Glen Doth Know

By Mark Bradford

I am just about an easy-going guy as you can meet.

Sure I get excited when I am in charge of something or other similar times, but for the most part I’ll just move over or stay out of the way when people try to use their perceived power on me because, quite honestly, life is too short to bother with the small stuff.

I have always believed most of what people told me anyway. My dad said “Save your money, son” and so I did. My mom said “Eat your vegetables” and so I did. My professor told me”Invest $250/month in the stock market and you will be a millionaire at the end of 40 years because the stock market returns about 9 percent annually, give or take.” So I did.

In fact, my wife and I invested $500 every month, through thick and thin and sending three kids to college. Like the rest of us, we watched as our life savings seemingly disappeared this past winter, even though they were placed in "safe" mutual funds. Being the easy-going guy that I am, I just shrugged and said, “Give it time, it will come back.”

So I did. That was OK until I watched a 60 Minutes episode in which they detailed how all the mutual fund managers were getting rich despite the bad economy. All of it was and still is perfectly legal, of course. They were still charging 3-5 percent management fees despite incurring huge losses through blatant mismanagement of MY money.

MY money. I have a son who is a budding investment guru. His “practice” portfolio (which included $50,000 of our family money) took a dive this past winter, too. But his losses were approximately equal to or less than my “professionally managed” funds. So, a college kid still wet behind the ears was able to think just like “seasoned pros” who supposedly have my best interests at heart.

My ass, they do. It suddenly occurred to me that every does time I was paying 3-5 percent fee just to dump money into their fund, I was losing money and they were taking (not making) it. They were the ones living the high life and vacationing in Hawaii while I spent two months trying to figure out how to pay an unexpectedly high tax bill.

Then it occurred to me that I didn’t HAVE to let these overpriced underachievers invest my money for me. If I was going to lose an automatic 3-5 percent upfront, I wanted to do it myself. I already had my Internet brokerage account and access to CNBC (my guess is the fund managers are drinking lattes and not watching Squawk Box in the morning). I am able to track the market on my own and, in fact bought the financials at historic lows and have a selling strategy in place.

And I don’t charge myself 3-5 percent. So, I called my IRA mutual fund holder and told them to get me out and send the cash to my discount broker. I filled out all their indecipherable forms and am now waiting for the cash to hit my Internet account. In fact, I have been waiting two weeks for these highly paid mutual fund managers to write a check and get it done. Great service.

When that happens, I will work with my son to choose the most effective accounts for long term growth and stability. I will have my ups and downs and I will make mistakes. But I can pretty much guarantee that if anyone gets a chance to live in the Hamptons on my 3-5 percent this time, it will be me.

When I was in high school in the 1960’s it was a popular phrase to say “Stick it to the man.” Little did I know “the man” would be disguised as some greedy mutual fund manager and that he would bleed me slowly and make me like it.

My change of heart is just my way of sticking him. And I hope others do too.

By Mark Bradford

Labels: AIG, C, FAS, FITB, HBAN

First, we select those companies in industries which we believe are strong and growing. Second, most companies must have existing profitability with several years of track record of consecutive financial performance. Third, we must believe the company has significant growth potential in terms of annualized growth rate. Lastly, we only select those companies which we believe have strong management teams.

Looks like it could be selling for less than Net Cash as of April 1st.

CHFI, Current Price $0.07, it traded as low as $0.05 this week. The huge selling volume is dissipating.

This is kind of what like Buffett did. He bought undervalued companies that bought undervalued companies. He met these companies at shareholder conferences.

People brag about 10-baggers. Nobody really brags about 100-baggers. They don't need to. Their reputation proceeds them. I'm stepping this one up. See you at Legendary Status.

Labels: CHFI

China MicroCRAPS? - The Inefficient Market Hypothesis
By
Glen Bradford

The Inefficient Market Hypothesis.
After sitting through my first year of MBA coursework and having the EMF crammed down my throat like trying to eat a spoonful of cinnamon, my gastrointestinal reflexes have had enough. Wikipedia puts it best: “The efficient-market hypothesis (EMF) states that it is impossible to consistently outperform the market by using any information that the market already knows, except through luck. …Empirical analyses have consistently found problems with the efficient markets hypothesis, the most consistent being that stocks with low price to earnings (and similarly, low price to cash-flow or book value) outperform other stocks.”

