local drug bust.
Supporters threw two dozen boxes of coloured chalk through the bars in the roof and for the next four hours I watched artists at work. Given the heady prices of Australian modern art these days the walls of this cell were probably worth seven figures by the end of the day – until the police hosed the work off.
I tell this story only to relate that during my early twenties I was an organiser for several anti-logging protests and I developed amongst other things a reasonable perception of the scale of a million tonne per annum fibre operation.
I never thought I would use that – and then along comes Sino Forests. Oh how I am enjoying this.
You see below – as a blast-from-my-past - an aerial photo of the woodchip mill in Eden. This was and remains a controversial beast. It is also pretty darn large. The docking station is so the bulk-carriers can dock and transport Australia's native forests away. [No doubting which side of the controversy I am on...]
This chip-mill processes almost precisely a million tonnes per annum in wood-chips. Given wood and water are roughly the same density it is roughly a million cubic meters per annum.
I say that so you get a picture of scale.
According to Sino Forest they sold – get this – 17 million cubic meters of wood last year and they expect that number to grow in the foreseeable future. Some of this they processed themselves – other wood they sold as standing timber. Obviously however when you sell it as standing timber someone else has to process it.
So lurking around Sino Forest's land are 17 mills this size (or one mill 17 times this size of some variant thereon). And that is presuming there are no other producers in the area other than Sino Forests. Sino has promised to take analysts and investors to see their operations. I make a suggestion: get them to take you to all the chip-mills that process their timber and stand there with a clicker counting the trucks in. [E&Y - the auditors - should do this pronto. The longer they delay the more their potential liability.]
I have my doubts. I had a number in my head for the size of the global pulp (for paper) industry: something just under 200 million tonnes per annum. 17 million tonnes per annum of fibre seemed large.
Wikipedia cites the global pulp market in 2006 as 160 million cubic meters. Paper is not much of a growth industry these days as anyone looking at newspaper circulation can attest – so I figure that is not far from the current number. There are other uses of fibre (cement form-work being the big one in China) but one bullish article is hoping for growth in total usage to 223 million tonnes per annum by 2015. Whatever – Sino Forest was claiming to be a high-single-digit percentage of global supply – and they were (implausibly) claiming it from 787,700 managed hectares.
When I read the Muddy Waters report something else jarred. Muddy Waters you see was using a different measure of the scale of the industry in China. They were quoting numbers like 420 million cubic meters of wood per annum in 2010 of which 240 million cubic meters was for industrial use (namely paper, cement formwork and packaging etc). China is a big place – but these numbers seemed a bit big to me especially as the majority of feedstock for industrial uses of wood-fibre is recycled material.
So I went looking for the source of the numbers. Here are some graphs from Sino Forest's annual report and they reveal the source of all the Chinese numbers:
The source is listed at the bottom of each graph as BOABC.
BOABC turns out to be an agricultural consultancy in China. They have a website. It offers reports on various industries but put your email in the box and try and get the grains report. It bounced me.
Xinhua may be dead. Its subsidiary (probably not the most reputable source) is alive though and pumping out numbers which do not match generally accepted industry numbers and which are used to bolster Sino Forestry's stock. And Bay Street analysts are blindly using them. Even Carson Block – who is more than passingly cynical about numbers, accounts and Chinese companies used these numbers without question in his report.
The analysts I suspect went to good schools, Harvard, Yale and the like. I wasted my youth organising environmental protests in remote locations and learned that it was stupid to take at face value official statistics about rape-and-pillage forestry operations. The stats were as often as not lies. Learning about how people lie with numbers was – at least for a stock analyst – a darn good education.
To the Wall Street analysts who take these numbers at face value I got a song for you:
Northern Oil and Gas (NOG:AMEX) has divested small interests in ninety wells to Ashwood Resources. Ashwood is a company controlled by a realtor and founded by a hairdresser and its entire business is - as far as I can tell - to acquire and manage interests in wells sold by Northern Oil and Gas.
Brittany Reger - the wife Michael Reger - was an employee and the contact officer for Ashwood.
Michael Reger is the CEO of Northern Oil.
So Northern Oil sold leases to a company where the contact officer was the CEO's wife.
However in Northern Oil's defense the interests sold to Ashwood were tiny (typically 0.5 percent interest in any individual well bore).
