tag:blogger.com,1999:blog-4815867514277794362.post886731302531813452..comments2024-03-08T06:18:28.125+11:00Comments on Bronte Capital: China Media Express and a comment on the efficient market hypothesisJohn Hemptonhttp://www.blogger.com/profile/03766274392122783128noreply@blogger.comBlogger19125tag:blogger.com,1999:blog-4815867514277794362.post-11680527398716363422011-04-20T01:17:26.862+10:002011-04-20T01:17:26.862+10:00When I need a laugh, John, I go back to the first ...When I need a laugh, John, I go back to the first thread you posted regarding CCME and read the bizarre assertions and threats of physical violence from the CCME staff. Excuse me, "anonymous internet posts."<br /><br />Is the Chinese economy built entirely on fraud? <br /><br />Sure, there's money changing hands, but without enforced regulations, reliable audits, prosecution of IP theft, etc -- why would anyone trust anything from China?Unsympathetichttps://www.blogger.com/profile/01139905123679721805noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-73548377914564648602011-04-13T10:14:35.022+10:002011-04-13T10:14:35.022+10:00Hi John,
I am curious on how you do this "[Br...Hi John,<br />I am curious on how you do this "[Bronte has a process for doing some third party checks - and even with them we have worked out ways of losing money!]". what sort of process you did to verify it?<br /><br />thanksJKhttps://www.blogger.com/profile/11399305413730366251noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-23088746562469674992011-04-09T02:21:39.461+10:002011-04-09T02:21:39.461+10:00Your good work is getting noticed where it really ...Your good work is getting noticed where it really matters...<br /><br />http://www.cnbc.com/id/42451764Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-77991693960196075462011-04-07T19:09:00.686+10:002011-04-07T19:09:00.686+10:00The short all Chinese RTOs idea seems like it woul...The short all Chinese RTOs idea seems like it would work out.<br /><br />I got a list of all Ping Luo stocks from a post at Zero Hedge, looked for those that could be shorted at a reasonable cost, and came up with CNYD, which I wrote about on seeking alpha:<br /><br />http://tinyurl.com/3h97smc<br /><br />The zero hedge list is here:<br /><br />http://www.zerohedge.com/article/it-time-short-every-single-global-hunter-buy-recommendationGnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-11967289303919292052011-04-07T13:49:17.456+10:002011-04-07T13:49:17.456+10:00Great post John. I am always amazed at the lack of...Great post John. I am always amazed at the lack of due diligence most managers of other peoples' money actually do.<br /><br />Out of curiosity, who is their primary banker (of the accounts we know about!).bennoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-2671556748268571182011-04-07T10:21:15.413+10:002011-04-07T10:21:15.413+10:00At this point, I'm almost thinking that just s...At this point, I'm almost thinking that just shorting all the Chinese RTO's that are public in the US (that are also borrowable obviously) as an equal weighted, very diversified basket would be the best thing to do. <br /><br />Even in the very unlikely scenario that 10% of the RTO's are real and become 5 baggers (which would take the average one from a 3-4 p/e to a 15-20)), and the rest are fake and only lose 80%, the trade will still make over 30%.<br /><br /> I think there is a good chance that almost all, if not all, are a fraud in some way. I'm inclined just to short them all and not worry about company specific analysis. Why bother? Plus it shields one from the specific volatility of each security.<br /><br />Or maybe one could just short a diversified basket of RTO's that share common fraud characteristics, like SAIC and SEC filing mismatches, or dilutive stock offerings despite supposed large cash balances, etc...<br /><br />Any thoughts?Hesternoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-28854194118230641012011-04-07T09:35:44.274+10:002011-04-07T09:35:44.274+10:00So I see the auditor was Deloitte? I thought Delo...So I see the auditor was Deloitte? I thought Deloitte walked on water, unlike your favorite whipping boy Mantyla McReynolds.<br /><br />On the second point about efficient markets, some of your readership proves you right in a very ironic way.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-22751744458797895452011-04-07T07:04:24.387+10:002011-04-07T07:04:24.387+10:00I think that your allegation re: investment manage...I think that your allegation re: investment managers under 35 is probably accurate, but I think it misses a very important nuance. The people who manage money by age 35 are probably very excellent at talking the talk, as a result of having spent too much time honing this ability, rather than sitting down and figuring out how exactly to walk the walk. <br /><br />I do believe that there are a number of very sophisticated young men/women in there 20s/early 30s who are capable of running money, but have spent their time honing an understanding of security valuation the value of thorough due diligence, and economic/financial trends, rather than working an interview and/or clients. Think Warren Buffett.<br /><br />The question is, how do we get those people into the proper place?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-37599176099380568832011-04-07T02:53:03.435+10:002011-04-07T02:53:03.435+10:00I think you are dead on about the under 35 year ol...I think you are dead on about the under 35 year old fund managers-- many of them are big swinging d#$ks who know next to nothing about proper due diligence and far too much about how to match a suit and tie.<br /><br />Great article. Keep up the good work!