I’m the guy that sat through upper level psychology courses and disproved a significant quantity of their best-practices by showing that indeed their preferred treatments were statistically insignificant from the placebo. You may think I’m nuts, suspicion always was the signature of incompetence. There has always been room for these type of tipping-point broad-scale logical conundrums. For example, the world used to be flat. Even when proven otherwise, it took years to get to a spherical world.

Empirically disproving a hypothesis normally pushes them into oblivion, but the EMF is one that has been chosen for mindless perpetuation throughout MBA schools across the United States, as evidenced by my curriculum questioning at various MBA Case Competitions.

If you want it… Go get it. Period.

1. Figure out what works
I started with the most successful investor and worked backwords. An overview of what ideas I’ve traversed across can be found here http://web.ics.purdue.edu/~gbradfor/glen/files/Stocks/Abstract.doc . I would like to add that this works in every market and that I believe that every market average can be beaten through due diligence. Do note that settling for average shouldn’t always be frowned upon as it may be satisficing.

2. Do it
Find people that are doing what you want to be doing and start imitating. This is where most people go wrong and lose scope of the fact that if compounding interest isn’t working for them or they don’t know what it is --- it is most surely working against them. If it’s not working, you might be doing it wrong.

3. Kaizen
The goal here is to continuously redefine your decision making structure in order to continuously improve your definition of what works to align with what actually happens.

3 New Chinese Microcap Picks as Potential Empirical Evidence Against The EMH

1. Sell less than Cash – Total Liabilities
China Agri-Business (CHBU) is currently selling for less than net cash, is making money, and is growing. It’s really tough to complain about this kind of opportunity. That said, my mom is selling this company because I’ve made her a lot of money on it. I personally think that’s bad logic --- because I’d rather sell it at Cash-Total Liabilities

2. Sell off on “Bad” News
China Energy Corp (CHGY) is down over 50% from where we were a week or so ago. This bad news is that they closed down to increase the safety of operations. In my opinion, the long-term good news is significantly overpowering the bad news --- especially at this bargain bin price. I have its earnings pegged at $0.15 a share and huge catalysts on the horizon that are simply not priced into the company’s market cap. In fact, I think we are priced to go under.

3. Sell less than what you’ll make the rest of this year.
Oriental Paper Inc (OPAI) has taken a beating even though it’s making more money than it’s going to make for the rest of this year ignoring that it made money this first quarter.


That wasn’t so bad.
Not everything is worth knowing. The person speaking the loudest may have the least to say. Optimistically bounding uncertainty drives aggressive ignorance and the market boom/bust cycle. High power defective reasoning will continue to come from empty suits. Short-sightedness will always weigh in on long-term decisions. The point is this: blindly accepting what other people tell you works to their advantage and not yours. You will only get ahead by being better than average. To be better than average, you must do something different. Keep in mind that this isn’t for everyone. The first step to getting what you want is determining exactly what it is that you want.

I’m the kind of guy that questions everything and is willing to take a stand until empirically proven otherwise. I’m not a scientist --- I’m an engineer. I am not interested in learning how things work except for knowing the best way to make them work advantageously. No matter how seemingly self-evident something may be, people still may not understand. Never underestimate the predictability of stupidity.

Labels: chbu, CHGY, OPAI

Bob,

I agree with your analysis on the trend of the Zloty as compared to the actual present exchange rate. Further, I recently also began to appreciate the actual cash flows. As long as you’re not dealing with MBA’s Gone Wild at Enron --- you can usually scope out company lies by looking at their cash flow statement in conjunction with their Balance Sheet and Income Statement.

Never underestimate the predictability of stupidity. The human mind loves trends and always expects them to continue. Hence, the dilemma of the Thanksgiving Turkey. It’s from the Black Swan. I’ve picked up a few basic concepts that I plan on applying to how I manage the time in my life.

1. Use what you know to put yourself into situations of huge opportunity with limited risk.
2. The best you can do for someone is give them an opportunity and incentive to take it. The choice to take it is theirs --- and theirs alone.
3. Each individual has their own bounded rationality and I’m convinced that people fall into patterns of behavior and the kind of investing that I’m trying to do is not for everyone. It lacks the “really obvious” positive feedback loop that normally is associated with getting work done. For example, if I am shingling a roof --- I can see the impact of every nail I hammer. On the contrary, when I am investing --- a good investment premise might yield negative returns in the short and possibly long run.

