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goldminingXpert (29.59)

Ding Dong. The CCME Witch Is Dead

Recs

17

March 14, 2011 – Comments (33) | RELATED TICKERS: CCME.DL

At long last: http://www.reuters.com/article/2011/03/14/chinamediaexpress-idUSL3E7EE31M20110314?feedType=RSS&feedName=marketsNews&rpc=43

"March 14 (Reuters) - China MediaExpress Holdings said its auditor severed its ties with the company citing inability to rely on the management, over a month after the advertising company's shares were battered on fraud allegations.

China MediaExpress, which was accused of overstating its revenue by online research firm Muddy Waters last month, also said its Chief Financial Officer Jacky Lam has tendered his resignation and that the company will delay filing its annual statements."

I hope you all got out in time. So many of us tried to warn you, but the pumpers continued in their deceitful acts as long as they possibly could.

33 Comments – Post Your Own

#1) On March 14, 2011 at 4:49 PM, ETFsRule (99.94) wrote:

"So many of us tried to warn you"

Yeah that's exactly what you did... with your very level-headed, respectful comments over on SA, right?

Obviously the stock will drop like a rock in the short term. Long-term, if they are legit, they will have an opportunity to prove it by showing us the money via dividends & stock buybacks.

Savor the moment, GMX. I'll probably lose a little money here, but judging by your score performance on TMF, I would guess that you have probably lost a lot more over the past couple of years :-)

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#2) On March 14, 2011 at 4:51 PM, Euro247 (38.23) wrote:

You called it.

Have you looked into DYP? From what I've gathered it is nothing even remotely close to what CCME and RINO were accused of but the PPS got punished as if it was.

 Not sure I should wait around for them to clear it all up anymore.

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#3) On March 14, 2011 at 4:53 PM, wolverine1987 (< 20) wrote:

Why is it that all message boards, including this one, have to always refer to "pumpers/dumpers" or "deceitful shorts?" Isn't is actually possible that people BELIEVE EXACTLY what they say? Isn't it possible people actually believed in the company and invested in it and so defended it online? And conversely that people thought it was a fraud and tried to warn others? Why is it that everyone's motives must be attacked? It's really tiresome. I am not attacking this post/poster specifically, I just tire of constantly reading others denigrate people writing on either side, as if they were trying to fool people. Maybe they just were wrong or right, honestly.

But on this topic-I think this proves you were right about this stock finally. Congrats.

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#4) On March 14, 2011 at 5:23 PM, JaysRage (89.84) wrote:

Congratulations.   You were absolutely right.    I am very surprised.   This is one of the better hoaxes that I have seen.   

Obviously the advantage of having a top-4 auditor is only good if they don't resign.   I haven't had a dog in the fight for a while, but this was the one case where the evidence seemed extremely strong on the side of CCME.   Cash and good auditors are a difficult combination to fool, and obviously there were not able to do so.  Again, congratulations on correctly predicting the outcome of this.   I've been watching it very carefully from the beginning.  

I hope you all got out in time. So many of us tried to warn you, but the pumpers continued in their deceitful acts as long as they possibly could.

I'll take the high road on this one.  

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#5) On March 14, 2011 at 5:38 PM, DragontoadX (25.52) wrote:

Congrats on your call GMX... I'm still not sure about the details, but clearly more is amiss here than I thought.

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#6) On March 14, 2011 at 5:54 PM, TMFBabo (100.00) wrote:

Just last night, I actually checked up on CCME just to see if anything new had happened - I was dying to find out.  Funny how a stock I don't even own anymore can compel me to check the news. 

I held CCME for a short-term profit in 2010, but I didn't have the guts to hold it long-term.  The one thing that always bothered me was how fantastic their margins were compared to competitors' margins.  That's the one thing that never passed the sniff test for me. 

Still, like others, I really thought this company was legit.  When all the short cases came out, I was undecided (and said as much at the time).  I found some of the bear arguments quite compelling (especially the competitor comparisons), but I was still undecided. 

