Replies to post #23321 on Value Microcaps Free-For-All

[gilead23]

bradford

It is not hard to lie on a 10Q. You simply say what you want to say and you are fine unless the SEC comes knocking and they rarely seem to bother. The best thing you can do if you are worried is to try to look into the history of their auditor and see if they have a history of auditing scam companies. There is no way to be sure though and even if they are honest bad stuff happens out of the blue to real companies just like it does to real people.

At least for US companies you can also google about for the history of the executives. One thing I commonly do if I am uncertain is to google for the CEO's name with "SEC fraud". I have found some unsavory histories that way.

I also use zoominfo.com to get some backgrounds which is sometimes helpful.

All that said I have never trusted Chinese companies. The numbers are rarely believable by the standards we have come to expect in the US. I have traded some once in awhile but always with extreme caution and never with alot of money.

Good luck. I read through some of your seeking alpha stuff. It sounds like you are at least thinking about things reasonably which puts you ahead of about 90% of the people out there.

[john302]

Yeah I hear you. Look I wouldn't be surprised if one of your China RM stocks shoots up one day. All I'm saying is to make sure you take profits immediately, because from my experience, the PPS will plunge right back down.I've made some good money (and lost some- more often than not) in the past doing that with "undervalued" China stocks but it was really just glorified gambling, they all gave up their gains and then some after they popped. Now I just prefer to stick with real companies.

It is very easy to fake 10Q's and the whole nine. Look at what happened with BJGL and CXTI. Those are a couple good case studies of when China RM's go wrong. There was another recent one who decided to stop reporting and walk away, but the ticker slips my mind.

Even a lot of China ADR's, like NPD, have a terrible ownership structure not much different than RM's. But at least with them, the shares are sponsored by big banks and contracts are enforced by the Chinese govmt. And they frequently pay a dividend. I have never seen a China RM ever pay a dividend on its common shares, even when it is a slow growth, utility type company.