Buffett takes these to the extreme and simply does everything he can in his power to eliminate the risk of loss from the equation. Soros tests every idea by trading money both ways and by being willing to get out/change his mind if the reverse of his initial hypothesis seems to be coming true. I like the structure of the CEDC deal. I’ve seen a lot worse and like you said, this looks like something that sucks now but will get better before the deal is over.

I’m getting pretty good at relating mostly everything to companies --- and it helps when describing companies to people who don’t understand them. I run into so many personal optimists that in my opinion really don’t have a chance at this future they have dreamed up because it’s simply not feasible and their short term actions are not leading to their long run targets. As far as companies go, these would be the ones that aren’t making cash. Usually, you can figure these out by looking at their Income Statement and see if they are posting profits while following the laws of accounting. If only it were this easy. But you actually have to run the Balance Sheet to see their Accounts Receivables and Cash Flow Statement to look at if they are even making Cash in their Operating Activities. I get mild entertainment reading stock market headlines and analyst reports.

I’m going to have to agree with your timing and location idea. I’ve never considered it as a trade-off. But, when you look at the scope of opportunity --- it is the only trade off.

1. Where?
2. When?

The questions apply to how you allocate your money, time, casual clothing vs. business clothing, your ability to close a deal, etc.

If a marriage only includes 1 orgasm, I might find myself in the judgmental department.

Anyway, I don’t write for the sake of writing and I only write when there is something worth writing about (in my opinion). Sometimes, I don’t even publish what I write because the opportunities would dry up if more people knew about them. I do at least hint about them on my blog. I don’t really come up with my own ideas very often. Mostly, I perpetuate ideas of others who have made it big in the past and apply them to what I understand the world to be today. There are a lot of math gurus that want to come up with the ultimate stock market equation and love finding plausible correlations. I’d rather spend my time outside of theory and in practice of something that empirical evidence indicates to be highly successful. I was always the kid in class that went against the grain whenever the teacher was trying to stump the class --- no reason not to apply that same ego in the stock market where it pays $ to be right.

My grandfather got lucky and turned a farm into a golf course.

Glen


From: Bob Bannon
Sent: Sunday, April 26, 2009 2:18 AM
To: Bradford, Glen Richard
Subject: RE: Conference call, CEDC

Glen,

Comments in no particular order:

1. I have thoght that CEDC options were thinly traded, and had concerns that I couldn't get out of a position in a timely fashion. Didn't have the 'nads to take a position in that manner. MY mild manner preferred simple ownership, at least until I became comfortable with how managment is handling the company. in these highly unusual times.

2. I like the dorky analysis. Good for the noggin. Had already read your articles. I appreciate that you are not using them as rifle shots, but rather as tests to see if you can try to figure out, say, "why is this thing so LOW?" As you develop depth of experience, hopefully you will come to think "Why am I making money by stating the obvious?" I have a 30 year real estate background in Anchorage, lots of development/finance/a little buiding. It is a tiny market, water on a couple of sides, mountains on the others. Half Alaska's population is in this petri dish. Very human scale. You can get to know the players. Sarah and Ted are real people. Ted is not only the US Senator convicted and now no longer convicted, he is the attorney who worked next door, and who loves my wife's pumpkin pies. I used to watch some local developer putting in a subdivision and think "He is 12 months away from being a success, but 6 months away from being bankrupt." They were enthalled with the projected P&L of a project, but failed to project each month's cash flow. Cash flow is more important than P&L, in my experience. That is what I am watching on CEDC. Can they afford to carry on in their specific markets? So far, I think "absolutely."

Another "take away" from Anchorage: You may have heard that the three most important things in real estate are location, location , location. Don't go for banality. Dead WRONG. Timing, timing, timing. I had 40 Acres on Klatt Road. Value was $3,000 an acre . . . or $80,000 an acre, and a year later $10,000. I guaranty you the location did not change. The market did. Timing. That is what is happening with CEDC.

3. The agreement to acquire the balance of RAG I believe will demonstrate that the TERMS of a transaction are more important than the PRICE, which is simplly one component of a transaction. I think I am forming the opinion that the transaction is very well structured, specifically to allow CEDC to earn their way across the minefield of the Zloty over time. Ome aspect which I like is that if the share value increaseses and the market allows, CEDC can gen some cash through equity placement and pay off the entire transaction early, BUT is not required to do so.

3. "Of course it must be legal, because otherwise they would not do it." A cynical comment on my part. Followed instantly by "More specifically, they probably have an attorney's opinion that it is legal, which is not exactly the same, now, is it?" Visit a law library. Huge. A scrillion books. Look at the ethical guidelines for the state bar. It is a pamphlet.

