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Block's Conduct Smells Fishy To Me!


Parsad
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As I said before, I have no idea if TRE is a fraud or not, but there are a number of things that have occurred that strike me as particularly fishy. 

 

- The way the report was marketed to hedge fund before going public

- The particular miscreants involved in some aspect or another (Herb Greenberg & John Hempton)

- The tone of the report...much of it was assumptions about what the value of the assets would be if a trustee liquidated TRE after being found to be a fraud

 

I'm waiting to see exactly which hedge funds were on the bandwagon.  I would bet my life that we would be quite familiar with some of the names and personalities.  Cheers!

 

http://www.bloomberg.com/news/2011-06-07/muddy-waters-pre-marketed-sino-forest-report-to-hedge-funds-dundee-says.html

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- The particular miscreants involved in some aspect or another (Herb Greenberg & John Hempton)

 

http://www.bloomberg.com/news/2011-06-07/muddy-waters-pre-marketed-sino-forest-report-to-hedge-funds-dundee-says.html

 

Could someone enlighten me on what makes Hempton such a miscreant?  I don't want to go too far OT, but this is about the fifth or sixth thread here where I've seen him referred to like this.

 

Thanks in advance.

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Hempton was the analyst working for Platinum Asset Management in Sydney, Australia, that originally initiated much of the accounting stories around Fairfax.  He contacted numerous people, including shareholders of Fairfax, telling them to sell their shares in the company.  He was also showing up on message boards under aliases, including the old MSN BRK Message Board, and telling us about things that suddenly showed up the next day or week in articles, reports, etc.  

 

Hempton was also talking to John Gwynn, the Morgan Keegan analyst who wrote many negative reports on Fairfax, including the notorious $4B under-reserved calculation that was subsequently retracted.  Gwynn was fired from Morgan Keegan after it was found he released his report early to Kynikos Associates and SAC Capital.  

 

Hempton was also one of the sources in articles regarding Fairfax that were written by Peter Eavis, Herb Greenberg and Fabrice Taylor.  Deepcapture also covers John Hempton in a couple of their articles.  You can find them on their website.  Cheers!

 

http://www.deepcapture.com/introducing-john-hempton-the-plunderer-from-down-under/ 

 

http://www.deepcapture.com/the-word-on-thestreetcom/

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Guest Hester

I don't want to blaspheme too much, being a new guy on the board...

 

But Parsad, how do you reconcile the fact that the amount of frauds Hempton, and especially Greenberg, have reported on or taken negative stances on out number the amount of legitimate companies they mistakenly thought were frauds by a large factor? I just don't get how saying Hempton/Greenberg are involved lessons the likelihood of fraud. If they've uncovered more fraud than they've been wrong on, then if they're involved the odds of fraud go up right? Isn't that just basic math? There is 30 correct frauds for every Fairfax in Greenberg's career.

 

Wouldn't the fact that their fraud batting average is well over .500% make the odds that Sino is a fraud higher?

 

 

Hempton was the analyst working for Platinum Asset Management in Sydney, Australia, that originally initiated much of the accounting stories around Fairfax.  He contacted numerous people, including shareholders of Fairfax, telling them to sell their shares in the company.  He was also showing up on message boards under aliases, including the old MSN BRK Message Board, and telling us about things that suddenly showed up the next day or week in articles, reports, etc.  

 

Hempton was also talking to John Gwynn, the Morgan Keegan analyst who wrote many negative reports on Fairfax, including the notorious $4B under-reserved calculation that was subsequently retracted.  Gwynn was fired from Morgan Keegan after it was found he released his report early to Kynikos Associates and SAC Capital.  

 

Hempton was also one of the sources in articles regarding Fairfax that were written by Peter Eavis, Herb Greenberg and Fabrice Taylor.  Deepcapture also covers John Hempton in a couple of their articles.  You can find them on their website.  Cheers!