I hope you all got out in time. So many of us tried to warn you, but the pumpers continued in their deceitful acts as long as they possibly could.

You know, many longs were just as convinced that CCME was 100% legit as you are that it's a fraud.  I guess the bickering between longs and shorts will continue forever...

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#7) On March 14, 2011 at 6:16 PM, goldminingXpert (29.59) wrote:

@ETFsRule -- Neither side was particularly civil over in those raging SA comment threads. I don't support the personal attacks some of the members that our side made. In regard to my personal financial performance, 2009 was nasty because I was short a rising market. I gave that up at the beginning of 2010 and things have gotten better since then. I am more than willing to fess up to my boneheaded call to short the market in the summer of 2009 however.

@Euro247 -- Haven't specifically studied DYP. My interests have skewed more toward the Citron picks (BORN, CCME, CHBT, SCOK) and the fertilizer plays (CAGC, CGA, YONG).

@Wolverine -- Ordinary people believed the company because shady people and firms such as Global Hunter and WCTBills (and a certain highly-rated CAPS player who hasn't shone his head recently) ignored the facts and did their best to obscure the valid concerns the shorts made.

@JaysRage -- Yesterday, after it was clear CCME was already in deep trouble, the bulls launched all sorts of insane personal vitriol against Roddy Boyd, a Fortune/NY Post writer, accusing him of all sorts of wicked schemes and personal indiscretions. Slandering such a reputable messenger when the stock you are pumping is already halted -- that's shameless.

@Dragontoadx -- Thanks. You've been a nice level-headed supporter of the company who hasn't stooped to the lows that many of the CCME bulls did. I wish you the best of luck in your future investments.

@TMFBabo -- While the bickering will continue, the world is finally running out of RINO.PK supporters.

And, as you said, there was no need to hold CCME long-term when there were so many red flags. Short sellers have extremely high conviction they are right before taking a position. If you are taking a long position against an all-star team of short sellers, you better be sure the long story checks out in every single way. If not, stay away. There's no shortage of cheap-looking Chinese equities to purchase.

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#8) On March 14, 2011 at 6:41 PM, goldminingXpert (29.59) wrote:

CHBT is next by the way. They lied about the stores, they lied about the rent, and Citron's been after them for months. CHBT is the walking dead.

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#9) On March 15, 2011 at 12:21 PM, ikkyu2 (99.19) wrote:

Yet another piece of proof, if we needed any more, that risk involves much more than just a stock's beta.

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#10) On March 15, 2011 at 1:38 PM, zzlangerhans (99.80) wrote:

#3 - the reason many of us refer negatively to "pumpers" is that we have seen so many blatant attempts to mislead the investing public into buying a stock on Seeking Alpha and other websites with extensive audiences. Seeking Alpha is particularly bad because it is widely read, virtually anyone can post an article there, and there's no editorial policy or consequences for publishing flagrant misinformation. When I counter a "pump" piece, I'm fighting a battle for the minds of a handful of people who might otherwise have invested in the stock and lost money. I feel badly for them, even if it's their own fault for being gullible. I know the market hurts a lot of people and I like to spread the philosophy of due diligence. I'm never short a stock that I criticize - I still haven't ever had the guts to risk shorting.

I write positively about stocks as well, but I always remain objective and clearly delineate the weaknesses and risks that need to be taken into account. Pumpers ignore them, gloss over them, or lie about them.

Articles on Seeking Alpha can move low-float stocks. I've seen it many times. Article comments and message board posts and Motley Fool pitches will not move stock prices regardless of what many high-strung people believe. Therefore SA article writers do have a responsibility to the investing public to write accurately, a responsibility they often ignore in favor of pursuing personal gain.