Ambrose Bierce in "The Devil's Dictionary" defined an attorney as "One skilled in the circumvention of the law." My memory, but you get the gist.

4. One last constructive thought on your dorky analysis. My review of the Zloty exchange rate over, say, 6 months, led me to believe that the Zloty exchange rate is not as important to the CEDC share price as the TREND of the exchange rate over a short time frame. Observe that there are many times when a specific exchange rate exists, 'frinstance 3.2. CEDC price wil be increasing, or decreasing, I believe depending on the trend obvious to the market at that instance, rather than the specific rate of 3.2. IF the market perception is that exchange rate trend is favorable, the share price she move up. If the perception is that the exact same exchange rate sucks and is getting worse, the price she goes down. All I am suggesting is don't look at something as a snapshot, look at it as a movie clip. A snapshot of a plane landing tells us very little. A ten second clip of the landing shows the floats ripping off and plowing in, OR a greased landing and the pilot waving to his wife and friends.

Anchorage went through an earthquake, say 8.4 Richter scale. A certain amount of destruction. My thought: the highly esteemed Richter scale not a good indicator of what is going on in a quake, but it has become the news clip cliche, sort of the "Dow Jones Industrial Average" of earthquakes. If the quake had lasted 30 seconds, they would have written books about how great the Anchorage building code was. Unfortunatley, the quake lasted over 3 minutes, plastic failure (liquification) occurred in the underlying clay, which ran out from underneath some buildings, which sort of . . . turned over, broke the connections, collapsed. Not a good thing for a multi-story building. Not good if you are standing on the wrong side of that building. So they wrote books on how our building code failed. The Richter scale, you see, does not address the duration of the event.

I think truly important things should be viewed over some time period.

Marriage should not be judged by an orgasm.

I appreciate your comments, and I give them significant weight. I find I often do that when I agree with someone!


Bob
-----------------------------------------------------

Bob,

I’ve been bullish on CEDC for a long time (since about $40). I also noticed the Zloty destroying my position in CEDC. That’s why I dumped the stock and used the proceeds to buy Call Options on CEDC that expire January 2010 --- effectively leveraging up anticipating that the global appetite for risk would eventually turn from ‘widespread panic’ to ‘risk is sexy.’ I did this back when CEDC was around $25 on its way down. I also did this with a few other companies. With this position, I’m not really watching the daily trading shenanigans that I’d be watching if I owned the stock. I’m just waiting patiently for everyone to drive the price back up so that I can make some big money.

I ran some dorky engineering/statistical analysis with some basic assumptions on CEDC a couple months ago which still apply: http://seekingalpha.com/author/glen-bradford/comments/symbol/cedc

I say this thing will appreciate back to $40 by then. As far as what happens this week, or Monday specifically--- it looks like this is a stock exchange deal. The higher CEDC goes in the short term, the better it is for CEDC.

I don’t plan on listening to the conference call. I’m biased to reading the transcripts that come out within a week. I’m not a believer in the efficient market hypothesis --- so I don’t think that news released instantly changes stock price to reflect value. I believe achieving value takes time. Otherwise, looks like some huge news is on the way.

You did say something that’s not always true: Of course it must be legal, because otherwise they would not do it.

This is one of the stocks I am incredibly confident in as far as outperforming the market over the next year goes.

Only time will tell if any of my ideas are right: http://caps.fool.com/player/bradford86.aspx

Glen

From: Bob Bannon
Sent: Saturday, April 25, 2009 7:56 PM
To: gbrad
Subject: Conference call, CEDC

Glenn,

WE have not met, but I am a fellow shareholder in CEDC. Read Alpha for various items. I assume you will be listening to the CC before the market opens Monday?

I picked up on two interesting details when reading their previous filing, where they discussed increasing their RAG position by purchasing/renegotiating with LION, which is the Kravitz stable of fast movers in London.
(Seen their website? 'Barbarians at the Gate' with James Garner? Got to. Requisite for understanding Lions folks.)