 

http://www.deepcapture.com/introducing-john-hempton-the-plunderer-from-down-under/ 

 

http://www.deepcapture.com/the-word-on-thestreetcom/

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But Parsad, how do you reconcile the fact that the amount of frauds Hempton, and especially Greenberg, have reported on or taken negative stances on out number the amount of legitimate companies they mistakenly thought were frauds by a large factor? I just don't get how saying Hempton/Greenberg are involved lessons the likelihood of fraud. If they've uncovered more fraud than they've been wrong on, then if they're involved the odds of fraud go up right? Isn't that just basic math? There is 30 correct frauds for every Fairfax in Greenberg's career.

 

Wouldn't the fact that their fraud batting average is well over .500% make the odds that Sino is a fraud higher?

 

Isn't that like saying it's ok if a few innocent men receive the death penalty, since the bulk of them are guilty?

 

There are two views on Hempton, Greenberg, Chanos, Cohen et al:

 

1)  They use all their resources to uncover fraud, and they've done a good job at catching many.

 

2)  They use all their resources to coordinate short attacks and drive vulnerable companies out of business.

 

Take your pick.  I believe there were many people who were also sympathetic to Hitler when he was alive.  Time tells a different tale!  Cheers!

 

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Wouldn't the fact that their fraud batting average is well over .500% make the odds that Sino is a fraud higher?

 

Isn't that like saying it's ok if a few innocent men receive the death penalty, since the bulk of them are guilty?

 

 

No.  It's like saying that if the same process followed to correctly give the death penalty to 30 convicts also resulted in the conviction of the 31st, then chances are the 31st was correctly convicted.  All else being equal.  Nothing is said about it being "ok".

 

Anyway, thanks for the information.  I enjoy John's blog, and he has absolutely nailed some recent frauds.  I was just looking for an explanation of the "other" view of him.

 

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I think that Hempton is named in the FFH lawsuit.  He posted under an alias on this board, and the Yahoo FFH board.  He could runs rings around legitimate shareholders by questioning and querying FFHs accounting.  It was continuous and coordinated attack on FFH from fall 2003 through 2006.  There was nothing upstanding or accurate about the statements.  It was clearly designed to inflame and drive the price of FFh down. 

 

I dont see how this behaviour differs from outright fraud that companies use to pump up their own stock.  Hempton should be doing a few years of cell time, the same as Bernie Ebbers. 

 

 

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But Parsad, how do you reconcile the fact that the amount of frauds Hempton, and especially Greenberg, have reported on or taken negative stances on out number the amount of legitimate companies they mistakenly thought were frauds by a large factor? I just don't get how saying Hempton/Greenberg are involved lessons the likelihood of fraud. If they've uncovered more fraud than they've been wrong on, then if they're involved the odds of fraud go up right? Isn't that just basic math? There is 30 correct frauds for every Fairfax in Greenberg's career.

 

Wouldn't the fact that their fraud batting average is well over .500% make the odds that Sino is a fraud higher?

 

Isn't that like saying it's ok if a few innocent men receive the death penalty, since the bulk of them are guilty?

 

There are two views on Hempton, Greenberg, Chanos, Cohen et al:

 

1)  They use all their resources to uncover fraud, and they've done a good job at catching many.

 

2)  They use all their resources to coordinate short attacks and drive vulnerable companies out of business.

 

Take your pick.  I believe there were many people who were also sympathetic to Hitler when he was alive.  Time tells a different tale!  Cheers!

 

 

Wow Steve Cohen is Hitler now?  :)  Also, Godwin's Law for the win!

 

http://en.wikipedia.org/wiki/Godwin's_law

 

I hate to break it to you guys but Steve Cohen doesn't spend a whole lot of time shorting let alone trying to put companies out of business.  He operates a HUGE business with as many as 90 portfolio managers.  He probably had almost nothing to do with Overstock, Fairfax, etc. 

 

P.S.  Overstock was a great short. 

 

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Guest Hester

Isn't that like saying it's ok if a few innocent men receive the death penalty, since the bulk of them are guilty?