Moreover Northern Oil has announced via SEC filing that "our management has concluded, and has confirmed with our outside legal counsel, that our agreement with this private company is not material to us and does not involve any related-party transaction".
Testing Northern Oil's claim that these are not related party transactions
I am a great fan of Ronald Reagan. His slogan when dealing with the Bolshys was "trust but verify". Channeling my inner Ronald Reagan I went about verifying.
I found the domain name ashwoodresources.com. The website is dead - but it was (a) first registered about the time Ashwood Resources (the company) was formed and (b) was originally registered to Tyler Cross of Billings Montana.
Billings is the home town of the Regers and 840 miles from the hairdresser or estate agent.
The domain name was later re-registered to "domains by proxy" a standard way of hiding domain ownership. The change in domain name registration happened about the time The StreetSweeper started looking at Ashwood Resources.
I tried contacting Tyler Cross to find out who really owned the site ashwoodresources.com. No luck. Several readers tried the same thing with the same "no comment" answer.
But my readers are resourceful. For instance one reader found that Tyler Cross's parents and Michael Reger's parents made donations to the same church in the name of the same person. The Reger and Cross families go to the same church and donate at the same funerals.
But that still does not prove that Ashwood Resources (the company) is associated with the Regers.
These are web domains for Voyager Oil - a company controlled by Michael Reger's brother JR Reger.
Also all of these domain names for Voyager Oil have been re-registered. They are now registered to Domains by Proxy.
Again this does not prove that Ashwood Resources is related to the Regers but that hypothesis is looking pretty good. Brittany Reger was Ashwood's contact officer. Ashwood's web services (domain registration at least) was provided by the same person as Voyager Oil's web service (Tyler Cross). Cross's family probably knows the Reger family through their church and through attendance at the same funerals.
Tyler Cross can provide the definitive answer as to whether Ashwood and the Regers are related parties. Alas his answer is a firm "no comment". He has done nothing obviously wrong. All he did was register domain ownership and then shift those registrations to Domains by Proxy.
Tyler Cross has the definitive answer.
I have again asked for Tyler's help. But really it is not my business any more. The SEC has the power to subpoena him and find the truth.
Longtime followers of this blog will remember that I was instrumental in the exposure the biggest funds management theft in Australian history - Trio/Astarra.
Most of the victims of Astarra were clients of financial planners where the planner was a member of the Association of Independently Owned Financial Planners (the AIOFP). Astarra and its principals were regular attendees at AIOFP conferences and AIOFP members received kick-backs from Astarra - some disclosed, some not disclosed.
Peter Johnston is the executive director of the AIOFP and a regular apologist for AIOFP members. He is quoted today in Investor Daily - an Australian industry newsletter:
Association of Independently Owned Financial Planners (AIOFP) executive director Peter Johnston said it was a comfort that Trio and Astarra Asset Management were deemed "a blatant fraud".
"The advisers are tired of being blamed for product failure, these products should not have been in the market in the first place and the ultimate responsibility lays with the successive politicians over the years who have failed to understand the industry," Johnston said.
Well Peter, I differ. Financial Planners market themselves as having expertise and are required under law to understand the products they sell. Moreover Peter clearly thinks he has this expertise. I have an email he sent to two financial planners who put their clients into Astarra. It says:
Peter/Steve, met with Shawn [the guy who ran Astarra] today. I am still of the opinion that he is innocent of any fraudulent behaviour with Astarra, I will back my 30 years of being in business and dealing with all sorts of characters with my assessment. He no doubt can be accused of sloppy paperwork but that is a far cry from the hell he has been through.
It is funny how Peter conveniently forgets that he vouched for Shawn Richard. He did so repeatedly (although not publicly since Shawn admitted guilt).
Peter Johnston agreed to a $100 thousand bet with me on the innocence/guilt of Shawn Richard and whether the money would be found where Peter thought it was. He later backed out which is a pity because I would otherwise be $100k richer. (You can read the story here.)
Peter accused me in the press of being motivated by "professional jealousy" re Astarra. I told him that was defamatory: I am a hedge fund manager - I am motivated by money.