So why doesn't the same rule apply to the "bashers", guys like Ian who write negatively about stocks? Because gullible readers will often buy stocks based on one well-written but misleading article, but rarely will they short them. An inaccurate negative article might cause you to miss an opportunity to make money, but it won't make you lose money. If you're shorting stocks with doing due diligence, I have no sympathy for you.

When I see a lot of screaming about "bashers" and "shorties" I know the stock is likely to be in serious trouble. If I was comfortable in my long position I would be thankful for negative articles about a stock that pushed the share price lower. That would give me the opportunity to buy more and reduce my cost basis. Eventually when the company blows away estimates I'll be proven right and book my trading profits.

What I always wonder about is the mentality of people who feel compelled to defend their investments when a negative article is posted. Is it because they believe their comments will affect the share price? Or is it more of an issue that their egos are wrapped up in their decision to buy the stock and they take criticism of the company as a personal attack? I've always perceived these responses as a complete and utter waste of time and energy.

I'm very grateful that there are guys like GMX willing to take the abuse for criticizing stocks as well as the people who shamelessly promote them. My advice would be to push your ego to the back seat and embrace criticism of your stocks. You may get your feelings hurt at first, but in the long run you might find yourself reducing your losses. That goes a long way to soothing hurt feelings.  

 

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#11) On March 15, 2011 at 2:03 PM, JakilaTheHun (99.94) wrote:

I've kepta million miles away from the Chinese reverse-merger companies, because I've seen that many of them have major issues or were outright frauds.  I was an accountant before, so a lot of this stuff jumps out to me in a fairly obvious fashion. 

When I intiailly looked over CCME's financial statements, I wasn't eager to buy it, but I didn't see the obvious red flags that popped out with some of the other Chinese reverse-merger companies. 

Upon a second look, I found something that was interesting.  Not illegal, but not exactly good.  It appeared that the CEO was paying out a massive dividend to himself, which I found very suspicious.  The structure of the company apparently made this legal, but it's not the type of thing that screams out that the company is operating in the shareholders' interests.  If the company can pay a dividend to the CEO, it can certainly pay the same dividend to everyone else.

I've never discovered any other signs of fraud (in fairness, I haven't been looking very hard, either), but I think Deloitte quitting certainly suggests that there is a very high probability that this company is doing something that is shady.

 

I would keep away from all of these reverse-merger companies, no matter how good they sound.  Some of them are obvious frauds, but recent events might suggest that some of them are also not-quite-as-obvious frauds.

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#12) On March 15, 2011 at 2:54 PM, JaysRage (89.84) wrote:

Some great input from some of the best and brightest and most well-respected members of the CAPS community.   

zzlangerhans -- I think what you've written has extreme merit.   However, the approach is as important as the information if you really want to get the message across.  

There are more effective ways to point out deficiencies and inaccuracies than explosive and emotional outbursts like the one above.

Name-calling and insinuations are not only insulting, but they actually work against any argument that you might be trying to make because they decrease credibility.   Reasonable rational arguments with facts and defensible positions are going to build up a reputation and add credibility.   I don't see how pumper/basher labeling does anything but invoke emotions that lead to irrational entrenching of positions.   If the intention is really to educate and enlighten, then name-calling and insults would seem to be off the table. 

So why doesn't the same rule apply to the "bashers", guys like Ian who write negatively about stocks? Because gullible readers will often buy stocks based on one well-written but misleading article, but rarely will they short them. An inaccurate negative article might cause you to miss an opportunity to make money, but it won't make you lose money. If you're shorting stocks with doing due diligence, I have no sympathy for you.

I don't buy this.  The equation works both ways.   If someone has already bought into a stock before your article arrives, then you most definitely have lost them money if/when it drops in response.   You buy a stock.   Someone writes a bashing article that scares people into selling, whether it is merited or not, you have a paper loss on your books now that you either need to wait out or take.  From a short-term investing perspective, the article-writer has now single-handedly changed the "time-value" investment proposition for that particular investment.   I may now be forced to hold that position as the real value of the stock unfolds the misleading information in the article.   If your investment horizon was short-term for that particular stock, you now have to adjust your investment strategy, even though fundamentally nothing has changed except some misleading information that has made your portfolio worth less.   If you've done your due diligence, nothing in a SA should surprise you one way or the other.  It's just going to move the weak longs/shorts.  