 

Short sellers aren't manipulating gods. They can't just put out some research and bankrupt a company over night. The company will run into problems if the research is true, but isn't that what's supposed to happen? If this logic were true in the stock market, then nobody would ever publish any research publicly. Someone gets a case wrong and that means they are wrong for the rest of there lives? I guess Dexter Shoes makes Buffett a terrible investor. I'm assuming your batting average is perfect.

 

There are two views on Hempton, Greenberg, Chanos, Cohen et al:

 

1)  They use all their resources to uncover fraud, and they've done a good job at catching many.

 

2)  They use all their resources to coordinate short attacks and drive vulnerable companies out of business.

 

I don't know how anybody could think that 2 was exclusively true. So was CCME a vulnerable company driven out of business? How about RINO? How about LFT? How about Enron?

 

C'mon, how many vulnerable companies were driven out of business by short sellers? Really. Name one. And don't give me a crummy company that had their access to capital spiget turned off because of a short and went bankrupt. I don't want a name of a company that had problems, a short pointed them out, and then went belly up. They shouldn't of had problems, and they shouldn't have relied on the world just extending and pretending.

 

 

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Hester is correct.  Did David Einhorn cause Lehman to go bankrupt or did their poor real estate investments? 

 

The only time a short can even "cause" a bankruptcy is when they are a financial services firm/leveraged firm that needs access to capital to survive.  I, too, challenge you to find me examples of a company that has gone belly up that shouldn't have in hindsight - that's a real company, something over $500 Million in market cap at peak. 

 

Shorting is really, really, hard.  It seems kind of silly to dismiss a report based on the fact that 1 time out of 30 they got it wrong or potentially distorted their case when we know that Block has literally been 4/4 in the last 12 months on China frauds. 

 

I have no idea where TRE ends up and there are certain things about the Block report that bother me but I would not want to be on the long side there. 

 

In regards to him marketing/selling his report before he published it, so what?  If I had smoking gun evidence of a fraud of a multi billion dollar company I would absolutely want to make as much money as I could before showing the evidence to the world.  Why is that bad?  That's the industry we are in.  The way Block was going to get paid was to sell his research.  Releasing it on the internet once the sales were over is not in the least shady, nothing different than someone posting a report on seekingalpha after pumping their ideas in a newsletter the week before.  It's up to the market how they want to interpret the report. 

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I believe there were many people who were also sympathetic to Hitler when he was alive.  Time tells a different tale!  Cheers!

 

Somebody with a thicker skin might be insulted by this ridiculous straw man.

 

Could this argument not be applied to half a dozen or more spectacular Chinese blow-ups? Hempton and Greenberg were much more vigourous in the LFT "bashing."

 

Currently Longtop isn't even paying their employees. The management won't go to jail or pay fines as long as they stay in China. LFT raised $130 million in freshly issued equity to US investors in fiscal year 2010 alone. Greenberg helped shine the light on the fraud and end it. Say what you want about him, he's the good guy.

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In regards to him marketing/selling his report before he published it, so what?  If I had smoking gun evidence of a fraud of a multi billion dollar company I would absolutely want to make as much money as I could before showing the evidence to the world.   Why is that bad?   That's the industry we are in.   The way Block was going to get paid was to sell his research.   Releasing it on the internet once the sales were over is not in the least shady, nothing different than someone posting a report on seekingalpha after pumping their ideas in a newsletter the week before.   It's up to the market how they want to interpret the report. 

 

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.

 

  Also, Godwin's Law for the win!

 

http://en.wikipedia.org/wiki/Godwin's_law

 

 

Hilarious, thanks for that.

 

 

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Short sellers aren't manipulating gods. They can't just put out some research and bankrupt a company over night. The company will run into problems if the research is true, but isn't that what's supposed to happen? If this logic were true in the stock market, then nobody would ever publish any research publicly. Someone gets a case wrong and that means they are wrong for the rest of there lives? I guess Dexter Shoes makes Buffett a terrible investor. I'm assuming your batting average is perfect.

