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Re: nathanial post# 10250

Thursday, 04/01/2021 8:07:05 PM

Thursday, April 01, 2021 8:07:05 PM

Post# of 10657
11/10/2016 Motley Fool Recommends YSYB!
Revoked 6/7/2019. SURPRISINGLY INTERESTING! ——————————————QUOTE: China's tiny Yanglin Soybean, for example, is actually down since March 9, and it now trades for a paltry 0.2 times revenue. And while the company has struggled to make money because it does not hedge soybean prices at present, this is a company that pays no taxes to the Chinese government, since it's been classified as a Key Leading Enterprise in Agriculture and is helping that country achieve its strategic goal of becoming food-independent.

But if you look up Yanglin Soybean, you may be scared off. It trades over the counter, the stock is illiquid, and the board has no independent directors. There's no way to be sure that the company cares a lick for outside shareholders.

It's time to take off the training wheels
These are legitimate concerns. But I've already tried to assuage them. So today I point you to Baupost Group's Seth Klarman's 1997 letter to shareholders:

I frequently hear the argument that the rules are different overseas: the accounting murky, the annual reports unreadable, the currencies sometimes unhedgable. All of these points are fair, but, rather than being arguments to avoid foreign markets, they are instead arguments to embrace them. After all, as an investor you never have perfect information, and the biggest profits are always available (just as they have been in the U.S.) when competition and information are scarce. The payoff to fundamental analysis rises proportionately with the difficulty of performing it.

Yes, I added that emphasis, because it's such a key point. Klarman goes on to say that the highest return -- the real money -- is made in markets where information is scarce and management teams are not yet obviously shareholder-oriented. It's time to take off the training wheels.

Tim Hanson
Updated: Nov 10, 2016 at 5:25PM
Published: Oct 16, 2009 at 12:00AM END QUOTE.

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