ubuy2wron

Have to completely disagree; it's a terrible letter where the author contradicts himself completely. How can you say you find shorting distasteful, smug, arrogant, and parasitical, yet actually then be able to hold a short position? This position seems equally as contradictary as some of the opinions I have read on here such as a few folks suggesting that shorters should not be allowed to short a stock ahead of issuing a report on it. If we take that logic, then anyone long on a stock should be forbidden discussing it for fears that they're trying to pump it in order to get out at a higher price. What I do agree with you on is that there definitely needs to be more discloure on short position holdings. I liked the letter as well. I find that the writers hit the mark pretty closely regarding my take of the dedicated short selling community at least the more public and vocal members of the community. I suspect that all most no members on this board have a problem with investors taking a legitmate short position and profiting from it what I think most find abhorent are the atitude techniques and hyena attack pack like nature of some players. Organized Pump and dump and organized short and distort are both scourges of the capital mkts the perpetrators are often the same parties IMHO.

Thanx I just skimmed thru most recent quarterly and one annual report looking for things that seemed problematic I will parse the numbers and drive by some properties and will likely try to compare it to some of the residential reits that are out there and make a decision on that basis. I have not looked into the corporate governance issues yet but the numbers do not appear so bad to me (maybe not good enough to buy but not bad enough to short, especially considering the yield). Btw, they did buy back >4m shares in 2009 - smart move. Result is their share count has stayed flat while their revenue/share have risen >50% over 4 years. Their reported leverage ($400m debt, $400m assets, and negative equity) is scary but misleading because their porperties are held at cost less depreciation. If you take their rental income of $53m and apply a conservative 8% cap rate, you arrive at a fair value of $660m, implying a LTV ratio of 60% - not excessive for this type of business. I agree that they would hurt from a rise in interest rates but most REIT type businesses would. However, this would be alleviated by their very high proportion of fixed rate CMHC insured debt. Also, if your assumption of higher interest rates is predicated on a rise in inflation, they may have an offsetting rise in rental income (which is inflation index controlled, I believe). Anyway, their current debt service of $20m is covered by about $30m in net rental revenue. I have to say my initial impressions are that it is quite well run. Besides, the segment of the market they operate in is quite different from the million dollar housing and condo markets in Vancouver that have seen the most speculative and frothy activity. They are dealing in $100K per unit properties which rent out for perhaps half the absolute rent of the high 6 figure condos which probably yield less than 3% gross. (Using book, MEQ's portfolio's gross rental yield is about 15%!).

I believe you will have ample opportunity to purchase good companies at great prices over the next few months no blood in the streets yet and just a faint whiff of concern about the problems we have to deal with. On another thread someone commented on the fact we were half way through a lost decade as far as the economy was concerned well for investors who have not been nimble or great stock pickers its been 11 years of sideways action. I think over all the mkt is acting like a coiled spring valuations are getting more and more attractive on a long term basis I just think we have a few more bumps in the road and a few more miles to travel before we get started on the next bull mkt. An elevated VIX certainly is a pretty good indicator of short term investor concern. I took my hedges off two days ago but they will be back on shortly I am pretty certain we have more workto do on the downside. Patience is wasted on the the experienced investor too bad I did not have more of it when I was younger.

It took me lsess than 30 minutes in reading the companies filings to discover some red flags. There is a lot of leverage and the company has piled on leverage on top of leverage in a very short period of time . The board appears consist of the ceo, a relative the co. lawyer and 2 others who have no large position. Ceo received largish and growing salary bonuses usual options and co has loaned money to him to buy equity. Rising interest rates would kill this thing I think and if co is so undervaled as co states in filings why not just agrresively buy stock and sell property seems a pretty low hanging fruit. Plus ceo earns commissions on purchases co makes in addition to other compensation. I think I will take a drive out to Abbotsford to look at some of their property. They do have one shareholder who has shown up who does appear to be informed

Thanks for the idea. Does anyone know of a place where I can get a list of Vancouver/BC public bank or REIT stocks? Hester I am going to assume that you are not one of the minions of the Sith Lord since others here have vouched for you. There exists no public BC reits or banks (They all went bust in the last cycle) there are only three public companies which are direct plays on Vancouver RE which I am aware of Mainstreet is one which I am digging at now another is Madison Pacific Properties(MPC) which I was a shareholder of at one point and can vouch for the integrity of management they are VERY shrewd and scrupulously honest and have never sold a share and run an extremely lean operation do not short you will be wrong and another Wall Financial which is very tightly held and not a good canidate for any investment. From just spending 1/2 hour looking at Mainstreets filings its worth further exploration. If I could sell short the credit unions in BC I would in a heartbeat and Genworth will certainly endure some serious stress if residential real estate heads south, from the little I have scene and read it appears that the Australian mkt may provide more opportunities as the bubble appears bigger and more widespread and has perhaps more opportunity for profit. The Aussie mkt and the Vancouver mkt should pop at the same time for the same reasons, even tho they are about as far apart in the world as two countries can get . www.sedar.com is the source for company filings in Canada good luck and good hunting.