 

Did I say that all short-sellers were bad?  I listed four names that have been involved in various coordinated short attacks, not a general blanket statement of all short-sellers. 

 

C'mon, how many vulnerable companies were driven out of business by short sellers? Really. Name one. And don't give me a crummy company that had their access to capital spiget turned off because of a short and went bankrupt. I don't want a name of a company that had problems, a short pointed them out, and then went belly up. They shouldn't of had problems, and they shouldn't have relied on the world just extending and pretending.

 

The only time a short can even "cause" a bankruptcy is when they are a financial services firm/leveraged firm that needs access to capital to survive.  I, too, challenge you to find me examples of a company that has gone belly up that shouldn't have in hindsight - that's a real company, something over $500 Million in market cap at peak.

 

How about Fairfax?  When the stock was hammered to $57, where exactly where they supposed to get financing once the spigets were turned off?  Fairfax would not be around today if it wasn't for Cundill, Longleaf & Markel.  Coordinated attacks happen all the time.  Insider trading happens all the time.  How about Dendreon?  Their drug would not be around today. 

 

In regards to him marketing/selling his report before he published it, so what?  If I had smoking gun evidence of a fraud of a multi billion dollar company I would absolutely want to make as much money as I could before showing the evidence to the world.  Why is that bad?  That's the industry we are in.  The way Block was going to get paid was to sell his research.  Releasing it on the internet once the sales were over is not in the least shady, nothing different than someone posting a report on seekingalpha after pumping their ideas in a newsletter the week before.  It's up to the market how they want to interpret the report.  

 

Well, actually not true.  He has a very large short position to begin with.  He could have simply taken on institutional clients, rather than release his report early to those institutions.  Would that have not been more ethical? 

 

If he released his report early to select funds, then why did he just not say so when contacted by the reporter?  There is a certain sense of improrpriety in that behavior, and he chose not to disclose that.  No one was asking for names, just if it was true or not.  Cheers!   

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In regards to him marketing/selling his report before he published it, so what?  If I had smoking gun evidence of a fraud of a multi billion dollar company I would absolutely want to make as much money as I could before showing the evidence to the world.   Why is that bad?   That's the industry we are in.   The way Block was going to get paid was to sell his research.   Releasing it on the internet once the sales were over is not in the least shady, nothing different than someone posting a report on seekingalpha after pumping their ideas in a newsletter the week before.   It's up to the market how they want to interpret the report. 

 

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.

 

  Also, Godwin's Law for the win!

 

http://en.wikipedia.org/wiki/Godwin's_law

 

 

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.
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How about Fairfax?  When the stock was hammered to $57, where exactly where they supposed to get financing once the spigets were turned off?  Fairfax would not be around today if it wasn't for Cundill, Longleaf & Markel.  Coordinated attacks happen all the time.  Insider trading happens all the time.  How about Dendreon?  Their drug would not be around today. 

 

 

Aha!  But Fairfax didn't go bankrupt did it?  Investors stepped in and saved them because they viewed the reports as inaccurate.  That's exactly my point.

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"Aha!  But Fairfax didn't go bankrupt did it?  Investors stepped in and saved them because they viewed the reports as inaccurate.  That's exactly my point."

 

Yeah, after a lot of people lost a lot of money. Jeez sometimes it's hard to keep quiet when I see things like this. Look, you own a stock that sells for several hundred bucks a share (as much as 5 or $6oo if I remember correctly) Then you get a bunch of shady characters who decide they are going to make a lot of money by spreading flat out lies about the company and it's owner and intentionally mislead people to drive the stock down below a hundred bucks a share and you say, no big deal they didn't go bankrupt did they.

