lessthaniv

Looks like Francis Chou has been increasing his position in OSTK lately: Perhaps timely given the fall in price in front of the Christmas season. http://www.secform4.com/insider-trading/1130713.htm

Enjoyed that. Thanks for posting. <IV

berkshiremystery, The 13f form is only a list of "13f securities". That's a defined term with the SEC. It should not be mistaken for a complete listing of an institutional managers holdings and quite frankly I believe that's a very common mistake. Currently, Fairfax Financial is not a 13F security. Generally, a 13F security is one of the following; exchange-traded (e.g., NYSE, AMEX) or NASDAQ-quoted stocks, equity options and warrants, shares of closed-end investment companies, and certain convertible debt securities. Shares of open-end investment companies, i.e., mutual funds, are not included and, therefore, will not be listed on Form 13F. Shares of exchange-traded funds ("ETFs"), however, are on the Official List and should be reported. You can review the official list through the following link. If you pull up the list and do a search in the pdf document for Fairfax you'll find it returns nothing ... Cheers,

As much as I dislike Tilson ... I did the same thing. I took some profits in my FFH position and moved to what I perceive to be better opportunities. I'll be back though. ;D

The Tembec press release (q2) communicates their opinion that the softening in NBSK at the moment will be followed by firming prices in later part of the year as industry conditions remain favorable for producers.

Fully agree. King888 you should read through the CFA Ethics & Standards. This will assist you and provide you with a framework to answer these questions. In this case the test is whether your conversations led to "material, non-public information". Both those terms are defined and you can read through the code by going to the following link ... http://www.investopedia.com/exam-guide/cfa-level-1/ethics-standards/standard-nonpublic-information.asp Cheers, <IV

Ever reviewed some the new vertical farming businesses starting to emerge? Just curious if you have an opinion.

