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IMO QE3 is a near certainty at this point. take the lack of fiscal action, helicopter Ben, and a desperate administration and you get QE3.
you can be sure it dominates the Jackson Hole conference at the end of the month, though we'll likely get some verbal commitment before then.
Crazy as it may sound, precious metals are still cheap.
also a shopper..feel like i should be cuffed for stealing OGXPY @ 6.32. CCCL @ 3.98 and CHOP @ 3!
Gold is making a fantastic hedge today..good luck shopping for those w the stomach!
big bid near the close. level 1 showed 25k shares @ .70 vs 10k @ .74
great! i guess IB has yet to update the security classification. So are we to assume the SEC has accepted the registration documents in full?
still listed as Pink.Limited on IB..
where do you see this information?
VALV- back to levels last seen on the day of the GEO rec..i'm adding here too
EDS- GEO cautious on the name despite not finishing all DD, mentions similarities to CCME.
no shares currently available at IB..
SOKF- agreed, i put intrinsic value much higher than 4.50/share. this explains the massive bid support the shares have seen over the past year or so.
wouldn't be too pleased with this buyout if i'm a shareholder. (which i'm not, though have been in the past)
SIHI - anyone else playing for a move here? i've been accumulating under 1.20 for the past few days now..volume is picking up.
GEO- VALV alone just paid for my lifelong membership..
anxious seller and uninterested buyers only willing to sit on the bid. at these levels, even if one thinks it falls lower, it's tough to sell given the spread and liquidity, especially if you buy the long-term prospects of the company. we're under a forward p/e of 2 here.
"CNTF, YONG, and CCCL are investment grade."
I like that trio though I do not own YONG. I would add CHOP as an investment grade name, though it doesn't get much play on the board it's a solid co. buying $3M of a $10M declared buyback in a single month speaks volumes to me. and knowing they'll continue buying at these levels (paid avg $3.85/share on first $3M) only helps their case.
GLD- investors can and will go to treasuries/dollars, Yen/JGB and bunds (perhaps w a currency hedge) too. one thing credit fund managers *cannot* go to is gold. it simply violates their investment mandate and they oversee trillions.
Long-term I agree w your thesis, but short-term it's probable that all the above will rally if things get worse which makes it all the less likely gold goes "parabolic". I do strongly believe it will rally though, which is fine w me since I keep my "cash" in gold.
did Solomon cancel his shares outright or convert them to a non-voting class w/no divi? IIRC, he said they would then be converted back when there is "extraordinary income", whatever that means.
Or maybe he's done a both? Any clarification is appreciated.
relevant articles from The Economist this week:
Carson Block
Red-flag raises, The man behind Muddy Waters, a scourge of listed Chinese companies
http://www.economist.com/node/18929130?story_id=18929130
China's murky ownership rules
Who owns what? The perils of investing where the law is unclear
http://www.economist.com/node/18928526?story_id=18928526
SPRD- selloff begins at 11:18 (13.26), bottoms (short-term) at 11:48(8.59), by 12:18 it's nearly back (13.00) to where it was before the report.
Perhaps traders read the report in the hour following "news" of the hit piece?
no position.
Billion Dollar Mistake, Paulson can be added in an epilogue or sequel. Of course, he'll always have The Greatest Trade Ever to his name as well.
Lots of big names on this list..
http://thebilliondollarmistake.com/billionaires.html
agreed..and to that point, a preferable, IMO, asymmetric bet is buying long-dated out of the money puts on the US bond -- so far out of the money you don't get paid unless yields hit 7 or 8% in the next five years or so.
I believe it would offer a similar, perhaps slightly less lucrative, return profile to the yuan trade.
I recall reading about hedge fund correlations w the broader market not too long ago. Distressed funds were less than 0.1, the least correlated of the group (arbitrage and mkt neutral, the logical choices, were just behind).
I'd clearly classify this space as distressed, so I'm beginning to believe it's possible there's alpha here despite, IMO, a still overvalued broader market.
Certainly not a conviction, just the germination of a thought.
I like your style man..drop your nuts, spread your bets and let 'em ride.
I actually believe even the "zeros" have value simply because there's always an outside chance things get cleaned up, like what it appears FUQI is trying to do.
Many of these companies may have overstated assets or cash flows, but beneath the fabrication is some truth unless it's a full on facade. Even Sino-Forest has SOME assets. (hell of a bounce today BTW) Of course they also have debt so I'm not arguing the equity has value but some of these debt free "frauds" do if there's any business underneath.
Even RINO trades around 50 cents and they've gone dark. Why is that? I'd argue that price is the "loosely approximate" expected value of RINO cleaning up and resuming "real" business. (which is also the reason it's slowly trending down -- the longer they stay dark, the less likely they resurrect themselves JMO)
Anyway..nice post.
CNTF- I guess my point is that if it *isn't* a smoking gun and it still drops 20-30% that's a great entry opp, provided you're not already over-invested in the name. Maybe that's the problem.. over-leverage.
