ValueBuff

MSCI index rebalancing was responsible for the big volume push on all markets yesterday.

brookfield owns a large chunk as they spun it out. ANS was recapitalized by brookfield. Very cheap name, in the correct industry. This mill they are starting up will greatly increase output and lower their overall cost structure. I have own ANS for 3 months and plan to hold for a while.

I know this thread is generally for investors buying individual companies. However, I think there is a market for folks who wish to buy value oriented structured products, ETFs, Mutual funds. I think the Chou funds offer a good value compared to canadian mutual funds as there MERs are all below 2% and they do not take a performance fee. I find the mutual fund industry to moving to a mini hedge fund style of 2 and 10%, and I dont think the benefits the investor. I have looked at the Brandes lineup and they are all much more expensive in MERs, about 2.50%. The thing that bother me about brandes is that they are always invested. I disagree with this is they use a relative value basis not an absolute value. Does anyone have any opinion of good quality ETF or Funds?

Keep in mind puts have an expiration date and becomes worthless. Shorts dont work as such.

Keep in mind that Greece is not allowed to get a haircut on the IMF/ECB loans that were given to keep them afloat. Even after a 70% haircut on the public debt holdings, Greece is still over 100% GDP to debt with negative cashflow and a contracting economy. This is step #1, but doesnt really help yet.

I think the above is well said. Nobody would add a full (new) position of TRE here (imo anyway)

then it is correct logic as I said 0.

your correct as cap gains/losses are 50% discounted, so its 20 something %...but its an off-the-cuff calculation.

I also picked up some shares today in the low 4's$. the way I see this one is this. Worse case scenerio is TRE is a $0. I offset the loss with some other cap gains and I only loose half what I put down. If Sino is correct here, I will have a clear picture of this company and what they do...plus (over time) it will go back up to 26$+. 600% + upside.

One thing that has always bothered me about the MW report is their use of all the offshore accounts and holdco's as a negative. I think every single international business runs with a similar set up as a part of business operations. This allows the company to segragate risk on different assets, without ruining other company assets. Look at barrick gold. They have barrick gold corp. which is a parent company and trades on the TSX. They own barrick canada, barrick USA, barrick Africa, barrick south america. Then they go further for developmental companies and regional mining. Such as homestead mining in nevada. Homestead is owned 100% by barrick, but has 1 development mine in it. This way if something goes wrong, barrick isnt fully liable for it. It just makes sense. All these sub comapnies listed by MW for Sino, could easily be justified. Each differnt county that they have lumber/trees in should have its own incorp. to protect the parent company from risks. I would be shocked if they didnt have that setup. To me, that isnt not a negative....it is proper planning of a corporate structure being used against them.

I think a lot of this gets settled after their earnings on June 14th. The company and execs are in a blackout period currently with earnings coming up. If at earning they anncounce a share buyback, and then execs start to purchase share as well...I can't see this things staying this low for much time. IMO, we would doulbe up and float in the teens until TRE can prove MW's allegations. alternatively, if they cannot prove MW wrong, we have a Zero. This is basically a call option with no expiration, from current prices you have basically 0 or 5x return

I think you guys misunderstood my position. I held the shares for about 45 minutes. I got a fast 15% on the morning bump as was out. hence, then shares "paid for my weekend". I didn't have a position prior to this report. I am interested in the rhetoric here, but I will wait for more details prior to going long and strong with a meaningfull position. The company is in a blackout period around earnings currently. If the company states earning and annouces a major share buyback, then that would be one of the things I am looking for. Someone else pointed out that they do not need to raise money, so having that cash offers them flexibility to capture benefit for the stock price movement...if the report is bogus. I would not write off TRE here...based only on the report, as I think many people are. These guys are as sketchy to me, as are the claims they making about TRE. That is my point. Going into the weekend, I hold no shares and am very interested in how this develops. The million dollar question is...how much wood could a woodchuck chuck if its Sino forest wood? as an aside...the TRE 2017 bonds have a YTM of around 9-10% per. The bond market is giving them a better chance to survive than Greece lol ;D

I am showing CCME has 34 mill shares O/S. How liquid can that be?

