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Strategies & Market Trends : Value Investing
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To: Mr.Gogo who wrote (41590)3/3/2011 3:36:16 PM
From: Spekulatius  Read Replies (1) of 78915
 
>>This is what the poi of Madharry, that we should not tar all the companies. But it is very difficult select the good from the bad.<<

The problem is that they all have the same structure - reverse merger, no assets in the US, holding companies with no assets in tax havens, obscure auditors that may not even audit the operating subsidy itself.

It is a setup that makes it very easy to commit fraud and makes it very hard to hold the culprits responsible. this does not mean that every companies intends to commit fraud but you have to wonder why they choose such a setup if they do not intend to take advantage of it <ng>.

Also, be careful about companies that say one thing and do another. GFRE - they said they buy back stock (back in 9/2010) but i see no evidence they did. They said they would have their procedures audited back in 9/2010 but i see no evidence that this actually happens (mind you auditing procedures is a whole lot easier than auditing a balance sheet).

Investing in the industrial revolution in China makes a lot of sense, it just think that these reverse merger companies are a flawed way to do so. I believe we should be looking into buying stocks in Hongkong (a fairly transparent market, imo) rather than the population of reverse mergers that came to the world with inherent birth defects.
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