My opinions: One, in retrospect, managment is jumping up and down with their hair on fire, very much is trying to put out signals that the share value should go UP. When you realize that they have to issue additional shares of CEDC to LION if the share values dwell below certain benchmarks, ($12 and $20 range) we can see that CEDC managment must have been wailing when share price was around $6. Mucho happier now, as am I. TWO, very unusual item, I thought, to find tucked away in the discussion of RAG a factoid that certain "Executive Sales" folks were NOT on the CEDC payroll, they were compensated by CEDC customers, who were their employees, and CEDC provided discounts to those customers, which kicked . . . er, provided the compensation to the employee of the customer firm. My guess is that those individuals are decision makers on which booze/who's booze to buy. Call me cynical, but I found that interesting. Of course it must be legal, because otherwise they would not do it. More specifically, they probably have an attorney's opinion that it is legal, which is not exactly the same, now, is it?
In another part of their filing, they crowed about how successful their executive sales arrangements had been, but were pretty vague about exactly what they were talking about. That raised the flag.
Don't know what to do with that, but I like knowing what is going on when people are trying not to use English in a clear manner.
I don't like the "huh?" factor.

Zloty. Basically, I have come to the conclusion that I have no control over it, but I have a clear map of the negative correlation between share price when
http://finance.yahoo.com/echarts?s=USDPLN=X#chart1:symbol=usdpln=x;range=5d;compare=cedc;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=off;source=undefined

and since I can use that link to peek at the zloty trade in europe every stinking day for hours before NYSE opens, I will watch like a hawk and adios if a 'trend to grim' emerges over several days. Not going to ride the roller coaster down from 20 to 6 again, now that I have found THAT little detail!

Had enough of the "Wheeeeeeeee!" factor last time. All I want now is the chain ratchetting us up.

Have you an expectation for Monday's CC?

Bob


My Radar

Labels: CEDC

If it’s any constellation, So far I’m winning on this one in motley fool caps.

So, what does Goldman have to do to get back to $235 from $120?

For starters, that was the all time high of GS. Further, that’s a 95% return from where we are today.

Historically, their revenue growth: 32% and net income growth 24%.

A lot of their current price depreciation is directly a result of market uncertainty. Over time, the VIX will get back to $25. http://finance.yahoo.com/q?s=^vix

From May 2007 to November 31st 2008:

The VIX rallied 400% from 12 to 80.
Meanwhile GS declined 46% from $227 to $120.

Present values:
VIX $37.14
GS $120.36

Reverse this trend and put the VIX at $25 in 2014. This implies that GS will get back to $170 simply on the decreasing uncertainty over the next 5 years.

That still leaves a huge gap. That means that GS needs to start making money and have a growth rate. Under normal conditions, a company’s market cap reflects its current earnings and it’s expected growth rate. The larger the company, the more close to this intrinsic value the company approaches. A couple rule of thumb formulas for calculating a reasonable price are PEG = 1. In 2007, GS reported an EPS of $24.73 per share. That puts their highest price at a P/E of 9.5.

For Year End P/E ratios: Notice the decreasing trend from 2001 through 2007 even though Earnings and Revenues were growing. The estimated 2009 Earnings are $9.80 and the 2010 Earnings estimates are $12.18. Chalk those up to a P/E of 14 and you’re at $182. $235 requires a P/E of 19.5 off these numbers, implying a growth rate of somewhere around 19.5%. What is the best way for GS to achieve this growth rate when the real estate deals that they’ve been pushing into huge dollar deals are not an option anymore and they’re going to be writing off losses for a while?

Let’s see what’s going on: http://seekingalpha.com/article/130909-the-goldman-sachs-group-inc-f1q09-qtr-end-3-27-09-earnings-call-transcript?page=-1&qa=true

http://www2.goldmansachs.com/our-firm/investors/financials/current/annual-reports/financial-section-2008.pdf

Well, it looks like they’re going to be giving $1B to Warren Buffett for a few years looking forward.

For starters, sifting through their financial statements and investor annual reports is mind boggling when you take into consideration that they’re not marking-to-market, but mark-to-model (aka. Mark-to-profit)

Our global core excess pool of liquidity reached record levels during the first quarter of 2009, averaging $164 billion during the quarter.

With 462M shares outstanding, using $100B of this liquidity in order to buy reasonably rated fire-sale bank mortgages at 30 cents on the dollar with an assumed yield rate of 4% will bring in a potential net income of ($100B/$0.30)*(0.04) of $13.3B a year in earnings. Throw in a default rate of 50% and you still are pulling down $7B a year. (This would boost the stock price hugely as it would be about $15 a share EPS).

Letting money sit on the sidelines when there are assets being sold at panic/fear/irrational prices is not exactly a bright thing to do. If GS is really smart, they could target Foreign mortgages in areas like Poland, where the currency has been destroyed and is bound for a rebound, the market is set to outgrow the US, and the government is looking for stability.