Personally, I was wrong about CCME.    A number of the "safety-measures" that were in place for this stock when I initially invested were pealed away one by one to significantly increase the risk of the stock.   I got out when the risk no longer represented a good "time-value" investment proposition for me.   I didn't lose money but there are others who did.  

When you take a "stick-it-to-the-pumper-and-stupid-longs" bumper sticker on your posts, why should it surprise you when people don't want to listen? 

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#13) On March 15, 2011 at 5:03 PM, zzlangerhans (99.80) wrote:

Here's my last word on this since I prefer to write about stocks, not personalities. GMX is a huge intellectual asset in CAPS, and I don't want anyone to piss him off so much that he leaves. All I care about is that his analysis is worthwhile. I'd be happy to pay him $500 bucks for a day to research all the companies I'm long on and provide any criticism he wants to. He's welcome to sprinkle it with four-letter words and doubts about my human ancestry. He can even fling his feces at me as long as he stays within his Plexiglas enclosure.

I maintain the only people who are hurt by stock criticism are pump and dumpers and daytraders. Feeling sorry for daytraders caught upside down is like feeling bad for bacteria when you take an antibiotic. If the criticism is unjustified and the stock goes down, buy more. No criticism can overcome a buyout, blowout earnings, a positive phase III trial, or an FDA approval. But the sad truth is that most people would rather lose money than admit to themselves they aren't as smart as they thought they were.

ZZ out.

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#14) On March 15, 2011 at 10:56 PM, TMFBabo (100.00) wrote:

GMX is a huge intellectual asset in CAPS, and I don't want anyone to piss him off so much that he leaves. All I care about is that his analysis is worthwhile.

Agreed, I'm glad you're back and blogging, GMX.  I just don't think every CCME bull should be called a pumper, just like I don't think all shorts should be tarred and feathered for giving their arguments.  That's really all I meant to say - I hope you continue to post your bear case articles because I do read them, even if I never leave a comment.

I also realize now, by the way (upon a second reading), that you were probably only referring to certain people rather than "all CCME bulls" when you talked about pumpers. 

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#15) On March 16, 2011 at 1:45 AM, DragontoadX (25.52) wrote:

Thanks for the kind words GMX..  I hope you have success in your future fraud-fighting as well :)  

Now the question is... how much fraud are we talking about here... (or how bad will the situation appear to be at the point trading resumes) 

To be sure, I plan to get out of Dodge in short order once trading resumes, regardless of appearances at that point, but it does seem like there could potentially be some fireworks if the halt is extended... (maybe wishful thinking on my part, but stranger things have happened, right?)

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#16) On March 16, 2011 at 9:58 AM, goldminingXpert (29.59) wrote:

Thanks for the kind comments above. zzlangerhans is correct -- the neighbors do get upset if I make it out of the plexiglass enclosure. ;)

Dragontoad: I think you are better off if the halt is short. A lot of people are still running around saying CCME will surprise everyone with a stock buyback/special dividend/etc. and that Deloitte was forced to resign to save face -- not because of any real trouble. Given all that, the stock probably still opens at like 8 bucks if it opens soon. However, I think the odds of a pleasant outcome drop the longer the halt goes on. Totally could be wrong though -- it's a tough situation to read. 

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#17) On March 16, 2011 at 10:20 AM, goldminingXpert (29.59) wrote:

"I'd be happy to pay him $500 bucks for a day to research all the companies I'm long on and provide any criticism he wants to."

If you ever need a personal research assistant/analyst, let me know. I would be honored to work with you.