I think it's likely CNTF saw the worst of it on yesterday's freefall to 3.0x, it certainly didn't stay down there long..cuz I missed it.
CNTF- sure, though specific to CNTF the shares have already fallen nearly 50% (at one point over 50%) from their 52 week high just over a month ago and are now trading below cash.
OK, so someone writes a hit piece, it would have to be pretty damn compelling with regard to techfaith seeing that they are an IPO, not a fish-in-a-bucket RTO. (As an aside, have there been any successful hit pieces directed at an IPO? have there been any at all?)
CNTF- I remember just a little over a month ago when this board was exploding with proclamations of CNTF being the real deal and destined for double digits -- then the share price gets cut in half and all of a sudden there's got to be something coming?
This is a great testament to sentiment in the space right now. Techfaith is no different than they were a month ago, minus some, gulp, positive developments. And now, every hour on the hour we have people fretting about how the are shares down, up, sideways, retracing, floundering or whatnot and what it means with regard to shorts. Jeez, step away from the computer if all you can do is stare at a ticker! (it's actually a great tell that you're over-invested in a name)
I'm not making a case for or against CNTF here, it's just an example of how little conviction there is on the long side anymore. Though I do believe that's generally bullish..for the right names, of course.
nice list..I assume it goes
very sure > pretty sure > probably > maybe
correct?
CHOP is another name I'm very sure is legit. They've already gone through $3M of a $10M buyback program started only a month ago. Avg purchase price was ~$3.85 and the CEO said they will continue to buy at these depressed levels (closed 3.18 today). Not only is it a confidence builder, but it also fulfills a fiduciary duty to shareholders. (something absent from most management in the space) Some other things I like:
- it's a SPAC
- Harry Edelson put it together and serves on the board (http://www.geruigroup.com/Board%20of%20Directors.html)
- the new chromium plating facility coming online later this year will significantly increase margins
- only pure-play on cold-rolled steel in China
- valuation (obviously)
More about the share buyback, the warrants were struck at $5 when the shares were trading above, so there were plenty of redemptions. Now the company is using that warrant money to repurchase shares at a fat discount. I can't say it's a brilliant move because it's the obvious thing to do, but management certainly was opportunistic about executing.
CSGH- I believe it used to be a board favorite if I'm not mistaken.
that was a hoax.
CHOP - Share Repurchase Update
ZHENGZHOU, China, June 21, 2011 /PRNewswire-Asia/ -- China Gerui Advanced Materials Group Limited (NASDAQ: CHOP) (the "Company" or "China Gerui") today provided an update on its previously announced $10 million share repurchase program.
As of June 20, 2011, the Company has repurchased 780,273 ordinary shares at an average price of $3.82 per share for a total share repurchase to date of approximately $2.98 million.
Mr. Mingwang Lu, Chairman and Chief Executive Officer, stated, "We believe the repurchase of our shares represents a sound investment decision for our Company given recent trading prices. Our Board of Directors approved a share repurchase program that has been designed to comply with applicable securities laws and we commenced open market purchases of our shares in mid-May of 2011. If the price of our shares remains at or around the current market price level, we plan to continue to buy back our shares in accordance with the economic parameters of the repurchase program and subject to the legal limitations of the program, as approved by our Board."
OT- just bouncing some ideas about the Euro (and potentially global) debt crisis. Any opinions or insights are welcome.
A haircut on Greek debt is inevitable, though when is difficult to say. If the haircut does not come for sometime it would have to mean short term bills were swapped for longer term notes at par. Of course, it's just rearranging the deck chairs on the Titanic. Yet that still may trigger a credit event as judged by rating agencies and would (currently) preclude the ECB from accepting Greek paper as collateral. (I could see them bending the rules here in which case I imagine the Euro takes it on the chin)
Historically financial events come to a head when politics collide, (i.e. the tarp signing in 2008) such as if the Greek government were to fracture and refuse the austerity measures required by emergency lenders or if EU members cannot agree to conditions of a longer term bailout strategy. Merkel was twisted into laying off her insistence that private debt holders share the pain, but this is certainly not the last of the issue.
The EU meets this week and will undoubtedly spend much time discussing the matter. To simplify I see two scenarios:
1) they agree to a monetary injection to carry Greece through the summer, perhaps even w/o the austerity measures originally desired in place. I think it's wasted money as it is a clear kick the can down the road strategy, even worse if Greece cannot push austerity measures through. Bond yields continue to climb
2) no agreement, either due to Greece not able (or wanting) to make needed reforms (public strongly opposes) or members not reaching agreement on terms or lack of participation from private bondholders (I don't know what makes them think anyone will act altruistically considering the last 6000 years of history says otherwise) Default could be ugly if they don't pay on maturing bonds, though an even haircut across the board may be more organized, either way concerns spread to Spain and others too big to save..credit markets at risk.