Parsad thanks very much for the tip I will start digging.

It's unbelievable to me that this coordinated group of racketeers is still in business. Why would they not be still in business, these gangsters have made a great deal of money not one has been charged with anything and the worse thing that has happened is "Wacky Patty" has written some unkind things about some of the participants. I believe that some of these Chinese RTO's were DESIGNED TO FAIL they were scams from inception and that the guys short were involved in their creation. The vicitims are anonymous as are the criminals ALL market participants however suffer from their presence .

What terms of recourse does the lender have in Vancouver compared to Florida which also has recourse financing? And Nevada which does too? I'm not suggesting that would prop their market up. I was just asking the question, b/c i don't know the answer (& don't have the time to research it this morning) and i was curious. I am intensely interested in others ideas here. The amt of downpayment required is typically a min of 10%. I can think of no way to profit. If you are unside down on your mortgage personal bancruptcy is the only way to escape your liability. Genwort is a private mortgage insurer and will suffer from a sustained down turn in home prices.

People forget MW is first and foremost a research firm, for institutional clients nonetheless. Isn't sharing their research with funds their job? If they initiate and then cover their short right before/after they release the research, then that is no good. But they haven't done this with past shorts to my knowledge and according to Block on a Bloomberg interview, they haven't covered Sino yet either. Hilarious, thanks for that. Hester birds of a feather flock and Greenberg aint hanging out with a bunch of Eagle Scouts and neither is Cohen. I think that many of these Chinese RTO's were designed to blow up, I also think you will find that some of the short players were in fact long or intimately involved in the germination of these scams. Very few here will not stand up for legitimate short sellers however short and distort is not a tool of legitimate short sellers. IF Sino is a fraud cudos to Muddy Waters and all smart enough to take a position if it is not it is likely the miscreants will never be brought to justice heck they will not even be identified.

OUCH THAT HURT

Your words reflect my thoughts entirely. There exists an asymytry in outcomes IMO if one uses Enron as an example the period from the discovery of the crime until guilty verdicts were delivered against major players was relatively short if we use the FFH example we have no official consideration of a crime even having transpired and civil remedies years away from being resolved.Stock prices its an escalator up and an elevator down fear is a more powerful emotion than greed.

Look this thing may very well be a fraud, I just finished reading the Muddy Waters report if it is not a fraud then Muddy Waters is in for a world of hurt, however if is not a fraud then some despicable people have made enormous profits already and will likely escape detection and persecution. Of the two outcomes I actualy prefer that it is Sino Forest that is the fraudulent party because there is a better chance for some justice to be served if parties have been harmed.

I agree with everything in this post and almost nothing in your earlier posts and Dr. Byrne IS an ECCENTRIC but you would have to be INSANE to ignore the implications of what he is alledging

Al I have the greatest respect for you I think you misunderstand my post. I am VERY suspicious of Muddy Waters, this looks like an orchestrated attack to me. Many Chinese companies esp ones of recent vintage ARE highly suspect I am going to go one step farther I suspect that some Chinese RTO co's of recent vintage were designed to blow up and that the same people who created them are now short

When does anyone DISCOVER the trade we ALL are tail gating. I for one have some faith in Paulson in that he certainly has likely done a fair amount of due dilligence if a position is large enough. Chinese frauds are abundunt as a matter of fact MOST hot areas of the mkt have more than their fair share of supect investments IMO. I have been on the wrong side of a Chinese fraud through a company called Noble China which was RTO in the 90's. Most of the fraud is either of the PUMP and Dump variety own the shares produce bogus financial results sell the shares to investors and hide in China where you are safe, these are the easiest to detect and the Short crowd has done a pretty good job of ferretiing these out and good for them. The investment bankers who brought these things public should be drawn and quartered IMO if IB's had to take 1/2 of their fees in shares which had to be held for 5 years perhaps these companies would never see the light of day which would be a very good thing. Risk capital is such a valuable and scarce resource it is a terrible shame that it is wasted on scams. It seems to me that only greedy Investment bankers and sharp short sellers and crooks are the only people who benefit when this crap gets on our public mkts and it pollutes the eco-system. If Sino Forest is a scam then it is a scam of a different variety it clearly is not a pump and dump, it has been around for many years . My radar is telling me this is a short and distort but all I have to go on are my spider senses.