Why GS has that much excess liquidity is beyond me. I think that getting back to that share price is pretty feasible if they put their money to use intelligently. If they wait for all the deals to disappear before doing anything, that’s just plain dumb.

Personally, 100% upside in a stock doesn’t excite me and I am proud to say that I am not foolish enough to own Goldman Sachs. I bought into a company today selling for less than half of cash-total liabilities and am up 100% on it so far.

Hope this helps? You may have been looking for fancy algebraic models of combinatorial power formulas. Those just don’t work. They lull acadamians into false senses of security. See Epistemic arrogance.

Glen




From: Gold, T
Sent: Tuesday, April 21, 2009 6:35 PM
To: Bradford, Glen Richard
Subject: RE: Corporate Valuation

I think 5 years will be better. Once we have a base model we want to run some sensitivity on the returns they will see from the investments they are making to get out of this mess.

Thanks for the help.

Tim

________________________________________
From: Bradford, Glen Richard
Sent: Tue 4/21/2009 5:22 PM
To: Gold, T
Subject: RE: Corporate Valuation
Ill come up with something tonight. Seeing as how I spend more time analyzing companies than doing mba coursework and how I recently dug deep into banks... What's the time frame? 1 year? 5 years?

-----Original Message-----
From: Gold, T
Sent: Tuesday, April 21, 2009 6:15 PM
To: Bradford, Glen Richard
Subject: Corporate Valuation

Hey Glen,

Given your expertise in the area of corporate valuation, I was wondering if you could help me out. For our Finance 3 paper we are focusing on Goldman Sachs and the things they will need to do to get back to $235/share. This is probably aggressive and as a starting point we will be attempting to price Goldman Sachs at its current level of approx $120. Do you have any models that could do something like this, do you have any recommendations on an approach? We were going to look at their current strategies, like purchasing "toxic" assets, along with other things to determine what types of returns they would need to see to increase their value to a level that would demand a $235 share price.

Let me know what you think if you have some time.

Thanks,

Tim

Labels: GS, VIX

Buy List	Earnings	Price	P/B	Target	Live Tickers	Current Price
1	$0.95	$1.78	0.017	2440%	xing	$ 1.78
1	$0.13	$0.08	0.160	1725%	ghii	$ 0.08
1	$0.20	$0.15	0.189	1421%	opai	$ 0.15
1	$1.52	$2.73	0.039	1378%	qxm	$ 2.73
1	$0.20	$0.16	0.122	1147%	nwd	$ 0.16
1	$0.09	$0.10	0.186	1019%	akrk	$ 0.10
1	$0.34	$0.30	0.444	944%	cnoa	$ 0.30
1	$0.24	$0.32	0.337	799%	ltus	$ 0.32
1	$0.85	$1.44	0.163	676%	cno	$ 1.44
1	$1.00	$2.48	0.113	671%	cxpo	$ 2.48
1	$0.16	$0.28	0.306	642%	pudc	$ 0.28
1	$0.27	$0.39	0.328	632%	lpih	$ 0.39
1	$0.15	$0.22	0.413	603%	chgy	$ 0.22
1	$0.70	$1.54	0.633	477%	cneh	$ 1.54
1	$0.23	$0.40	0.303	474%	ckgt	$ 0.40
1	$0.07	$0.18	0.847	402%	cyxn	$ 0.18
1	$0.10	$0.30	0.422	390%	chbu	$ 0.30
1	$0.51	$1.40	0.840	380%	chcg	$ 1.40
1	$0.60	$1.82	0.652	337%	chme	$ 1.82
1	$2.16	$6.78	0.735	258%	gnph	$ 6.78
1	$0.50	$1.68	1.783	237%	caei	$ 1.68
1	$0.48	$2.20	1.114	234%	cmfo	$ 2.20
1	$0.16	$0.72	1.297	233%	csgh	$ 0.72

Labels: chbu, chme, cxpo, lpih

I gotta love it.

First, mark to market was adjusted by FASB

Then, citi claims that it won't have an effect.

Well, it kind of doesn't.

In their first quarter summary, they disclose that now they are using them!

