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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Madharry who wrote (41564)	3/2/2011 12:13:35 PM
From: Mr.Gogo	Read Replies (1) \| Respond to of 78751

Madharry, If you consider this value investing you should look into CCME. It looks great on paper but is there value behind the paper??? Just got the next report from Muddy waters... Georgi March 2, 2011 CCME: Irrefutable Evidence of Fraud Muddy Waters, LLC has amassed irrefutable evidence that China MediaExpress Holdings, Inc. (“CCME”) is a substantial fraud, and that management is engaging in a cover-up replete with further dissemination of fraudulent information. In light of the nature of the evidence, we believe that a de-listing from NASDAQ is not improbable; further, we believe that management stands to lose additional credibility. We therefore reduce our estimated value by one-third to $3.54. We present a recorded telephone conversation that contains an admission that CCME is engaging in securities fraud. The conversation took place on February 23rd between the CCME salesperson who provided us with the advertiser kit we cited in our February 3, 2011 report (the “Report”) and one of our analysts. The CCME salesperson initiated the conversation without notice in response to investigative actions taken by CCME’s auditor, Deloitte Touche Tohmatsu (“Deloitte”). During the conversation, the salesperson stated that: * CCME has been doubling the number of buses on which it has installed equipment for purposes of its SEC filings; and * CCME replaced recently replaced the salesperson’s hard drive due to the increased scrutiny. The recording with subtitles is available at: youtube.com We document that in the course of rebutting our Report, Chairman Cheng provided fabricated information. In Chairman Cheng’s February 7, 2011 letter (the “Chairman’s Letter”), Chairman Cheng challenged our assertion that CCME’s largest purported contract does not exist. His proof includes an “excerpt” of buses he claims are covered by the disputed contract. The excerpt contains license plate numbers of three buses. We have official documentation (shown in Appendix A) from the Shanghai Public Security Bureau Traffic Management Administrator (the “Traffic Administrator”) that shows these three license plates numbers are fabricated. We present the sales presentation we received in January from the aforementioned salesperson (the “Sales Presentation”) that shows CCME has fewer than half of the buses it claims. The Sales Presentation (Appendix B), which shows CCME’s buses by province and city, corroborates the following facts we presented in our earlier Report: * CCME has fewer than half of the buses it claims; and * Its largest purported contract (with Shanghai Ba Shi for 1,892 buses) does not exist. The number of buses for Shanghai-based operators in the presentation matches the number in the spreadsheet we received – 296. We present a mini-documentary of the largest purported operator – Shanghai Ba Shi – specifically focusing on its inter-city buses and drivers. The film shows that CCME’s hardware is not installed on the buses, despite CCME’s claim to have had hardware on these buses since at least mid-2008. The video is available at: youtube.com To download the full report (in PDF format), click the following link: CCME: Irrefutable Evidence of Fraud Disclaimer: Use of Muddy Waters LLC’s research is at your own risk. You should do your own research and due diligence before making any investment decision with respect to securities covered herein. You should assume that as of the publication date of any report, Muddy Waters, LLC (possibly along with or through our members, partners, affiliates, employees, and/or consultants) along with our clients and/or investors has a short position in the stock (and/or options of the stock) covered herein, and therefore stands to realize significant gains in the event that the price of stock declines. Following publication of any report, we intend to continue transacting in the securities covered therein, and we may be long, short, or neutral at any time hereafter regardless of our initial recommendation. This is not an offer to sell or a solicitation of an offer to buy any security, nor shall any security be offered or sold to any person, in any jurisdiction in which such offer would be unlawful under the securities laws of such jurisdiction. To the best of our ability and belief, all information contained herein is accurate and reliable, and has been obtained from public sources we believe to be accurate and reliable, and who are not insiders or connected persons of the stock covered herein or who may otherwise owe any fiduciary duty or duty of confidentiality to the issuer. However, such information is presented "as is," without warranty of any kind – whether express or implied. Muddy Waters, LLC makes no representation, express or implied, as to the accuracy, timeliness, or completeness of any such information or with regard to the results to be obtained from its use. All expressions of opinion are subject to change without notice, and Muddy Waters, LLC does not undertake to update or supplement this report or any of the information contained herein. Muddy Waters, LLC March 2, 2011

To: Madharry who wrote (41564)	3/2/2011 12:15:03 PM
From: E_K_S	Respond to of 78751

Hi Madharry - I like the investment theme "Industrial Infrastructure Expansion in China" but am not sure what the best approach is for investing in this sector. It was reported yesterday that China holds 1.6 trillion dollars of US debt up 56% from the prior year. China will spend this debt to build out their infrastructure and most likely will contract U.S. companies and their Chinese partners for products and services. I am still very skeptical of all Chinese accounting but feel more confident with a U.S. company that deals with Chinese JV partners. EI DuPont de Nemours & Co. (DD) was one of my earlier "value" picks based on their solar panel R&D facility investment in China. Photovoltaics: DuPont opens technical center in China solarserver.com Another of my US/China value picks is Corning Incorporated Common Sto(NYSE: GLW ). Corning recently invested over $1 Billion in China to build the company's first LCD glass melting facility and expand its light-duty substrate manufacturing operation. February 9, 2011 - Corning sees $2b opportunity in China chinaeconomicreview.com Therefore, I am looking for a slightly more conservative approach of finding U.S. companies that have Chinese partners that can manufacture and distribute U.S. technology throughout China (and even throughout the World). Have you identified any of your Chinese companies *that have U.S. partnerships* that might be a good value play? EKS