Finally Peter thought that I would get sued over Astarra. To quote an email to me:
I suggest you read below and start amending your views or check your sources as you ‘can never believe what you read in the paper.’ I checked with the asset consultant then Shawn himself, this is now been confirmed by the Administrator, ALL of the non hedge fund monies are exactly where they were supposed to be. You will also now find that the ASF cash and 3 of the 5 Hedge Funds are now accounted for. We are awaiting the final 2 which is going to put the spot light and legal proceedings in a different direction, you can be assured of that.
Peter Johnston
Executive Director
ASSOCIATION OF INDEPENDENTLY OWNED FINANCIAL PLANNERS
Bluntly, Peter Johnston threatened to sue me. He defamed me in the press.
And now he revises history to absolve himself and his members.
But that is not my problem with Peter Johnston. Peter Johnston is a coward who does not have the courage of his convictions. He bet 100 thousand dollars on the Astarra outcome. And then - when he realized that I was serious - he backed down.
Carson Block and his team at Muddy Waters Research have just released a report on Sino Forest - a huge Canadian listed company - or is that a huge Canadian listed fraud?
There is a cottage industry in doing forensic analysis of Chinese frauds. I have analysed many and put only a smattering on the blog.
But I have never seen anything this big or this amazing.
Northern Oil and Gas (NOG:AMEX) and its sister company Voyager Oil and Gas (VOG) are a minor obsession of mine.
Not only are the management straight from central casting but Northern Oil sold interests in approximately 90 wells (a quarter of the wells they were ever involved in) to a mysterious company called Ashwood Resources.
Ashwood it appears has no other function that to buy properties from Northern Oil and to manage those properties.
So it was a surprise to me and to others when Brittany Reger - wife of Northern Oil CEO Michael Reger - was the contact officer for Ashwood Resources.
Can you say conflict of interest?
Anyway Michael Reger offered two defenses. First whilst the lease interests sold to Ashwood were numerous they were tiny - sometimes as small as half a percent interest in individual wells. The second defense was that Ashwood was not a related party and his wife's job was appropriate. He even said the company sought the advice of outside counsel on that matter.
Ashwood may have been founded by a hairdresser - but was - it seems - controlled by Jacob Schaffer - a realtor in Minneapolis. It was not - according to Michael Reger - related in any way (other than by his wife's employment) to Northern Oil or the Reger family.
Which leads me to the website www.ashwoodresources.com. The site is dead - but the registration lives on.
When I first started looking at Northern Oil here were the registration details for Ashwood:
Administrative Contact:
Cross, Tyler tcash11@gmail.com
1821 Poly Dr.
Billings, Montana 59102
United States
(406) 749-1911
Technical Contact:
Cross, Tyler tcash11@gmail.com
1821 Poly Dr.
Billings, Montana 59102
United States
(406) 749-1911
Billings Montana is 840 miles from Minneapolis and from the Realtor who owns Ashwood. But strangely enough it is the Reger's home town.
Coincidence? Maybe.
Then a few weeks ago the registration for the domain name changed.
Registrant:
Domains by Proxy, Inc.
DomainsByProxy.com
15111 N. Hayden Rd., Ste 160, PMB 353
Scottsdale, Arizona 85260
United States
Domain Name: ASHWOODRESOURCES.COM
Created on: 01-Mar-10
Expires on: 01-Mar-12
Last Updated on: 02-Mar-11
Administrative Contact:
Private, Registration
Domains by Proxy, Inc.
DomainsByProxy.com
15111 N. Hayden Rd., Ste 160, PMB 353
Scottsdale, Arizona 85260
United States
(480) 624-2599 Fax -- (480) 624-2598
Technical Contact:
Private, Registration
Domains by Proxy, Inc.
DomainsByProxy.com
15111 N. Hayden Rd., Ste 160, PMB 353
Scottsdale, Arizona 85260
United States
(480) 624-2599 Fax -- (480) 624-2598
Tyler Cross - the original contact on the registration for Ashwood Resources almost certainly knows who the underlying owner of Ashwood is. I have tried contacting him.
I got no response.
Anyone got any other ideas for getting to the bottom of this?
Mike*, our foundation client and a dear friend, sent us a really bearish broker note as if John Hempton - a shortseller by inclination - needed to get more bearish. He was adjusting his portfolio accordingly. We won't be.
Here - with a few corrections and expansions - is my reply:
Dear Mike
The bear case always sounds intellectually more convincing than the bull case. And it is in this broker note too. Intellectual sounding and convincing.