It should be noted that the company put out the following press release right after this article went to press: Sino-Forest says Globe and Mail article incorrect 2011-06-20 08:42 ET - News Release Mr. Dave Horsley reports SINO-FOREST RESPONDS TO THE GLOBE AND MAIL ARTICLE Sino-Forest Corp. has released the following statement in response to the incorrect portrayal of its business provided by The Globe and Mail in an article published on Saturday, June 18, 2011. At the heart of The Globe and Mail's article is the assertion that there is a discrepancy between the company's public disclosure regarding its 2007 master agreement with Gengma Dai and Wa Tribes Autonomous County Forestry Ltd. for the purchase of plantations in the province of Yunnan (filed in the data room on the company's website); acquisitions made under it; and the description of the master agreement and related acquisitions apparently provided by Gengma Dai and Wa to The Globe and Mail. There is no discrepancy. The chairman of Gengma Dai and Wa, Xie Hongting, was introduced by Sino-Forest to The Globe and Mail in an open attempt to address some of its many questions. After the interview with Mr. Xie, the company had its own background interview with The Globe and Mail, during which it became clear there were some factual misunderstandings regarding the company's ownership of trees in Yunnan. The company informed The Globe and Mail that Mr. Xie would clarify the relationship between both parties. However, The Globe and Mail chose not to wait for Gengma Dai and Wa's complete description of its relationship with Sino-Forest. The company has provided the following status update with respect to its Yunnan tree ownership resulting from the master agreement entered into with Gengma Dai and Wa in 2007. Sino-Forest entered into the first Yunnan master agreement in 2007 (filed in the data room on the company's website). The master agreement had a target to acquire approximately 200,000 hectares (three million mu (mu being the common Chinese unit of land measurement that is equivalent to 1/15th of a hectare)) of standing timber. The master agreement does not specify a maximum amount of standing timber to be acquired under the agreement (the phrase "up to" in The Globe and Mail's article is inaccurate and not a reflection of the company's public disclosures on this matter). As per Sino-Forest's 2010 annual information form, the company had acquired 190,300 hectares (2,855,000 mu) under the master agreement and retained holdings of 186,700 hectares (2.8 million mu) as at Dec. 31, 2010. As per the management's discussion and analysis (MD&A) that accompanied the financial statements for the first quarter of 2011, the company had acquired approximately a total of 230,200 hectares (3,453,000 mu) under the master agreement as of March 31, 2011. In 2007, through its subsidiaries, the company entered into specific agreements to acquire standing timber and land-use rights on 12,667 hectares (190,000 mu) of Gengma Dai and Wa's land in Lincang, Yunnan. A sample of these agreements has previously been published on the company's website. Subsequent to that initial sale, Gengma Dai and Wa has sold approximately 34,667 hectares (520,000 mu) of standing timber located in Lincang, Yunnan, to subsidiaries of the company. Of this amount, approximately 12,000 hectares (180,000 mu) comprised standing timber owned by Gengma Dai and Wa, and approximately 22,667 hectares (340,000 mu) comprised standing timber sold to the company by others. Gengma Dai and Wa acted as a purchasing agent in those transactions by arranging the sales of bundles of standing timber parcels to the company and its subsidiaries by the owners of such standing timber. In addition, Gengma Dai and Wa has acted as the company's purchasing agent, under the master agreement, for the purchase of other standing timber elsewhere in Yunnan, beyond Lincang, totalling approximately 182,867 hectares (2.743 million mu). As a result, in total under the master agreement, the company, through its subsidiaries, has acquired standing timber of 182,867 hectares (2,743,000 mu), plus 34,667 hectares (520,000 mu) and 12,667 hectares (190,000 mu), for a total of approximately 230,200 hectares, or approximately 3,453,000 mu. Gengma Dai and Wa is currently continuing to work with the company on further purchases in Lincang, Yunnan. This breakdown is completely consistent with the company's public disclosure of its total acquisitions of standing timber hectares in Yunnan in its first quarter 2011 MD&A of 230,200 hectares (3,453,00 mu) acquired pursuant to the Yunnan master agreement; it is also consistent with the comments of Mr. Xie of Gengma Dai and Wa to The Globe and Mail. When asked in the interview how much he had sold to Sino-Forest, he accurately said he had sold the company "almost 200,000 mu" (13,333 hectares); this represents land-use rights on land provided by Gengma Dai and Wa, and is an approximate total of the company's land lease certificates in Yunnan. In addition, Gengma Dai and Wa has sold standing timber for a total of another 34,667 hectares (520,000 mu) in Lincang both as owner and as agent, and acted as an agent on another 182,867 hectares (2,743,000 mu) elsewhere in Yunnan. For further clarity, the company attaches Gengma Dai and Wa's own statement on this matter, which was issued over the weekend, again consistent with what the company has set out in the preceding paragraphs. This is the clarification that the company asked The Globe and Mail to wait for prior to publication; however, the newspaper chose to publish the article without all of the facts on June 18. The Globe and Mail's article is further inaccurate in a critical part of its research. It refers to "Gengma Forestry," with its "litter-strewn" office "up a dusty cement staircase" and its office manager, Zhang Ling. Very poetic, but completely irrelevant, because based on the information that The Globe and Mail provided to the company, the company believes that this is the address of a business known as Gengma Dai and Wa Autonomous County Forestry Industrial Co. Ltd.; it is a different organization from Gengma Dai and Wa Tribes Autonomous County Forestry, with which Sino-Forest has its master agreement, which is based at an entirely different address. Upon becoming aware of this incorrect description, the company provided the correct address for Gengma Dai and Wa Tribes Autonomous County Forestry to The Globe and Mail. In addition, in support of its case The Globe and Mail quotes an unnamed broker, who stated that "most of the land with good trees around Gengma is all sold out." The scope of the master agreement encompasses the whole of Yunnan. For reference, Gengma county represents approximately 16 per cent of the land mass of Lincang area and less than 1 per cent of Yunnan as a whole. Furthermore, regarding The Globe and Mail's reference to an unnamed Yunnan Provincial Forestry Bureau official saying that Sino-Forest manages far less than 200,000 hectares, as indicated in the company's written response to The Globe and Mail, the provincial-level bureau records land ownership and land lease transactions, but does not separately record sales of standing timber. As publicly disclosed, the substantial majority of Sino-Forest's purchases are standing timber. The provincial-level forestry bureau will therefore not have full details of the total area of timber purchases under the names of Sino-Forest and its subsidiaries. The company would like to remind investors that most domestic and multinational companies with significant exposure to China, a country with a rapidly evolving business environment, have structures and operations that are complex and significantly different from the North American environment, and that can be complex to explain. For example, there is the distinction between ownership of standing timber and leasing the underlying land by plantation operators, whereas only the state and farmers' collective "own" the land that exists in China. The independent committee has told the board that the review and examination being undertaken by the independent committee with the assistance of PricewaterhouseCoopers and its independent legal advisers will likely take at least two to three months, which is normal for such processes. The company fully understands that the pressure for answers is significant, but stands by its public disclosure and, as far as possible, asks that investors trust that process, and allow it to be conducted fully and definitively, not overjudging single articles or publications that are not produced by persons necessarily familiar with the forestry business or business practices in China, that might not be fully sourced or accurate. During the course of the independent committee's examination, the board expects it will provide updates from such process as appropriate. That is precisely why the company and independent committee need the time to complete the process. Terms used in this announcement Gengma county in Yunnan falls within the jurisdiction of Lincang metropolitan area. We seek Safe Harbor.