<br /><br /><a href="http://newvalueinvestor.blogspot.com" rel="nofollow">The New Value Investor</a>NVIhttps://www.blogger.com/profile/10302663534072901035noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-39435162527442804422011-04-06T13:15:13.818+10:002011-04-06T13:15:13.818+10:00How can we believe in any Chinese reverse merger w...How can we believe in any Chinese reverse merger when the corruption in China is systemic? The government is corrupt. The banks are corrupt. The businesses are corrupt. And, largely, citizens there act on these examples. <br /><br />One of the reasons the Chinese frauds went undetected so long is that no auditor would have believed that banks throughout China actively participate in the fraud. But for the right fee, your bank balance can be anything you need it to be.<br /><br />So if the business owners are corrupt, and the banks are also corrupt, cannot we at least appeal to the leaders of the country to address this situation? Here too Westerners simply cannot be made to understand that the leaders in China are also part of the corruption. What do you do when the son of a Communist Party official calls you and tells you to deposit $20M in an unnamed account in order to give him an interest free loan for a year. If you do the right thing, you are put out of business. If you do the wrong thing and give him the money, now you have to use your "Guanxi" to find someone even more powerful to get the money back.<br /><br />You don't believe that happens? Consider the amazing releases recently from FUQI where they reveal their CEO was asked by the "bank" to transfer about $86M out of his accounts to three unidentified customers. We should all clearly understand that the bank is just a conduit for the Communist party, and FUQI was simply doing what someone in the party told them to do. FUQI got the money back eventually, which should make no one feel any better.<br /><br />Western investors incorrectly impose their own legal system and frame of reference onto the Chinese culture, but that doesn't work. There is no rule of law in China. There is only power in China, and you have it or you do not. And if you have it, anything goes, and "to be rich is glorious."persistentonenoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-3196549817903800232011-04-06T09:18:15.075+10:002011-04-06T09:18:15.075+10:00I am not sure how that Glickenhouse kid thinks he ...I am not sure how that Glickenhouse kid thinks he has disproved the short-case on CAGC if he is showing up announced.<br />Plus it didn't look like those trucks would be traveling too far with bags packed the way they were about ready to fall off the truck at any turn. A few other red flags in the video he fails to consider....brittnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-44659028800600573142011-04-06T08:33:17.687+10:002011-04-06T08:33:17.687+10:00Really have enjoyed following your coverage of fra...Really have enjoyed following your coverage of frauds in China! Do you think we keep uncovering these until we see an overall bust in the market there, potentially led by the looming property bubble?<br />I would love to know your macro thoughts on the region...brittnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-46529186654850795392011-04-06T08:13:09.223+10:002011-04-06T08:13:09.223+10:00What if 80-90% of the RTOs are frauds? We are deal...What if 80-90% of the RTOs are frauds? We are dealing with a terrible adverse selection problemAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-28962338165974091912011-04-06T06:56:55.864+10:002011-04-06T06:56:55.864+10:00@Anonymous 6:10am
There are no, repeat no, revers...@Anonymous 6:10am<br /><br />There are no, repeat no, reverse merger stocks in the US markets that are not a scam in some way. Companies only go the reverse merger route (in the US) because they are crooks or stupid.<br /><br />Companies choose that route because they <b>knowingly</b> do not want to go the legit route. Sure, they may try to fool you and say it is "quicker" or "cheaper" but RTOs are simply playthings for crooks. Management teams that do them are either crooks themselves or suckers too.<br /><br />Why would anyone want to invest with crooks or with morons? Either way you lose.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-15112239733882149612011-04-06T06:10:30.632+10:002011-04-06T06:10:30.632+10:00I don't follow China RTO stocks, but I'm a...I don't follow China RTO stocks, but I'm assuming that most of them have been dragged down to some extent by the frauds. Would now be a good time to sift through the rest to identify those that are not frauds and find some long opportunities?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-59198956182722413192011-04-06T04:14:36.428+10:002011-04-06T04:14:36.428+10:00Isn't this the time to say, "the shorts a...Isn't this the time to say, "the shorts are worried"? ;-)<br /><br />(Great work on this John, it has been really nice to follow along)DanielCnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-5520635487646037872011-04-06T01:27:21.570+10:002011-04-06T01:27:21.570+10:00Is this firm delusional?
Looks like those CAGC ...Is this firm delusional? <br /><br />Looks like those CAGC guys put on quite a how if you tell them ahead of time that you're coming. <br /><br />John you might want to respond to the Glickenhouse report since it mentions you. Funny thing is the kid is proving your case and doesn't know it.<br /><br />http://www.youtube.com/watch?v=9MR7c-RiRyIAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-30386959236457094382011-04-06T00:31:57.363+10:002011-04-06T00:31:57.363+10:00nah,
except for PE firm CV Starr, there wasn'...nah,<br /><br />except for PE firm CV Starr, there wasn't any insti sponsorship of CCME.<br /><br />Besides, CCME has a single-digit PE up till its suspension. Only the silly value investors were banging the table on the supposedly valuation cheapness.<br /><br />The fool and his money are soon parted,Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-32522176691885758062011-04-06T00:18:53.865+10:002011-04-06T00:18:53.865+10:00Could not have expressed it better, and I tried!
...Could not have expressed it better, and I tried!<br /><br />http://buyersstrike.wordpress.com/2011/04/05/so-just-who-buys-these-things-rino-dgw-cvvt-chc-abat-yong-heat/Anonymousnoreply@blogger.com