Thanks for posting that...that pretty much covers everything that I could possibly do to make sure that they aren't a scam. That is all the stuff I should do BEFORE I invest so that I can be reasonably sure that it's not a scam. ALSO, if I will do all that before I buy, then I can be sure that my company is pretty much basher proof. This, IMVHO, is one of the big reasons that not only did HISC go 100 bags...but several investors made the entire journey.
But, that stuff is going to take a lot of time, so there are other things to consider first. And, as you have stressed to me often, the first and foremost being capital structure(share structure).
So, I have a new rule of thumb....I only invest in companies that I can get the share structure from the the TA and/or reports on pinksheets.com. This rule seems self-evident, but I was shocked to find out how many of our common flamingo's just don't pass the test. Somehow or another a lot of our favorites have got us to "buy the promise" so deeply that we have thrown common sense out the window. To me, investing in a stock that doesn't disclose their capital structure is the equivalent of entering into a partnership in a business in which my partner would not show me the financial details. Could you imagine giving someone $1000.00 to start a business and they would not show you the savings account, checking account, and the credit report(debt)? Or, they would only show you one aspect like checking account only? IMVHO, all there MUST be seen in order to ascertain the current health of operations. Here's how I look at each one:
Authorized Shares(A/S) - this the the "savings account".
Outstanding Shares(O/S) - this is the "checking account".
Restricted Shares - this is the "debt".
If I can't see all three then forgot it! I'm not gonna give you my $1000.00. Fair is fair. Not to mention it's a total waste of time, because I know that if the SS isn't transparent, then the bashers can sing "the dilution song" all the day long.
Am I wrong about this? Please, bring on the debate.
So, here are the combinations that I would consider "transparent".
A. * Filing Reports on pinksheets.com that have the SS numbers
**** Have IR guy that will release the numbers when called
**** TA with policy not to release SS on ANY company
B. * Filing Reports on pinksheets.com that have the SS numbers
**** Have IR guy that will release the numbers when called
**** TA releases ALL data - A/S, O/S, Restricted(or float)
C. * Filing reports on pinksheets.com
**** No IR guy
**** TA releases ALL data - A/S, O/S, Restricted(or float)
D. * No Reports
**** No IR Guy
**** TA releases ALL data - A/S, O/S, Restricted(or float)
Now we have a real debatable point. HISC had scenario A. But, perhaps B. is better(but then again maybe not because managements every move is going to be magnified).
IMVHO, I throw out all flamingo's that have TA's that are "gagged" or only releases partial data(Ex. O/S only) in any combination. Why? Because they are saying that they DEFINITELY have something to hide. I don't need that kind of food for the bashers.
So, here are the points in debate.
1. Does transparency matter?
2. Which scenario is better(A,B,C,or D)?
3. What about entirely gagged or partially gagged TA's?
These are tough questions and I know they can run deep(I still own several stocks that don't pass the test)...but I want to find something better....will you help?
GodBless-NoDoubt
cris
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