If movie goers had any clue what they were doing to their bodies this stuff would be illegal to sell: In a 3 hours sitting, if you consume a large popcorn washed down by a large soda then here is what you've done to yourself, roughly speaking: Large Popcorn: A large popcorn from a movie theater on average contains around 20 cups of popcorn. Including the non-hydrogenated soybean oil topping, aka "butter", you devoured 1,200 calories, and 60 grams of saturated, artery-clogging fat. That's the equivalent of two Pizza Hut Personal Pan Pepperoni Pizzas, plus an extra two days' worth of saturated fat. Wait, we're not done yet. In order to make your large popcorn taste even better and ensure you buy that large soda combo, the large popcorn is coated in a massive amount of sodium. Up to 1500 mg in fact! That's more than an entire days worth. Large Soda: A large soda ranges from 44 ounces (5 1/2 cups) to 54 ounces (nearly 7 cups) for an extra 400 to 500 calories and 26 to 33 teaspoons of sugar. If you go for the combo: 1700 Calories 1500 mg Salt 60 g saturated fat 30 teaspoons of sugar (roughly 2/3rds cup) So, next time you go to the movies ... Take a small bag of home made trail mix and a bottled water! <IV

Offshore not in PRC ($M) Located in PRC ($M) Total ($M) Cash 683.93 300.29 984.22 Short term deposits 12.9 20.29 33.19 Total 696.83 320.58 1017.41 Greenheart 70.66 0 70.66 Consolidated per BS 767.49 320.58 1088.07

They are in the dataroom although they are not complete.