Citi adopted FASB’s recent rule changes regarding fair valuation (FAS 157) and other than temporary impairments (FAS 115). The adoption of the changes to FAS 157 had no impact on Citi’s financial results. The adoption of the changes to FAS 115 resulted in approximately $631 million pre-tax of lower impairment charges recorded in revenue in the current quarter. Additionally, the cumulative effect of the changes to FAS 115, which did not impact revenues, led to a $413 million after-tax increase in retained earnings and an offset in other comprehensive income on the balance sheet.

Haha, their CEO doesn't even attend the conference call.

Hey, they are just trying to survive. I would imagine if you can poke them with a fork, and they wriggle like a snake, they probably are a snake, and they might bite you, but when the government is wrangling them already... the risk is mitigated a bit.
http://seekingalpha.com/article/131531-citigroup-s-horrible-conference-call

I'm still riding this bucking bronco.

Labels: C

Well the shorts prefer shorting c

http://shortsqueeze.com/?symbol=c&submit=Short+Quote%99

insider transactions look better with c

http://finviz.com/quote.ashx?t=c&ta=1&p=d

mutual funds prefer etfc

http://www.thebuylist.com/default.aspx?Stock=etfc

etfc’s technicals are stronger

http://stockcharts.com/h-sc/ui?s=etfc&p=D&yr=0&mn=6&dy=0&id=p04446711432

consensus.. Citigroup is more risky! Surprise!!!!

So, if we think that citi will survive this, we will make more money, especially In the short term, because this thing is set to be a short squeeze rocket.

What do we know about Citi?

http://money.cnn.com/2009/03/10/news/companies/citi_profitable.reut/
1. It was profitable or claims to be profitable in the first 2 months of 2009.
2. Mark-to-profit accounting
3. Selling less than book value $13
4. Selling at a P/E of less than 2 according to historical earnings
5. Other banks are putting down record numbers, citi is set to follow suit on Friday. That’s my take.

I’ll stick with citi because there is tremendous upside on Friday. I think the risk is limited due to the first 2 points and the last point.

http://finance.google.com/group/google.finance.662713/browse_thread/thread/8b63f678f81ce445

Hope this helps,
Glen


From: Andy C
Sent: Wednesday, April 15, 2009 2:51 PM
To: Bradford, Glen Richard
Subject: Re: C or ETFC?

Thanks for the response. I'm not really that familiar with what ETFC has done lately but I noticed they had a loss in 2007 larger than in 2008, which seemed a little odd to me considering the economic conditions. I'm fairly diversified (at least long term) but I recognize there's some money to be made short-term in the financial sector right now. I saw you recommended FAS, but the way people play that stock and FAZ makes me a little nervous because I'm not completely familiar with how it all works. I'm fine with risk, but only when I know what I'm getting into ;).

I put an order in for a small amount of C but I don't know if it will be filled today at all. Still very interested to hear what you find on ETFC vs C!

Thanks,
Andy
On Wed, Apr 15, 2009 at 2:17 PM, Bradford, Glen Richard wrote:
Food for thought:

In situations like this, where it’s hard to know exactly what’s going on… the best bet is to diversify.

My big bank bets mostly are along the lines of the earnings they have done in 2006 and how I understand they’ve reacted over the past 2 years aka taken precautionary measures, government bailouts, etc.

I’ll take a deeper look at ETFC vs C tonight

From: Andy C
Sent: Wedn
Subject: C or ETFC?

Glen,
What do you think of ETFC right now? They seem pretty undervalued. I have some money to put in today and I'm trying to decide between ETFC or C, with earnings coming out soon for both of them. I originally had a position in C that I sold at 3.75 so I'm a little hesitant to get back in around that price again, since I know there's a bigger downside to be had. Does it come down to 'ETFC = safer'?

Thanks,

Andy

Labels: C, ETFC

Allow me to start off by illustrating my sentiment from January 2008 – February 2009: I hate banks and I have no idea what they are doing. I hate anything financially related.



But, I find myself not hating banks anymore. What happened? I’ve got 8 leading indicators that people might be aware of but aren’t catching headlines like they should be and I’ve got 4 monster catalysts. What do I know, I’m only the Motley Fool’s Hottest Player going into Easter Weekend. Further, My entire college tuition is riding on the stock market.