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#18) On March 17, 2011 at 5:10 PM, JaysRage (89.84) wrote:

Well, the worst is confirmed.   DTT resigned because they weren't allowed proper access to the bank records (to verify the cash).    There couldn't be a worse reason.   This is the endgame.   This stock is completely toast, for sure in the short term.  

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#19) On March 17, 2011 at 7:41 PM, ETFsRule (99.94) wrote:

JaysRage: Deloitte didn't actually say that they weren't allowed proper access to the bank records. Notice how careful they were with their wording to avoid actually saying that.

I think they just wanted to resign, and therefore they are saying that they didn't have enough "confidence" in the "process".

I still don't understand the whole thing. Jacky Lam, as the CFO, must have had access to the company's bank accounts, right? Then why did he buy 100,000 shares in December at $15/share?CCME has been operating since 2003, and Jacky has been their CFO since May 2009. He has done nothing but purchase shares since then.

Also, from these numbers, it looks like CCME's CEO, Hawk Philip J, has gotten royally screwed here. He hasn't sold a single share, and he owns an incredible 6,635,200 shares worth of stock options. Also, for instance, who is "Waters Louis A"? He is listed as a director of the company, and if the stock price drops he stands to lose millions of dollars.

I guess the only explanation is that Cheng Zheng managed to scam everybody? How could he convince all these insiders that the company was real? Or was he paying them all in cash, outside the company, so that it wouldn't show up in the insider transactions? Even if that's the case he still would have had to trick Starr and all the analysts following the company.

And before anyone writes off Starr too quickly, just remember that this is a firm which has been investing in China for more than 50 years. They have a strong presence there.

Next, there is the fact that many people online have reported using the site www.switow.com and they have recieved their merchandise without a problem.

To me, occam's razor seems to indicate that the company is real, and Deloitte resigned because of risk-aversion (they didn't want to risk their corporate image on such a highly-scrutinized company). If that were the case, they would need to give some reason why they were resigning.

This is the exact wording from the article:

"One of the points of contention between Deloitte and management, according to the filing, were "issues related to the reliability of the bank confirmation process." Deloitte recommended a forensic investigation, and resigned when it felt that China Media management didn't act in good faith to proceed with Deloitte's recommended course of action, the 8-K filing said."

Here is one hypothetical conversation:

Deloitte: We need to see a full, forensic investigation of your finances before we can sign the 10-k.

CCME: What? That's crazy, that type of investigation costs millions of dollars and takes months to complete. We're more than happy to show you the full bank records. Here they are. (shows Deloitte the bank records)

Deloitte: (ignoring the bank records) Well, if you aren't going to comply with out recommendations, we have no choice but to resign. (and cover our behinds in the process)

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#20) On March 17, 2011 at 8:20 PM, goldminingXpert (29.59) wrote:

ETFsRule -- There was a sale from a related party of 100,000 shares at the same time of the "purchase" by the CFO. Short sellers demonstrated this a month ago. The warning signs were all there.

Deloitte resigned because the cash isn't real. You got to give it up man. It's over. 

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#21) On March 17, 2011 at 9:24 PM, DragontoadX (25.52) wrote:

ETFsRule:  I sure hope you're right... I'm not holding my breath at this point though. 

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#22) On March 17, 2011 at 11:00 PM, ETFsRule (99.94) wrote:

DragontoadX: We'll see, man. I'm not holding my breath either but I'm hoping for the best. If I think I'm wrong I'll be the first to admit it, but I have just seen too many holes in the short arguments. I'm trying to stay detached from the stock and look at both sides, but the entire short case just doesn't make much sense to me.

There was also the issue of the short-lived "Deloitte Watch" website that was quickly taken down, which leads me to believe that the shorts were just trying to make Deloitte quit regardless of whether or not CCME was legit.

goldminingXpert: Which short sellers demonstrated that? I'd like to look into it some more.

