given2invest Posted March 15, 2011 Share Posted March 15, 2011 what do you guys think about buying calls on this afterwards? I mean, they should be super cheap. They might go out a business, or they'll bring in someone who can turn it around. Just because it's fraudulent, doesn't the company is worth $0. :( why's that? it's certainly speculative, but it's still asymmetrical. if the market misprices risk, it could pay off, especially with leaps. BECAUSE ITS A COMPLETE FRAUD!!!!! THERE IS NO LEVEL THAT IT WOULD BE A BUY AT!!!!!!!!! There is no real underlying business, no real profits! And the fact that you could suggest wanting to buy leaps after all of this, at any level, makes me sad as a result. I try to look for potential value. just because something looks bad, doesn't mean it's a bad investment if you get it cheap enough. Even the muddy waters guys say it's worth around $3.50 or so even in the case of fraud. http://www.muddywatersresearch.com/research/ccme/irrefutable-evidence/ He said it's worth $3.50 a share IF THE CASH IS IN THE BANK. Ok, I'm done having this conversation with you. Yes, you should leaps and calls when it opens as long as its under $3. Good chance activist shareholder comes in and throws out board and management and turns it around and it spews 10s of millions in real cash flow in the future. Link to comment Share on other sites More sharing options...
Guest Posted March 15, 2011 Share Posted March 15, 2011 what do you guys think about buying calls on this afterwards? I mean, they should be super cheap. They might go out a business, or they'll bring in someone who can turn it around. Just because it's fraudulent, doesn't the company is worth $0. :( why's that? it's certainly speculative, but it's still asymmetrical. if the market misprices risk, it could pay off, especially with leaps. BECAUSE ITS A COMPLETE FRAUD!!!!! THERE IS NO LEVEL THAT IT WOULD BE A BUY AT!!!!!!!!! There is no real underlying business, no real profits! And the fact that you could suggest wanting to buy leaps after all of this, at any level, makes me sad as a result. I try to look for potential value. just because something looks bad, doesn't mean it's a bad investment if you get it cheap enough. Even the muddy waters guys say it's worth around $3.50 or so even in the case of fraud. http://www.muddywatersresearch.com/research/ccme/irrefutable-evidence/ He said it's worth $3.50 a share IF THE CASH IS IN THE BANK. Ok, I'm done having this conversation with you. Yes, you should leaps and calls when it opens as long as its under $3. Good chance activist shareholder comes in and throws out board and management and turns it around and it spews 10s of millions in real cash flow in the future. Dude, just because I'm trying to have a conversation with you, that doesn't mean you have to flip out. I don't have a stake in this one way or the other, but I do like to have constructive discussions. If the stock opens up at a $2 and the $2.50 leaps are trading at 10 cents, it might make some sense. Granted, this is not typical "value" investing where one has a margin of safety. A ton of hedge funds make money by doing things that aren't traditional. For instance, RINO was halted and opened up at $3...over the next month or so going up to $4.50. To be fair, it's much, much lower now. Just because it's fraud, does not mean it's not a valid opportunity. Besides, I'm just trying out ideas. Like I said, I don't have a stake in it either way (or much experience with options, for that matter). Link to comment Share on other sites More sharing options...
Myth465 Posted March 15, 2011 Share Posted March 15, 2011 To his point though it is a pretty bad idea. I mean who knows whats going on or if its a real company, or if there is real cash, or what. I could see if the CEO took a few million from a company (the company was $200 million and sold off 50%, then ya lets buy leaps), but this may not even be much of a company. Link to comment Share on other sites More sharing options...
Guest Posted March 15, 2011 Share Posted March 15, 2011 Myth, thanks for your insight. I don't have as much experience as a lot of you guys. I'm glad you took the time to actually post a worthwhile response. Thanks again! :) Link to comment Share on other sites More sharing options...
given2invest Posted March 15, 2011 Share Posted March 15, 2011 Yes, I was being a dick. Sorry, I just get so angry at people who invest or consider investing in something that's so blatantly fraudulant and even after it's uncovered are even considering putting money into it. Nothing personal, it makes me sad. Didn't mean to be a dick to you. Link to comment Share on other sites More sharing options...
Myth465 Posted March 15, 2011 Share Posted March 15, 2011 Myth, thanks for your insight. I don't have as much experience as a lot of you guys. I'm glad you took the time to actually post a worthwhile response. Thanks again! :) No prob. During weeks like this I dont feel like I have much experience ;D. I find I check my stocks much less when they are going down lol. Link to comment Share on other sites More sharing options...
Guest Posted March 15, 2011 Share Posted March 15, 2011 Yes, I was being a dick. Sorry, I just get so angry at people who invest or consider investing in something that's so blatantly fraudulant and even after it's uncovered are even considering putting money into it. Nothing personal, it makes me sad. Didn't mean to be a dick to you. haha. that's cool, man. apology accepted. :) Link to comment Share on other sites More sharing options...
