China Growth Stocks

[ratobranco]

CCCL - "I think sometimes you need to take a back seat on your negativity."

Why? My CGS negativity has been spot on. Though you've made some excellent calls in this run (some of the best on the board), you're CGS positivity over the last few months prior to the implosion was way off.

So don't call me out for being negative on a name. None of the names I've been negative on have proven themselves to be anything worthwhile, at least not until this point. Plenty have imploded.

"Investigators on the ground of CCCL have verified their factory capacity, have seen the expansions being done at Hengdali -- ie: Money is being used to do this --, have interviewed low-level employees, etc."

To be honest, I don't put a lot of faith in what an "investigator" claims to have found. Especially when you claim to be unable to share the details of the "investigation."

How many "investigators" claimed to have done on the ground work on CCME? Verifying busses, watching advertisements, making videos for us to watch, buying slot time, the whole mess. We had all that and more. In the end, none of it was a reliable indication of true cash flow.

What was reliable was economic common sense. No CEO who owned a company like CCME would ever sell it to Americans for the price that Zheng Cheng sold it. The logic pointed us straight to the truth.

I fail to see why we should abandon similar logic wrt to CCCL. Their metrics are excellent. Their balance sheet is excellent. Their cash flow is excellent. They never miss a beat. Why on earth would they sell themselves for 2 or 3 times earnings to American shareholders thousands of miles away, and then do it again. And then talk about doing it again next year. Are you kidding me?

That just doesn't happen anywhere in any country on any planet. Something more has to be in play here. At least IMO. I'm willing to acknowledge that they may be legit, that's why I say 50% fraud risk. A very reasonable number given what we know and don't know about this space.

Now, when I used that logic on CCME, you pushed back.

http://investorshub.advfn.com/boards/replies.aspx?msg=59587027

When, I used that logic on UTA, you pushed back.

http://investorshub.advfn.com/boards/replies.aspx?msg=55224958

I'm using it on CCCL, and you're pushing back. C'mon Fernando. Take the point seriously. No owner sells his company for 1/5th or 1/10th of its true value. And no owner does that more than once. The idea that CCCL wants to do yet another offering in the next year is just insane. Absolutely insane.

"Give us something a little more deep than this if your going to be vocally negative. Give us meat or simply talk about other stocks where you do have "meat" to give!"

I'm giving you meat. You just don't want to eat it.

Rampant recurring firesale dilution on the part of an allegedly healthy, highly profitable, growing company with positive cash flow is arguably the best evidence you can possibly get for fraud. You don't even need to waste money going to China to get it.

That is Filet Mignon my friend

"The fact is, if there was a 50% fraud chance, don't you think people (with on-the-ground know-how) would have shorted the stock on those odds? Shorted when it was at $9? at $8? etc...None of that ever happened."

The stock is illiquid. Very low dollar volume--it's always been that way. Shorts don't like that. They hunt for the big boys.

And to turn your logic around, if shorts are looking at CCCL, and are finding a real, legit company selling at 2 or 3 times earnings, then why is the stock trading like such crap? Ever since the Rodman offering, it's been an almost straight trek down.