Even if it is true, 100,000 shares is still just a drop in the bucket compared to the nearly 7 million held by the company's CEO.

If I'm wrong, I'll lose most of my investment. If I'm right, then there are a lot of insiders who are still heavily invested in this company and will need to find some way to prove their legitimacy. Without a top-tier auditor on their side, this will have to come in the form of dividends and/or buybacks. If that doesn't happen in the next 1-2 years I'll admit I was wrong.

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#23) On March 18, 2011 at 12:13 AM, ETFsRule (99.94) wrote:

Correction: "Hawk Philip J" of course is not CCME's CEO, but he was the CEO of the blank-check company (Thousand Space Holding Ltd) that later became CCME.

Thousand Space Holding Ltd is still listed as a major holder of CCME, so I believe Mr. Hawk would still stand to lose money if CCME were indeed fraudulent. More on Mr Hawk can be seen here.

It appears that Mr Hawk is from a company called Team, Inc (TISI) along with another CCME investor who I mentioned earlier: WATERS LOUIS A.

Mr Hawk also seems to have had some kind of involvement with Enron Products Marketing Company (uh oh, not a good sign):

http://www.corporationwiki.com/Texas/Houston/philip-j-hawk-P3941047.aspx

And there is some kind of weird Houston/Delaware connection with a company called Eott Energy Corp which seems to have been affiliated with Enron.

More on Mr. Hawk.

Sorry for cluttering your blog but I wanted to post this stuff before I lost it. I'll move elsewhere in the future.

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#24) On March 18, 2011 at 10:20 AM, JaysRage (89.84) wrote:

"One of the points of contention between Deloitte and management, according to the filing, were "issues related to the reliability of the bank confirmation process." Deloitte recommended a forensic investigation, and resigned when it felt that China Media management didn't act in good faith to proceed with Deloitte's recommended course of action, the 8-K filing said."

There are multiple ways to verify cash.   One of them is to take the bank records as they are given to the auditor from the company.   The other is to independently verify the bank statements directly.   My interpretation (and a more likely one than yours above) is that Deloitte demanded that CCME be taken out of the middle of this transaction (to more completely verify the cash transactions).  If CCME balked at this, this is very serious.   It points to the possibility that they are modifying the bank records before giving them to Deloitte.    I'm not saying for sure that this is what went down, but it sure is a very logical conclusion.   Lam's subsequent resignation and an additional independent board member resignation are all supporting evidence.   I just don't see how this can be painted well.   

Over time, if they are even 1/2 of what they said they were, they can certainly recover from this, but the short term effects will not be good at all. 

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#25) On March 18, 2011 at 10:36 AM, goldminingXpert (29.59) wrote:

YONG going down now too. Down more to $5.87 almost a whole buck off. No negative reports out today -- must be people re-reading the last 10-k...

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#26) On March 19, 2011 at 5:15 PM, simplemts (< 20) wrote:

I have to admit GMX, my concern for you is the following:

 

1) You jumped on the bandwagon of shorting the market at the bottom and lost a LOT of money.  I mean you advised us all you were better the farm shorting the market and got absolutely killed in real-life.

 2) I do not know if this is CAPS only or real-life now, but you seem to be targetting China Smallcaps as they have almost all dropped 20, 30, 50% from recent highs.  

 

Might you not be making the same mistakes again being one of the common retail investors?  

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#27) On March 19, 2011 at 5:22 PM, simplemts (< 20) wrote:

As a follow-up to my above comment, it seems like the last 2 weeks we have seen a half dozen halts (CCME, SDTH, CAAS, etc.) and in the last couple of months a dramatic increase in hit pieces.

 

Might now not be the time for a "cleansing" in the Chinese RTO sector where some bad seeds are taken out and the good rise with the tide again??? 

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#28) On March 20, 2011 at 1:12 PM, goldminingXpert (29.59) wrote:

Simplemts: To be more accurate, I started shorting the market in 2006, was early and wrong, the bandwagon joined me in 2008, and I made a ton of money, then I stayed on the bandwagon long after others got off and lost a fair chunk of my gains.