Personally, I think its instructive to chronologically review what Orient Paper has overcome in the last 12 months. Funny how the original research report was given so much press, yet the end result has received very little press. Jan 2010 : In January of 2010, according to the company's CEO Mr. Zhenyong Liu, Orient Paper was visited by representatives of a research firm known as W.A.B. Capital , which is owned by Mr. Bill Block. The two representatives of W.A.B. Capital, Mr. Carson Block, who is Mr. Bill Block's son, and Mr. Sean Regan, toured the plant for less than an hour and then offered to publish a positive research report in exchange for a large sum of money and equity compensation. We refused their offer. The next we heard from these gentlemen was on June 28, 2010, when they published a 30 page report under the name of a new firm named Muddy Waters, LLC ("Muddy Waters"), alleging that our company was a fraud and that management had misappropriated investors' money http://www.scribd.com/doc/55331985/Muddy-Waters-Research-ONP-June-2010 In the following article, Richard Kelertas, an analyst at Dundee Capital Markets suggests the sum discussed for the positive research report was $300,000. That sum is confirmed buy other new articles published on the matter. http://www.workingforest.com/bay-street-veteran-fires-back-sino-forests-accuser/ May 2010: Orient Paper trades around $8-$9 per share. June 2010: In June of 2010 Carson Block started a brand new research firm Called Muddy Waters Research. Other than a brief stint with his Dad's firm, Carson has no verifiable experience as a research analyst. He has no apparent industry experience in the Pulp & Paper industry. Carson Block does not carry credentials or licenses such as CFA, Series 7 or 63. If Carson Block was a member such organizations like the CFA society he would be in direct violation of its codes of conduct. After being turned downed from Orient Paper for providing a positive research report in exchange for $300,000 and equity, Carson launches a scathing research piece (attached above) calling Orient Paper a fraud. A summary of that report (as provided by Muddy Waters) is listed below (full report linked above): We are confident that ONP is a fraud. Its purpose is to raise and misappropriate tens of millions of dollars. Approximately $30 million has been misappropriated since October 2009. ONP overstated 2008 revenue by 27x. ONP overstated 2009 revenue by 40x. ONP’s claims about its top 10 customers support our fraud conclusion. ONP overvalues its assets by at least 10x. The value of ONP’s Production Lines is greatly overstated. ONP’s inventory is overstated by millions of dollars. ONP’s claim of inventory turnover of 32.5x and 16.8x in 2008 and 2009 (respectively) are without credibility when compared to those of China’s industry leaders, which range from 4.3x to 7.7x. ONP overstates its gross profit margin by hundreds of basis points. Rick Pearson is a Beijing-based private investor focusing on U.S.-listed China small-cap stocks. Until 2005, Pearson was a director at Deutsche Bank, spending nine years in equity capital markets in New York, Hong Kong and London. Previously, he spent time working in venture capital in Beijing. Mr. Pearson graduated magna cum laude with a degree in finance from the University of Southern California and studied Mandarin for six years. He has frequently lived, worked and traveled in China since 1992. Rick wrote the following linked article. He toured Orient Paper the same day that Carson Block and Sean Regan did and shares his experience with these two old classmates. http://www.thestreet.com/story/10797742/1/orient-paper-story-behind-fraud-report.html The company itself denies any wrongdoing, and shows some glaring errors in the Muddy Waters Research Paper. For instance this little beauty: Among the many inaccuracies in the report, Muddy Waters points to a "smoking gun" that they claim proves Orient Paper "overstated its 2008 revenue by 27 times." The report claims that this supposed "smoking gun" is that the audited 2008 PRC financial statements for "He Bei Oriental Paper Co. Ltd.", which they claim is Orient Paper's China operating subsidiary, shows revenue of only RMB 16.3 million or approximately $2.4 million vs. the $65.2 million that Orient Paper claims HBOP generated in its SEC filings. The problem with this supposed "smoking gun" is that "He Bei Oriental Paper Co. Ltd." is not Orient Paper's China operating subsidiary. Orient Paper's China operating subsidiary is "Hebei Baoding Orient Paper Milling Co., Ltd". Even though the names may sound similar, "He Bei Oriental Paper Co., Ltd." is a very small paper manufacturer in Baoding and Orient Paper has no direct or indirect relationship with this company July 2010: In July 2010, plagued by a stock price that has fallen by 50%, the Audit Committee of the Board of Directors of Orient Paper firmly believing that the allegations made by Muddy Waters are categorically false and without merit decide to take the exceptional step of retaining a top-tier international law firm and a Big Four audit firm to conduct an independent third-party investigation into these accusations in order to further reassure investors of the integrity of our financial statements, business operations, customer and supplier relationships, and the use of proceeds from our capital markets activities. August 2010: Deliotte & Touche together with Loeb & Loeb are hired. Orient Paper launches a new corporate and investor relations website. October 2010: Orient Paper updates shareholders on the progress on October 25th. Almost 4 months since the initial research report from Muddy Waters. "We believe we have conducted a detailed and thorough independent investigation over the last three months and are pleased to announce it has entered its final stage," said Mr. Drew Bernstein, Chairman of Orient Paper's Audit Committee. "We continue to work with Loeb & Loeb and Deloitte to complete the rest of the investigation on schedule and look forward to providing the results to the Board of Directors." November 2010: Independent Audit is completed with the following findings: "We said at that time that this report was categorically false and provided extensive documentation to prove this. However, Muddy Waters and their confederates ignored the evidence and continued to publish false and misleading information regarding our company in a reckless manner that appears to have been designed to enrich themselves and other unknown parties while disrupting the orderly trading in our stock," Mr. Liu continued. "Given the severity of the allegations, our independent board appointed the audit committee to conduct an independent investigation with the assistance of Loeb, Deloitte, and other experts. This investigation has now concluded and determined that there is no evidence to support the allegations made by Muddy Waters that Orient Paper misappropriated funds from investors, no evidence that we overstated our revenues, no evidence that we overstated the number of workers we employed and no evidence that our disclosures regarding our top 10 customers support charges of fraud. Orient Paper has been caused significant damages by the false and irresponsible reports published by Muddy Waters. But we were resolute in following best practices in corporate governance to put this matter finally behind us and provide our shareholders assurance as to the correctness of our actions. Our heart goes out to the hundreds of investors who suffered financial damages as a result of Muddy Waters and other unknown parties. We are now firmly focused on the future and executing our plans to grow our business and build long term value, just as we were on the day Muddy Waters first came to visit us, about ten months ago," concluded Mr. Liu. Today: Stock appears to be recovering a bit. Trading around 4X earnings. This was a classic "Short & Distort" campaign that should be used as a case study within exchange commission classrooms. Carson's errors in his Orient Paper analysis are so glaring (not even verifying he is commenting on the right subs) that I can only consider them extremely clumsy or purposeful. I side with later given his business model was to provide this report for "free" and make money by shorting. Now, with that background .... think about Sino. EDIT: Adding link to Rick Pearson's video of ONP. He is long the stock and builds a case for growth. You'll note Carson Block touring in the background too. http://www.youtube.com/user/bfoxwebguy

