Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Jurgis Bekepuris who wrote (41966)	3/25/2011 12:56:16 AM
From: Spekulatius	Read Replies (1) \| Respond to of 78704

I actually think that Ebix is tricky because it's a rollup. Rollups are famous for fudging accounting. I don't know if EBIX specifically has issues but I would certainly look at it closely if I were to buy it. You are correct that any company can be a fraud or at least mislead investors. This is possible in the US, Europe, Asia. However I do not know a case where it's easier to defraud investors than with Chinese RTO - the multilayered holding structure Red flag), the fact that they are listed in one country (USA) but operate in another (China), the fact that they are reverse takeovers (many many examples of frauds with reverse takeovers, even before the Chinese variant came out and then the recent track record of multiple exposures of fraud. It is not easy to find another confluence of factors that makes it so likely to get screwed over. But that is my opinion Let's now take MCHB. In existence for 100 years, closely held. Pays dividend and does not issue stock (nor stock option for that matter). I know the branches, they really exist. They do not file SEC records but they file FDIC records (they have to since they are bank). I know that the FDIC has teeth and at least occasionally spotchecks the banks (based on numerous cases of banks that had restructure their balance sheet) so there is an additional layer of control there. I looked at the balance sheet and it looks consistent with what I would expect from a bank. Their business is mundane, no fancy stuff. I admit it is still possible that MCHB management cooks the books or do not disclose the real condition of their finances, but I am willing to be that the chances of this happening are probably 50x less than with a Chinese RTO. I take my chances but I don't play a game that is rigged.