 

What about those shareholders who lost 75% or more of the value of their holdings inFFH and had to sell because of margin calls or because they just couldn't hang on any longer? What about the loss of faith that the markets had in FFH, what about the difficulties this presented them in borrowing and the extra costs associated. I could go on but there is just no way anyone can even attempt to justify those actions. To say that just because the company didn't go bankrupt doesn't mean that a lot of innocent investors didn't get hurt very badly.

 

MW's research may or may not be right on TRE, but if it is not I would bet that there are a lot of investors out there who would like to be locked in a room with Mr. Block for five minutes. In Fairfax's case the information spread about it was wrong - intentionally - and a lot of people were hurt.

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"Aha!   But Fairfax didn't go bankrupt did it?   Investors stepped in and saved them because they viewed the reports as inaccurate.   That's exactly my point."

 

Yeah, after a lot of people lost a lot of money. Jeez sometimes it's hard to keep quiet when I see things like this. Look, you own a stock that sells for several hundred bucks a share (as much as 5 or $6oo if I remember correctly) Then you get a bunch of shady characters who decide they are going to make a lot of money by spreading flat out lies about the company and it's owner and intentionally mislead people to drive the stock down below a hundred bucks a share and you say, no big deal they didn't go bankrupt did they.

 

What about those shareholders who lost 75% or more of the value of their holdings inFFH and had to sell because of margin calls or because they just couldn't hang on any longer? What about the loss of faith that the markets had in FFH, what about the difficulties this presented them in borrowing and the extra costs associated. I could go on but there is just no way anyone can even attempt to justify those actions. To say that just because the company didn't go bankrupt doesn't mean that a lot of innocent investors didn't get hurt very badly.

 

MW's research may or may not be right on TRE, but if it is not I would bet that there are a lot of investors out there who would like to be locked in a room with Mr. Block for five minutes. In Fairfax's case the information spread about it was wrong - intentionally - and a lot of people were hurt.

 

I never said that someone who puts out a fraudulent report and knowingly spreads lies in the market shouldn't be prosecuted to the fullest extent of the law.  All I have said was for every time this happens, there are a dozen situations where the short got it right and helped make the markets more efficient.  I don't know the specifics of FFH, but I do know how people on this site use incredible hyperbole when discussing shorts whether it's Steve Cohen or a seeking alpha report on EBIX. 

 

RE; the price of the stock being in the "hundreds", the price of a stock is irrelevant, that can be manipulated via reverse splits (see BH).  No reason to make a claim that because a company trades over $100 a share it's any more legitimate than one that trades at $10 a share. 

 

My main point is I would say that for every FFH there are 100 stocks that are touted fictitiously on the LONG side that costs investors even more. 

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Flame Away.

 

If no one else will say it I will  say it.

 

Step 1 - Infiltrate message boards. Become someone that noone suspects and create multiple aliases. The more influential the message board the better.

 

Step 2 - Identify a sector of the markets that is weak. Currently Chinese companies. Back in the day, Insurance companies. No one wanted to invest in insurance during the lead in to the Gulf War.

 

Step 3 - Meet with your non eagle scout hedge fund buddies and identify the company that will be taken down.

 

Step 4 - Short the pants off of it

 

Step 5 - Buy lots of puts and accumulate enough shares to avoid any potential downtick rule so that the shares plummet when the report is released with LOTS of market orders.

 

Step 6  - Have some friends in the media to loudly shout what is going on and give recognition to the perpetrators of the scam. Quote the report to maintain journalistic "integrity". - à la: "Blue Horeshoe loves Anacot Steel"

 

Step 7 - Release the report,  and release the Craken

 

THE PROBLEM WITH ALL OF THIS IS we are currently speaking to people paid to support Muddy Waters.  What is all this Hempton isn't a bad guy crap? I haven't replied in a while because I'm tired of posting and hearing nothing but the replies of henchmen paid to help pull off a fraud. Sparsad, don't try to talk to Brolga under another name, no matter how many names he has here at this time.