Ballinvarosig Investors Posted March 15, 2011 Share Posted March 15, 2011 If you get involved with this, you might as well be opening a mystery box, or buying a lottery ticket, because it's certainly not investing. Link to comment Share on other sites More sharing options...
smo001 Posted March 15, 2011 Share Posted March 15, 2011 Can't anything be a good investment at the right price? So even at $1.00/share or $0.01/share wouldn't someone be willing to purchase CCME? One mans trash is another mans treasure and no two investors will always agree. Then again isn't investing speculating to a degree? Difference being we just look for mispriced bets. Link to comment Share on other sites More sharing options...
benhacker Posted March 15, 2011 Share Posted March 15, 2011 "There are no toxic assets, only toxic prices." The problem is, in this situation, it seems hard to measure the toxicity. There are millions of ways to lose money, this one seems better than most, I'd stay away. Ben Link to comment Share on other sites More sharing options...
Myth465 Posted March 16, 2011 Share Posted March 16, 2011 Can't anything be a good investment at the right price? So even at $1.00/share or $0.01/share wouldn't someone be willing to purchase CCME? One mans trash is another mans treasure and no two investors will always agree. Then again isn't investing speculating to a degree? Difference being we just look for mispriced bets. You guys are taking great quotes and applying them to horrible situations inmo. But thats what makes a market ;D. Good luck. Link to comment Share on other sites More sharing options...
given2invest Posted March 16, 2011 Share Posted March 16, 2011 Can't anything be a good investment at the right price? So even at $1.00/share or $0.01/share wouldn't someone be willing to purchase CCME? One mans trash is another mans treasure and no two investors will always agree. Then again isn't investing speculating to a degree? Difference being we just look for mispriced bets. I'll sell you stock in the brooklyn bridge for $1. it was $10 yesterday and just fell 90%. PM me. EDIT: Should have given you more details: Outstanding shares, 1 million. It trades on a private exchange that has very poor controls, but we can call it the "Nasdaq" for short. It's .1X FCF with no debt. It fell 90% yesterday on the "rumor" that I don't really control the bridge. Complete BS. Link to comment Share on other sites More sharing options...
smo001 Posted March 16, 2011 Share Posted March 16, 2011 You guys are taking great quotes and applying them to horrible situations inmo. But thats what makes a market ;D. Good luck. Myth, Touche. I'm not touching this one as their is way to much risk but it's been an interesting story to follow. Link to comment Share on other sites More sharing options...
rranjan Posted March 16, 2011 Share Posted March 16, 2011 I'll sell you stock in the brooklyn bridge for $1. it was $10 yesterday and just fell 90%. PM me. EDIT: Should have given you more details: Outstanding shares, 1 million. It trades on a private exchange that has very poor controls, but we can call it the "Nasdaq" for short. It's .1X FCF with no debt. It fell 90% yesterday on the "rumor" that I don't really control the bridge. Complete BS. Good One ;D Stahleyp, In all seriousness, yes you can call investment as intelligent speculation. It can be termed intelligent only if you can calculate the rough odds of winning. In fantastic example provided by given2invest, you can see that the logic of anything is a buy at certain price is flawed. You do not have to estimate exactly but in this case , it seems that value of CCME is anything from zero to some random number. It is also very hard to estimate the probability of value being zero or some number. So CCME being a buy at certain price is valid only if you can put a lower limit on their valuation. In my opinion, the lower limit is zero so it is not a buy at any price. Yes, some fund might make money by speculating but here you will be putting you principle at risk without knowing your chances of winning. In my opinion, there are many better options out there so why spend time on something like this. In some other thread, I saw discussions about Bigliar holding and with that also I share the same sentiments. Why you will get into partnership with known swindlers? I will have hard time doing so even if I get paid without risking my capital. Well, different people have different opinions, which makes the market. Some people might have made money and some people will make money by partnering with various known cheaters but I think giving your money to known swindlers is not a right way to invest. Odds are against you. Not knowing the character is different but in case of Bigliar, we have 100% certified swindler, who is likely to spend his time thinking different ways to cheat fellow shareholders. I did not mean to stop you to invest anywhere as you see fit. I was only voicing my opinion. My two cents... Link to comment Share on other sites More sharing options...
Myth465 Posted March 16, 2011 Share Posted March 16, 2011 You guys are taking great quotes and applying them to horrible situations inmo. But thats what makes a market ;D. Good luck. Myth, Touche. I'm not touching this one as their is way to much risk but it's been an interesting story to follow. Well I am following as well. But you put a great quote with what I believe is a crappy investment. Trash is sometimes trash, this isnt the eye of the beholder type of thing. That is just an ugly girl. It happens from time to time. Based on your quote you disagree, otherwise why put the quote :D. I am like thats an ugly girl, and you are like there are no ugly girls, and I am like man thats just an ugly girl. Link to comment Share on other sites More sharing options...