Let's just suspend belief for a moment, regardless of what side you're on. The analysts have previously stated that they dropped coverage because of a lack of information. Now consider yourself an analyst. You have 5+ years and your reputation on the line. You don't know what's true and not. Are you really going to say "meh, I don't really see a point in this tour until the report is done..." or are you going to jump at the chance to see with your own eyes wtf is going on? Know this like you would know to pull out of a girl who isn't on the pill: If you are accused of a fraud of this magnitude, you would do everything in your power to provide proof that you are legitimate. If this means that the analysts want Poyry there, you will make it happen. If that means the you dont sleep for a few days so you have more time to meet with PwC and tour with the analysts, you will make it happen. If that means firing the lawyers who apparently advised you a buyback is a bad idea, giving information to analysts on a tour is a bad idea, and keeping quiet is a good idea, then you fire the lawyers. Whatever it takes to make sure the analysts feel a tour is worth their time and makes it happens. Boy, this just keeps getting better. See my post directly above ???

Yah, a company that is under the suspicion of massive fraud should certainly have their press releases taken at face value. It's not coming from the company's mouth, it's coming from the analysts mouth. http://www.theglobeandmail.com/globe-investor/sinoforest/for-sino-forest-watchers-the-chinese-tour-must-wait/article2088146/ From the article: "Analysts confirmed that they advised the company to postpone the trip because it wouldn’t be helpful." Stephen Atkinson, an analyst at BMO Nesbitt Burns who covers Sino-Forest, agreed with that assessment. “Basically, for the trip to be worthwhile, the analysts really need to meet the auditors involved, as well as [Poyry, the company that did a valuation of its forest land]. At the moment, these people wouldn’t be available,” he said. “I and other analysts said ‘No, we’re better off to wait and do everything all at once, rather than go there, get a bit of information and then go back again,’” Mr. Atkinson said. But don't let the facts get in the way ...

http://www.bloomberg.com/news/2011-07-04/wellington-controls-11-5-of-sino-forest-as-timber-producer-s-stock-drops.html Wellington looks to have bought a significant chunk.