But America is still an amazingly innovative country, humans are ingenious and most of the imbalances will sort themselves out. Big cap equities are cheap relative to almost all other assets (especially relative to small cap equities, cash and bonds and to many assets such as commercial property that require leverage). Cash yields almost minus 3 percent after inflation and less post tax. Bonds are scary as hell and yield minus 1% after tax and inflation.
Big though difficult-to-run companies are at low teens multiples. Great franchises are at mid-teens multiples. Tesco (UK) which is a truly great franchise - is at a 14 PE ratio. And the Pound is historically cheap. WalMart and Target - both slightly less good franchises - are at 12 times. The difficult parts of Silicon Valley (eg HP) are well under 10 times PE ratios (and we feel no need to own that one). The less difficult parts of Silicon Valley (Google for instance) are at a high teens PE ratio once you take out the excess cash. We own that.
Own equities. Don't kid yourself. Mega-cap equities are generationally cheap compared to other assets - and certainly compared to the cash/bond/levered asset complex.
Just don't be blind about it. The places that there have been high returns (Asia, small caps, smaller resource companies) are riddled with fraud. Twenty five years of deregulation and the high levels of innovation mean we have high and rising levels of stock fraud. Fortunately there is much less fraud risk in mega-caps.
Don't own Australia or the iron-ore-coal-steel complex. It has run too far and has been too easy to make money. Too many stupid/aggressive/greedy people are doing too much expansion. Some of these people are stupid - but they have made much more money than you or me so they must be right!
I can find dozens of reasons to be bearish - but I look at it dispassionately and I am bullish on big caps, and bullish on America. The problems will sort themselves out and the American exceptionalism (decent institutions, free enough markets and a willingness to take risks) will work their magic again.
Anything that takes you out of real assets (businesses and property that generate real cash flow) and puts you into nominal assets is - with a ten year time-frame - a bad idea. (And why is your personal account any shorter dated than that?)
Just don't get greedy by buying things you do not understand: you will be ripped off. The underlying fraud level is as high as I have ever seen it.
Oh, and we are also bullish on France and Germany. Old Europe has manufacturing and production power of enormous levels. (Remember what they produced to fight wars? Their productive capacity is very high and Americans have forgotten that. They do engineering as well as anybody. And Germany no longer has a restrictive monetary policy to crush its consumer market.)
Also the French are in that lovely position of having convinced newly rich Asians that they are the arbiters of good taste. There are few higher ROE businesses. France has played Asia better than America.
We can see plenty of reasons to be bearish - but just the frauds makes our portfolio short enough. Indeed we are plenty short and likely to remain so until I can't find frauds with ease.
Beyond that, there is a lot of pessimism around. It has got to be time to be bullish. We certainly do not desire being 125 percent net long or hyper-aggressive like that - but we will take steps to become incrementally longer. We are if anything too short.
J
*Mike is not his real name.
PS. I want to stress again that my cheap mega-cap equities are relative to other things a rich guy might own - such as small cap equities, bonds, cash, commercial property or gold. There are ways cash could be a better investment - hard deflation. Long bonds are probably the best investment in that environment. I do not see that happening (though I did think it a possibility 18 months ago). Equities were generationally cheap in absolute terms March 2009. I was buying but nowhere near enough - and indeed we carried some losing shorts through the second six months of 2009.
The content contained in this blog represents the opinions of Mr. Hempton. You should assume Mr. Hempton and his affiliates have positions in the securities discussed in this blog, and such beneficial ownership can create a conflict of interest regarding the objectivity of this blog. Statements in the blog are not guarantees of future performance and are subject to certain risks, uncertainties and other factors. Certain information in this blog concerning economic trends and performance is based on or derived from information provided by third-party sources. Mr. Hempton does not guarantee the accuracy of such information and has not independently verified the accuracy or completeness of such information or the assumptions on which such information is based. Such information may change after it is posted and Mr. Hempton is not obligated to, and may not, update it. The commentary in this blog in no way constitutes a solicitation of business, an offer of a security or a solicitation to purchase a security, or investment advice. In fact, it should not be relied upon in making investment decisions, ever. It is intended solely for the entertainment of the reader, and the author. In particular this blog is not directed for investment purposes at US Persons.