smo001 Posted March 16, 2011 Share Posted March 16, 2011 I am like thats an ugly girl, and you are like there are no ugly girls, and I am like man thats just an ugly girl. Haha lol I guess my point is if CCME were to open tomorrow and start trading at a few pennies per share and the information available stayed the same, I'm sure there would be some people who would be willing to put 0.001% of their portfolio in it. The loss wouldn't be a huge impact to the portfolio and the potential upside could be huge. Agreed it's still an ugly girl. But that ugly girl may have a rich father who can afford botox. Link to comment Share on other sites More sharing options...
given2invest Posted March 16, 2011 Share Posted March 16, 2011 I am like thats an ugly girl, and you are like there are no ugly girls, and I am like man thats just an ugly girl. Haha lol I guess my point is if CCME were to open tomorrow and start trading at a few pennies per share and the information available stayed the same, I'm sure there would be some people who would be willing to put 0.001% of their portfolio in it. The loss wouldn't be a huge impact to the portfolio and the potential upside could be huge. Agreed it's still an ugly girl. But that ugly girl may have a rich father who can afford botox. Breaking news: Prices in the Brooklyn Bridge just fell to 5 cents a share, down from $1. I have 1 Million shares for sale, PM me. Link to comment Share on other sites More sharing options...
Myth465 Posted March 17, 2011 Share Posted March 17, 2011 Agreed it's still an ugly girl. But that ugly girl may have a rich father who can afford botox. A man should marry up. Didnt Buffett say that as well. Nothing sadder then a rich man with an ugly girl. Link to comment Share on other sites More sharing options...
smo001 Posted March 17, 2011 Share Posted March 17, 2011 Whoa. Who said anything about marriage? I just wanted a new car. ;D Link to comment Share on other sites More sharing options...
nodnub Posted March 18, 2011 Share Posted March 18, 2011 Not directly related, but I think it's relevant. http://www.cnbc.com/id/37759560/Now_Hiring_Fake_Executives_in_China_No_Experience_Required If fake execs don't have to do much work maybe a person could hold down 3 or 4 such positions at a time and earn the corresponding multiple in salary:) Link to comment Share on other sites More sharing options...
claphands22 Posted March 18, 2011 Share Posted March 18, 2011 Not directly related, but I think it's relevant. http://www.cnbc.com/id/37759560/Now_Hiring_Fake_Executives_in_China_No_Experience_Required If fake execs don't have to do much work maybe a person could hold down 3 or 4 such positions at a time and earn the corresponding multiple in salary:) When I was investigating these microcaps, it irked me they always had a token foreigner on the board of directors. The foreigner would get paid something like 30K a year and I'm sure he never actually went to the board meeting because of the language/geographic barrier. I actually tried to get in contact with one of these foreigner-directors but it was impossible. Even when I talked to an IR firm who said he knew the director, the IR guy wouldn't give me any contact information and got really upset with me when I tried to pursue it further. It was a nutty experience. When I first came upon these microcaps I thought having a basket of these securities would be the best bet, analogous to what Buffett did with Korean stocks. Yet, as time went by and I got better at finding discrepancies in financial statements, noticing misdirection of management and generally getting a better "feel" for these companies, I realized the law of large numbers wasn't going to help me mitigate scams in these chinese small caps. It wasn't the individual companies that were corrupt per se, but the system itself of the chinese RTO space. Even non-chinese RTOs like DJSP turned out to be bad apples. I wasn't smart enough to bypass all these chinese microcaps, but I was lucky enough to learn my mistakes early on to watch the overall decline the chinese microcap sector as I was walking way. Overall I made money on these companies but it was purely dumb luck. There probably are a few legit chinese microcaps but it's like searching for gold in a field littered with land mines. CCME is like the Berlin wall for these chinese small caps. I think smart speculators were probably buying puts on other RTO listed chinese small caps as the wall was crumbling down. Link to comment Share on other sites More sharing options...
smo001 Posted April 1, 2011 Share Posted April 1, 2011 Humble pie tastes like crap. Need have my head examined. Cheers! Link to comment Share on other sites More sharing options...
Myth465 Posted April 1, 2011 Share Posted April 1, 2011 Just in time http://www.gurufocus.com/news.php?id=127799 Link to comment Share on other sites More sharing options...
ericd1 Posted April 8, 2011 Share Posted April 8, 2011 Here's an interesting site on Chinese fraud... http://labemp.wordpress.com/2011/03/08/ccme-buyer-beware-the-reasons-i-never-invested/ In case you didn't see this today -- PUDA Coal - Fortunately it was a tiny position http://www.zerohedge.com/article/latest-alleged-chinese-fraud-puda-coal-nyse-puda-alfred-little-has-266-price-target-80-downs Link to comment Share on other sites More sharing options...
libor.plus1 Posted April 15, 2011 Share Posted April 15, 2011 As someone who has lived in China and done DD on chinese companies, this thread gives me a giant boner. It was more entertaining reading this thread from beginning to end than it was watching the last episode of Lost. Link to comment Share on other sites More sharing options...
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