 

Again - flame away agents of darkness.  >:(

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"Step 1 - Infiltrate message boards. Become someone that noone suspects and create multiple aliases. The more influential the message board the better."

 

Wait, you think people on here either work, support, or are in cahoots with muddy waters?

 

:D :D :D :D :D :D

 

Sorry buddy, the 10 guys on this board with funds that manage $10 Million aren't exactly the people who are going to move markets in TRE.  The conspiracy theorists on this board are hilarious.  Can't anyone take the other side of your arguments without being evil? 

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given2invest

 

“I don't know the specifics of FFH, but I do know how people on this site use incredible hyperbole when discussing shorts whether it's Steve Cohen or a seeking alpha report on EBIX”

 

I am not being sarcastic here but you should do some research on FFH’s past history before you make a statement like that. Yes, perhaps some people here can get a bit paranoid at times, but then again, if you look at past history they have good reason. FFH is not sueing Mr Cohen and his buddies for $6B because they like to support law firms.

 

“the price of the stock being in the "hundreds", the price of a stock is irrelevant, that can be manipulated via reverse splits (see BH).  No reason to make a claim that because a company trades over $100 a share it's any more legitimate than one that trades at $10 a share.”

 

Sorry, either you missed my point or I didn’t explain myself well.

 

The share price is not irrelevant if you owned several hundred shares of  FFH at $500 a share in 1999 and after a concentrated short attack by certain individuals who FALSELY and INTENTIONALLY caused the share price to be cut in half within a few months and drove it down to below $75 a share a year or so later in their attempt to drive the company out of business.  So now you have just lost $425 on each of those several hundred shares you own. In other words you are effectively pretty well wiped out and have to get out while you still have a few dollars left. The point is that you have just lost most of your hard earned money. The fact that the company survived is small comfort to you, the individual shareholder.

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I am not being sarcastic here but you should do some research on FFH’s past history before you make a statement like that. Yes, perhaps some people here can get a bit paranoid at times, but then again, if you look at past history they have good reason. FFH is not sueing Mr Cohen and his buddies for $6B because they like to support law firms.

 

I can sue you for $6 Billion.   Let me know how much SAC ends up paying out.  

 

And people can get a little bit paranoid?  LOL.   That's the one time you should have used hyperbole.  

 

Where did I say it's ok to manipulate markets?   Where did I say that market manipulation doesn't happen?   All I am saying is the hyperbole on this website is absurd, especially when it comes to attacking short sellers, SAC, and the like.   I am in no way saying Steve Cohen is a good man or that he has not done anything illegal or immoral in his life.  I can assure you the federal government has been spending years and millions trying to nail him and thus far has gotten nowhere.   But to damn the whole firm and it's 90 portfolio managers and 600 employees because of one event seems a bit extreme to me.   Further, I think many on this board are doing themselves an extreme disservice dismissing all short reports immediately just because of who the author is or who the author is associated with.   Why not look at the content of the report and dispute it there?  

 

If I must state one more time:  I am not short ANT STOCKS WHATSOEVER, let alone a china stock.  I use SPY and IWM to hedge my portfolio.   Shorting is very difficult and I have found it to be a waste of my time and prefer to look for longs.   I do not manage money professionally anymore so I have the luxury of ignoring shorts, though professional hedge fund managers usually don't have that luxury.  

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Hmm, "Godwin's Law." I got a chuckle beyond the author's name while acknowledging how shrewd, and potentially accurate while at the same time counter intuitive it might be for players in the financial markets in order to diffuse their angst. Godwin is talking all discussions, non specific to ones where there is great risk to be suffered from great loss of capital.  

 

It is easy to see how normal conversations among people who are in disagreement at the same time "fighting to be right" might turn to one or the other with such claims of Nazism tied to Hitler accusations. Those "GODWIN" damn dictators!

 

At the same time, I would posit that the higher the stakes become in this game of "fighting to be right," with stakes equating to money, the more appropriate Hitler and Nazi analogies become.