Sorry but I suspect you are just being naive and that is being generous if you think that manipulation is not happening on a ongoing basis and no the mkts are not pure capitalism some times they are rigged and most here hate Glenn Beck, and who says Dr. Byrnes company is ruined. As far as this being an opportunity with Sino Forest or not I have NO IDEA however I do remember the attack on FFH I can remember it took a great deal of courage and conviction to buy shares in this co when the company was being attacked and that very smart long term investors had their confidence shaken with the LIES that were floated about this company. This manipulation happens on both the long and the short side of the mkt it is just the short side seems to more odious. Naked shorting should be a serious criminal offense. Securities crimes are so attractive because the victims are almost always anonymous and it is extremely difficult to achieve a conviction.

It all comes down to the quality and integrity of his research. If he's correct, there is absolutely nothing sleazy about it. Do you think it's sleazy of Whitney Tilson and T2 to put out powerpoint after powerpoint touting BRK.A and MSFT? I know folks on this board dislike short sellers from the FFH days, but who else will effectively police the frauds in the securities markets? The last couple of years of China research was very eye opening for me. I had not been to China until last year. I recommend the book "Mr. China" by Clissold as a classic for anyone thinking about investing in or doing business with China-based companies. You are of course correct short and distort is no worse than pump and dump talking your book is a tried and true method of inflluencing market prices and clearly effective or why would managers do it. Promoting worthless investments is a game that is practiced very profitably in Vancouver the city I live in and I have no dog in this fight re Sino but FFh was almost destroyed by these bandits and what they do sure looks like securities manipulation to me.

Bio tech investing and insider information. Some hedgies have made a practice of paying doctors involved in medical research for their expertise, given that this is market moving I can not perceive how this would not be considered insider info.

Warren has been a source of wonderfull quotes one of my favorites is in market down turns "when the tide goes out" one discovers who has been swimming naked. The ECB has the largest position in Greek debt but there is a lot unaccounted for and a lot of CDS has been written on various European financial instruments. Within 30 days we will discover if the can gets kicked down the road re Greece or if default is in the cards. One of the consequences of the Lehman Bros failure was the collapse of AIG, a breakdown of the Euro is pretty darn difficult to hedge so where is the risk concentrated. Discuss in 20 pages or less and hand in your papers by next week. LOL Sometimes in the money mgmt game its better to know where not to be than to try to figure out where you should have your dough invested.

Without QE1 and TARP we would have had economic consequences which would have made the world look a lot like the great depression. It was the failure of the banks and the resultant destruction of the money supply which caused the great depression the crash of 29 was not the cause of the collapse of economic activity it was what happened next. Helicopter Ben did what he said you have to do to stave of an extended depression. I believe without the policy responses we would have seen many more bank failures much higher unemployment much lower overall economic activity and the decline in security prices would have been much greater. Some of us may have in fact been wiped out even Mr Buffett's fortress company was vulnerable. I am not sure that QE2 was required and if we are going to have QE3...N then I think the hyper inflation which could result will make the future as untennable as if we did nothing and let it all come crashing down.

I have been following the good Dr. Byrnes journey down the rabbit hole with great eagerness over the years. I first purchased FFH when the assorted miscreants had pushed the price down to $100.00 and it was the purchase of FFH which lead me to this web-site and quite a few good things have followed from that. I urge all investors to take the time to read his latest series of installments and to contemplate the implications for the future of the markets if the criminal nature of these activites goes unchecked. I have to admit that at times reading this story I was depressed and even scared which I think is a natural response if the story is even 10 percent true. www.deepcapture.com

Has anyone here looked at the performance of Einhorns Greenlight Inurance as a business as opposed to the stock.

If you use a rewards card, in my opinion it's better to stick with a card that offers cash back so you can stop wasting time with all of flight restrictions or overvalued crappy rewards programs. You are of course right. But the guys who created loyalty programs are smarter than you think. In Canada there are realy only two airlines and until recently only one offered a rewards program Air Canada this rewards program was spun into a company when AC went broke a few years ago and emerged as a number of separate entities involved in Airplane services the rewards program etc. In Canada if you are business travelor it is extremely likely you are going to be using Air Canada even if you are not that happy with the carrier there are after all only two carriers, hence the rationale of collecting cash points to purchase a flight means you may end up with stranded points etc. with Air Canada there is some utility in having all of your points with one airline. The points biz is a good biz it is worth while understanding it because I think the business is going to get bigger over time Aeroplan may become the 800 lb goriila in the space and I think its a biz that Amex may want to own some day especially if the number of carriers in the US mkt place continues to decline.