Of course there are variants I haven't mentioned, but ultimately it's kick the can by mutual agreement or uncontrolled pain by lack of coordination. And option 1 eventually leads to option 2 anyway. I don't think we get out of this without some real pain.
Any thoughts on this. I know it's not China related, but consider it a beta discussion, something we are also clearly exposed to.
I'm short US banks on the thesis of contagion risk.
here's a great discussion of the finer points:
http://www.economist.com/node/18836230?story_id=18836230
Neither is John Paulson..
http://www.bloomberg.com/video/70526246/
apologies if this has already been mentioned, didn't see it on the board..
did anyone else snatch some in the .80s?? I got a few but it was tough getting fills down there, reminiscent of the flash crash..
I, too, will miss your insightful writing Strindberg. I wish you would reconsider and wish you the best regardless.
snow, there is no such thing as private land in China, all land is leased from the govt.
Is some of this land not to be used for fisheries as well? If they are serious about building out in scale do they not need land to accomplish this too?
If indeed you are correct in asserting the land purchased is expensive is this not also good reason for rebates and grants? I don't imagine the govt is in the business of handing out money to what is already a favorable transaction for the recipient. If arable land were so easy to purchase and cultivate why would the industry be singled out by the govt as a security concern?
Perhaps land can be purchased cheaper elsewhere but transport and irrigation are also primary concerns with regard to ag land as well. Either way, it would be nice to quantify the discussion with more data.
snow, I appreciate the balance you bring to the discussion. I understand you claim the land purchase was expensive relative to other countries but do you have any comparable land value data for China?
I don't think volume in HK would be problematic though there would certainly be an issue for foreign shareholders.
For example, in the US tax exempt accts such as IRAs are unable to hold foreign currencies (and hence shares) as it requires margin privileges to do so and that is disallowed in such accts. Not to mention few retail brokers allow foreign holdings even in taxable accts w margin.
My best guess would be a primary listing in HK through an IPO w ADRs issued on the big board or NASDAQ in the US, which would nullify said concerns.
another good example is Loews Corp (NYSE:L) which is a holding company for a number of subsidiaries such as CNA Financial(which is 90% owned) and Diamond Offshore (50.4% owned) among others. You can purchase shares in individual subsidiaries instead of the holding co if you like, but all Loews subsidiaries are majority owned and consolidated on their financial statements minus the minority interest that has been floated.
SIAF actually does this already with some operations, though the minority interest is just privately held.
Despite each of these subsidiaries (CNA, DO, etc) having their own executive management, the Tisch family chairs the holding co, and by extension runs the show from 50,000 ft. Solomon would be in a similar position with these prospective spin-offs (I would most certainly presume)
One of a few reasons this is done (and there can be many) is to "unlock" value. Often, when a company is trading for less than its sum of parts this can be advantageous to shareholders in the holding co.
well I certainly can't speak to Solomon's personal desires, but drawing from the mosaic of decisions he has made and plans he has articulated, it appears he doesn't want to just play with the big boys..he'd like to be a big boy.
The sale of the dairy division underscores this point. He sold because of capped market share growth and poor long-term health of the industry. In exchange he chose to delay near-term profits for material growth potential downstream. So that says to me he's got a PLAN.
Whether SIAF becomes a household name is somewhat moot. Have you ever heard of VF corp? Most Americans haven't, (those that have are usually investors) yet most of them own at least one of their brands http://www.vfc.com/brands
My point is that Solomon has chosen to concentrate his business in areas he believes he can grow and gain market share for years to come. Whether SIAF is ever known to Mr & Mrs Cheng isn't important, what's important is they are buying his products.
Some people are born architects, eager to build something that lasts and brings great pride. In the process, they generally gain personal acclaim and fortune. If I had to guess, this is the category in which Solomon belongs.
regarding a dual listing in Sweden, it's no different than foreign listings in the US (as many mining cos in Canada are listed here, i.e. Semafo listed on TSX as SMF and SEMFF on the pinks here, nestle is another example..countless others)
Presumably spinning off any divisions would include SIAF keeping a majority holding in the spinoffs, so they may float 25% of the fisheries and keep a controlling stake to raise cash and in turn collect a premium on the ultimate holding co's shares as investors will consolidate the market value of the spinoff into SIAF's shares. Despite the accounting technicalities, look at it this way; if a portion of the business can be spun off at a valuation premium to the holding company, it is net accrediative.
if they spin the divisions off entirely and retained nothing under the holding co, then holders of SIAF shares would receive shares in the spinoff (or the cash value of the shares, this is something you'd likely need to handle w your broker)
hope this helps. perhaps others on the board can add more (or correct me)
agreed on those points, I'm simply stating why it sold off. People hear what they want and those selling heard "dilution".
I'm referring to uplisting *from* the OTCBB to a major exchange. For practical purposes I consider the uplist *to* the OTCBB complete as all paperwork has been filed by SIAF.