As of today both Harbin and Sino Forest have been on the naked short sale list for 13 days. But, is that really a surprise? http://www.buyins.net/tools/short_list.php?dys=%3E12

Filtering the Muddy Water http://susan-mallin.blogspot.com/search/label/muddy%20waters

Reading up on Orient Paper: ONP tonight. This is another company that Carson Block wrote about. Sounds like his inaugural report. From what I've gathered so far here is what's occurred. 1) January 2010: Carson approaches ONP while working for Daddy's firm W.A.B Capital. Tours the facilities. 2) Offers to write a glowing report for a large sum of money and an equity interest. 3) Company turns the offer down. 4) June 2010: Carson shows up again under the Muddy Waters banner with a scathing 30-page report calling the company a fraud and alleging the misappropriation of $30M worth of corporate funds and various other dubious acts. Carson is short the stock and in a position to gain significantly from the fall in the companies stock. 5) Given the severity of the allegations, the audit committee is forced to form an independent committee to investigate these allegations. 6) It took the company from the end of June to the end of November to complete the investigation which concluded with a report that the allegations were bogus. Stakeholders have lost: Reputations, market cap, numerous expenses to cover the costs of the Independent committee: The following excerpt is taken from a June 30th press release issued by the company ... Muddy Waters claims in the report that as a result of its short position on the day the report was issued it stands to realize significant gains in the event that the price of Orient Paper's stock declines. Additionally, Muddy Waters states in the report that they make no representation as to the accuracy, timeliness or completeness of the information they provided. Furthermore, Muddy Waters has no apparent history of providing credible independent research or any research for that matter as they state this was their "inaugural report" and even though their research is "available as a subscription service" to institutional investors and they are available for "confidential due diligence engagements" they were making an exception with this report which is being provided "free of charge." According to their website, Muddy Waters consists of a two-person team that, based on a review of the bios on their website, has no apparent experience in the paper industry in or outside of China. In addition, the team only visited Orient Paper's facility once for 90 minutes after a major snowstorm. One of the team members is a U.S.-educated former attorney and owner of a self-storage business in Shanghai who is "proficient" in Mandarin. The other is a native Southern Californian who owns a business that "supplies products and materials to the global construction industry from China," and claims to have worked as an "equity analyst with a Los Angeles-based investment boutique" without naming the firm or the period of time he worked there or the position he held. The latter team member is also "fluent in spoken and written Indonesian." When this team visited the Company's facility in Baoding they offered to write a paid-for research report on Orient Paper, but the Company declined their offer. For balance, here is the original hit piece: http://chinesecompanyanalyst.files.wordpress.com/2010/06/muddywatersresearch_onp_june-2010.pdf >:(

;D Ha!

From Oct 1/1985 to May 31/2005 (Audited results 1985-2004 and 5 unaudited months in 2005) Ursus Partners compound annual growth rate was 2.1%. This result is reported; 1) before fees and expenses, 2) includes reinvestment of dividends. Over the same period, the S&P 500 was 12.7%. The fee structure at the time was a 1% management fee, 20% incentive fee over a high water mark, no hurdle rate. So, net of fees, the 20 year return would have been easily outperformed by a simple GIC. I don't have any data what's transpired from May 2005 to date. ________________________ Perhaps the horrendous 20 year result is why Jim resorted to those "Fairfax is a zero" comments. <IV

RBC Analyst Paul Quinn issued a comment on Friday: https://rbcnew.bluematrix.com/sellside/EmailDocViewer?encrypt=f1d4803d-b219-4fe2-a5bc-82147f58202a&mime=pdf&co=rbcnew&id=replaceme@bluematrix.com&source=mail

Gonna remove that until I can verify it further.

James West: The Midas Letter comments. http://www.midasletter.com/index.php/muddy-waters-sino-forest-tsx-tre-nyse-onp-110609/

Surprise, Surprise. ::)

Well, before this gets into a he said/she said I'll offer up to take the high road. Let it be noted, however, that my opinion is that these guys are a bunch of racketeering hacks and I believe that as time passes the facts will develop in Sino's favor. Off to do better things. Perhaps I'll check back in time and see how "off base" my opinion was. <IV