 

Mr. Godwin might reflect on factual history where money or the lack thereof was the proximate cause for men like Hitler, along with his Nazi party to rise as well as other more barbaric leaders of present or past nations. He might not find that history so funny as his theory implies.  >:(

 

Godwin's law (also known as Godwin's Rule of Nazi Analogies or Godwin's Law of Nazi Analogies)[1][2] is a humorous observation made by Mike Godwin in 1990[2] which has become an Internet adage. It states: "As an online discussion grows longer, the probability of a comparison involving Nazis or Hitler approaches 1 (100%)."[3][2] In other words, Godwin put forth the hyperbolic observation that, given enough time, in any online discussion—regardless of topic or scope—someone inevitably criticizes some point made in the discussion by comparing it to beliefs held by Hitler and the Nazis.  

 

http://en.wikipedia.org/wiki/Godwin's_law    

 

 

cwericb, since percentage rules and there isn't a difference between a stock that goes from $500 to $50 pps(90 percent loss of hard earned capital), and a stock that goes from $10 to $1.00 pps(the same 90 percent loss of hard earned capital), I think what you are really attempting to illustrate is the great pain for owners who may have committed large portions of their worths to an investment at the higher prices to begin with in addition to their inability to recover if that may have been the case. You might attempt reading a book I found fascinating, "The Way of the Turtle," for more color on that.  

 

Ben Graham on this board attempts to teach "margin of safety" rules and principles tied to not exposing ones hard earned capital at prices which may be pointing to a perfect horizon while considering the vast amount of vagaries including illegal means that "Mr. Manipulator" might have in store for you.  

 

Speaking of legitimate shorts, have you boyz seen the debt load that Nielson(NLSN) is being handicapped with!  ;)        

 

 

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Further, I think many on this board are doing themselves an extreme disservice dismissing all short reports immediately just because of who the author is or who the author is associated with.  Why not look at the content of the report and dispute it there?

 

Two points I want to make Given2invest:

 

1)  The rules for short-selling are different than for those that are long.  Short sellers are still not required to file their short positions.  I've been screaming for this for years, and still, shorts are not required to file if they have a short position greater than 5% of a company.  Even the rules, and I probably would have no problem with even SAC or Kynikos.  At least then investors have a clear idea of everyone's interest in the success or demise of a company. 

 

2)  How is it that both Herb Greenberg and John Hempton had involvement with Block?  Of all the people in the world that could have been associated with this report and the CNBC interview, how is it that these two were the ones?  You mean there weren't any other hedge funds, journalists or institutions that would have been interested.  I think it says something about a person by who they associate with.

 

Cheers!

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Guest Hester

This discussion has taken a turn for the comical. I guess short sellers really are polorizing. Add in an emotional attachement to a past even that included some of the current story's players, and rationality flies out the door.

 

"Step 2 - Identify a sector of the markets that is weak. Currently Chinese companies. Back in the day, Insurance companies. No one wanted to invest in insurance during the lead in to the Gulf War... What is all this Hempton isn't a bad guy crap? I haven't replied in a while because I'm tired of posting and hearing nothing but the replies of henchmen paid to help pull off a fraud"

 

It's almost as if everybody on this board has been asleep during the last year. Chinese companies are a weak sector of the market? Ya think? There has been 2, billion dollar plus (at one time) market cap stocks in the last 3 months alone that have been proven to be total frauds. You think this is just an unloved beaten up sector, depressed because of the shorts? I guess many are also depressed because of the SEC, and that evil thing we call reality. Now expressing the viewpoint that perhaps Sino is another fraud in an area filled with spectacular frauds, and you must be someone who has been paid by the evil shorts? What is normally a group of rational value investors is becoming a tin foil hat wearing conspiracy theorist group.

 

I just can't wrap my head around the logic. If Sino isn't likely to be a fraud because Hempton, Greenberg, and MW are manipulating the stock, then why is their Chinese track record perfect? Boy, the human mind continues to mystify me.

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