"Might now not be the time for a "cleansing" in the Chinese RTO sector where some bad seeds are taken out and the good rise with the tide again??? "

I'm not convinced a single one of them is good. Are you?

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#29) On March 20, 2011 at 4:04 PM, simplemts (< 20) wrote:

Yes.  I am.  I am confident one company out of 250+ is "Legit" in the country of China.  Not every single Chinese person is a conman.

  

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#30) On March 20, 2011 at 4:08 PM, simplemts (< 20) wrote:

You may recall, your own words:

 "Long story short, the S&P will be under 800 at a very minimum by the end of the year, and the 666 low will be taken out in 2010, one just has to be patient and wait for perception to catch up to reality." 

~August 31, 2009.

There is no shame in admitting you are sometimes 100% completely wrong.  The above call, and the dozens, and dozens of others you posted, were terribly wrong.  I believe again you are terribly wrong and following the masses at a turning point.

 

The next few weeks, we should see a lot more RTOs crumble, I do not deny that (halts, delays in filings, etc.).  After that, the cleansing will be done for another year and the sector overall will likely turn up. 

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#31) On March 20, 2011 at 4:55 PM, goldminingXpert (29.59) wrote:

I said I was wrong, multiple times. I shorted too early, and stayed short too late. I got on the bear bandwagon long before it was popular (2006) and finally got off (early 2010) long after that ship had sailed.

To be more accurate, I was wrong about one call many times. Just as I was right about one call (CCME is a fraud) many times, or just as I was right about one call (RST is overvalued) zillions of times. You can judge the whole body of work however you like.

All that said, you've provided no evidence that the Chinese  RTO space simply suffers from bad seeds. Instead, you've attacked me, which is all fine and fun but does nothing to further your argument.

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#32) On March 20, 2011 at 5:19 PM, simplemts (< 20) wrote:

You claim 100% of companies are fraud in the Chinese RTO space, and have provided no evidence either.  Simply having ~5% "proven" or less does not prove 100%.

It's like saying out of 20 stocks 1 is up, so they will all be up, eventually!

In short, I agree with you in the regard that there are a LOT of bad seeds (even if only 20%, to have 20% of a sector as a fraud will scare most investors away). 

 I do not believe GFRE for one is a fraud.  I also do not believe WATG, SORL, HOGS, and a few others are frauds either.

 I think low quality stocks include CELM, VALV, and dozens others.  I do not disagree with you on that. 

 I think the turning point may appear in the next few weeks though, we have already had a huge influx of hit pieces, barrons and the street have already published dozens of articles collectively, and a half dozen companies were halted.  I believe in the next few weeks a few more halts will occur, several delays in filings will occur,  and the "sentiment" for this sector will reach a bottom, that's all I'm trying to state in my argument.  I overall think your macro calls are great, but that you miss turning points.

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#33) On March 20, 2011 at 5:25 PM, goldminingXpert (29.59) wrote:

gmx said: "I'm not convinced a single one of them is good."

simple said: You claim 100% of companies are fraud in the Chinese RTO space, and have provided no evidence either.

No, I did not claim that 100% are frauds. I instead stated that I have seen no proof forcing me to believe that any of them are genuine. Claiming 100% as frauds is rather silly as then I would have to investigate each RTO Chinese company out there (several hundred) before being able to claim that. I don't have the time or desire to do that.

Instead, I claimed that I am not convinced that any of them are geniune. This claim is obviously true -- as only I know what I am convinced of. If someone presents convincing evidence to me that suggests at least one of them is genuine, then the thesis will be changed. Up until now, every Chinese RTO I have investigated in depth (CAGC, CGA, YONG, FUQI, CCME, CHBT, LPH, AUTC, and a couple others) has had problems that prevent me from believing they are genuine.

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