so everybody can see it. FOR IMMEDIATE RELEASE SINO-FOREST COMMENTS ON SHARE PRICE DECLINE TORONTO, CANADA, June 3, 2011 – Sino-Forest Corporation (TSX: TRE) (“Sino-Forest” or the “Company”), a leading commercial forest plantation operator in China, today commented on the share price decline on June 2, 2011 as a result of the allegations made in a ‘report’ issued on a website by a short seller operating under the name Muddy Waters, LLC. The Company was not contacted by Muddy Waters for comment ahead of publication of its report. The Board of Directors and management of Sino-Forest wish to state clearly that there is no material change in its business or inaccuracy contained in its corporate reports and filings that needs to be brought to the attention of the market. Further we recommend shareholders take extreme caution in responding to the Muddy Waters report. As indicated in the report, Muddy Waters has a short position in the Company’s shares and therefore stands to realize significant gains from a share price decline that it precipitated. Muddy Waters expressly admits that it makes no representation as to the accuracy, timeliness, or completeness of any information contained in its report. Further, its website discloses no address or ownership information, nor the credentials of any of the authors of the ‘report’. Neither the Ontario Securities Commission nor the Securities Exchange Commission website lists Muddy Waters or its author as being registered as an advisor. Nevertheless, due to the substantial impact that the report has had on the prices of the Company’s securities and the reputation of the Company, the Board has appointed an independent committee consisting of three of the Company’s independent directors, William Ardell (Chair), James Bowland and James Hyde. All three of these directors are financially qualified professionals and two of the three are recent appointees to the Board. The independent committee’s mandate is to thoroughly examine and review the allegations contained in Muddy Waters’ report, and report back to the Board. The independent special committee has appointed Osler Hoskin & Harcourt LLP as independent legal counsel and will retain the services of an independent accounting firm and such other independent advisors as it deems necessary to assist with its examination. During the course of the independent committee’s examination, the Company will provide any updates as appropriate. Following conclusion of the report, the key findings of the independent special committee will be released to shareholders. Allen Chan, Chairman and CEO of Sino-Forest commented: “We are committed to a high level of corporate governance and stand by the integrity of our company, our 16-year operational track record and our financial statements. Our company has continuously retained the services of internationally recognized law firms, auditors and expert consultants from Canada, the US, Hong Kong and mainland China.” “It is important that our independent committee thoroughly address Muddy Waters’ allegations, and they will have my full support and those of the management team in doing so. However, let me say clearly that the allegations contained in this report are inaccurate and unfounded. Muddy Waters’ shock-jock approach is transparently self-interested and we look forward to providing our investors and other stakeholders with additional information to rebut these allegations.” David Horsley, Senior Vice President and CFO of Sino-Forest commented: “I am confident that the independent committee’s examination will find these allegations to be demonstrably wrong, as for example: Page 2 of 2 (a) Muddy Waters fundamentally misunderstands and misrepresents the most basic items in our published Management’s Discussion & Analysis with respect to revenue generated from Yunnan Province, which we report as being approximately 45.5% of the Company’s standing timber revenue of approximately US$508 million. Muddy Waters alleges that it is impossible that such revenue existed because achieving such levels would greatly exceed allowable cutting quotas and it would be impossible to truck close to that volume in the period. However, that revenue was very clearly disclosed in our MD&A filed for Q1 and Q2 of 2010 as revenue resulting from the sale of the standing timber - there is no cutting or transport involved, as the trees were sold but not harvested and therefore are not considered part of the quota for the region until the harvesting is conducted by the buyers. (b) Muddy Waters alleges that the Company overstated the assets in Yunnan Province, based on its erroneous and narrow assumption that our only purchases in Yunnan Province consisted of purchases of 20,574 ha of plantations in Gengma. However, this allegation ignores the fact that in addition to the purchased plantations in Gengma county, we have purchased approximately 173,000 ha of plantations in approximately 25 other counties in Yunnan Province as of December 31, 2010.” As at December 31, 2010, the Company had approximately US$1.26 billion in cash, cash equivalents and short term deposits as reported in the audited consolidated balance sheet. As at March 31, 2011, the comparable amount was US$1.09 billion. The Company’s cash remains intact with the majority of it in banks in Hong Kong and offshore. As previously announced, the Company intends to file its Q1 2011 results on June 14, 2011.

The other stock may have had that marketcap, but they were extremly thin on trading. it takes a lot less cash to push around something illiquid. TRE has been around for 15 years and is based on of Toronto, not China

I was not refering to you given2invest. plus, your getting your batting average from the batter, not the pitcher. according to their website, they have only issues 4 plus research reports? and they are giving them out for free? Same characters as the fairfax situation and you dont know who staked this company. Maybe they are legit...but maybe SAC capital funded them and their research. who knows...

Maybe I am a natural skeptic...but this seems fishy. An opaque company issues report on company after they short the heck out of it. Claims no liability for the accuracy, timing etc etc....new board members come here and post how great they are (muddy waters)...when they are also members of the muddy waters forum..could be just a random coincidence. short and distort is the same as pump and dump (jim cramer). time will tell who is correct. TRE paid for my weekend fun. I just wounder if this could be FFH at 80 bucks or if it is Nortel at 10.

I have seen this horse and pony show before. Build up a big short position in the company...then kill it with bad reports (a la FFH) Muddy waters might have made some calls proir, or said they did anyway. But lets be honest, they dont have a mailing address...they operate out of china, they are no registered in any SEC or OSEC as anything. They are as opaque as can be. The only thing I know about them is they took a short position prior to providing a negative report. That doesnt do me any favours. All I know is I am making a killing on the way up now, as I bought at open. The company is trading at cash value at the 4.90/5.00 mark.

I know they have expanded a lot with the reinsurance...Did prem ever mention why type of insurance they had in the far east? Does anyone see any insureres selling off today?

Nuts! as in Doughnuts!?

I think Warren generates enough float on his own. Whereas Prem is still trying to get more float. Perhaps my view is too simplistic.

You beat me to it. This is exactly what I was going to post. With the 50% payout ratio, which imo could be 10% higher even, your strike falls to 7.78$ per warrant. Keep in mind the warrant is tax deffered, whereas the dividend might be taxable as you receive it. Did you use the book value given by B of A in their last earnings? BAC has almost shed 90 Billion in marketcap since Feb '10. Bad news priced in?

What is your opinion of the Warrants vs. the common sanjeev?

Thanks BB. I didnt know that bonds were not mark-to-market

I recall that FFH has 1200$/share in invested (approx.). 75% of that money is in various types of bonds. They way yields have come in, that should give FFH some impressive mark to market gains. To compare, the US 10 year has fallen about 15% in the second quarter. If they dont hold them, they will report large EPS as the earnings go though the revenue from the disposal. I assume the equity gains are hedged out so it is a wash; and if they took home ~4% on the bonds ( i think this is conservative) on 900$ invested per share. That would equate to 36$ per share in gains off the bond portfolio. Underwriting is always a guess for me, so I will call it a wash too. I know some people follow this a lot closer than I. What are your thoughts?