Leading Indicators:



1. Federal Funds Target Rate is nil. This means that banks can borrow as cheaply as they ever have been able to. When you borrow at these interest rates, the net present value of any opportunity where you can at least get your money back is a good one to be taking.
2. Banks as a sector cheap from a historical perspective. I wonder why? Fear, panic, disorder, lack of trust, lack of speculation --- just a few ideas.
3. There is tons of cash on the sidelines. Blood is in the streets. There has definitely been “the slaughtering of the speculator” over the past year and a half. I believe now is the time when the speculator finally gets congratulated.
4. We are up 28% off the bottom according to the S&P500.
5. Global Markets are leading the way. They are up 53.4% according to EEM [iShares MSCI Emerging Markets Index (ETF)].
6. My uncle who is a banker panicked and sold out of the market at Dow 6700.
7. Mark-to-market has been relaxed to ‘mark-to-whatever-makes-us-look-good.’ Aka: Mark-To-Profit.
8. The uptick rule might come back. In my opinion, this isn’t necessary at this point.



Monster Catalysts:
1. Citigroup and Bank of America said they were profitable in the first 2 months of 2009. Great! Now they can do whatever they want to their balance sheet with the relaxation of mark-to-market. What does that imply? How can you lose money when you get to put whatever you want on a balance sheet? Especially if you’re a bank and you thoroughly understand how to crunch numbers and make them look favorable, you’re going to be looking really good now. It’s the Enron dilemma of “mark-to-model.” I could come up with some great spreadsheet models that make me look like an undervalued opportunity.
2. It’s already happening! Wells-Fargo is coming in crushing analysts. Well, of course! What do you expect when you can borrow money to invest in opportunities and you’re not paying a significant interest rate on what you borrow?
3. Analysts are going to get caught with their pants down this week. Earnings are coming out. Tuesday: Goldman Sachs; Thursday: JPMorgan Chase; Friday: Citigroup. There is so much upside that they simply can’t see because they don’t really understand what’s going on. If they did, they wouldn’t be analysts. They’d be retired. What does this do? This sets up an opportunity for some huge price target upgrades, usually after the price actually appreciates to that target. Have you noticed that analyst price targets seem to be a lagging indicator of stock prices --- or is it just me?
4. Debt upgrades. Once Mark-To-Profit kicks into full swing, the ratings agencies have to think a little more highly of these poor banks.



How to play this one:



I like a couple insurance agencies in decreasing order: CNO, GNW, PNX. I think GNW didn’t need the TARP anyway. That’s a sign of strength. Am I the only one seeing this?



I like a couple bank plays, also in decreasing order: FAS, C, BAC. I’m not into the Wells-Fargo’s and the Goldman Sach’s or even JP Morgan’s of the world --- where is the upside there? 100%? Not enough.



Disclosure: Glen Bradford owns CNO, GNW, PNX, FAS, C, BAC and/or options on them in his and his investor’s accounts.

Labels: BAC, C, CNO, EEM, FAS, GNW, IYF, PNX

Allow me to start off by illustrating my sentiment from January 2008 – February 2009: I hate banks and I have no idea what they are doing. I hate anything financially related.



But, I find myself not hating banks anymore. What happened? I’ve got 8 leading indicators that people might be aware of but aren’t catching headlines like they should be and I’ve got 4 monster catalysts. What do I know, I’m only the Motley Fool’s Hottest Player going into Easter Weekend. Further, My entire college tuition is riding on the stock market.



Leading Indicators:



1. Federal Funds Target Rate is nil. This means that banks can borrow as cheaply as they ever have been able to. When you borrow at these interest rates, the net present value of any opportunity where you can at least get your money back is a good one to be taking.
2. Banks as a sector cheap from a historical perspective. I wonder why? Fear, panic, disorder, lack of trust, lack of speculation --- just a few ideas.
3. There is tons of cash on the sidelines. Blood is in the streets. There has definitely been “the slaughtering of the speculator” over the past year and a half. I believe now is the time when the speculator finally gets congratulated.
4. We are up 28% off the bottom according to the S&P500.
5. Global Markets are leading the way. They are up 53.4% according to EEM [iShares MSCI Emerging Markets Index (ETF)].
6. My uncle who is a banker panicked and sold out of the market at Dow 6700.
7. Mark-to-market has been relaxed to ‘mark-to-whatever-makes-us-look-good.’
8. The uptick rule might come back. In my opinion, this isn’t necessary at this point.



Monster Catalysts:
1. Citigroup and Bank of America said they were profitable in the first 2 months of 2009. Great! Now they can do whatever they want to their balance sheet with the relaxation of mark-to-market. What does that imply? How can you lose money when you get to put whatever you want on a balance sheet? Especially if you’re a bank and you thoroughly understand how to crunch numbers and make them look favorable, you’re going to be looking really good now. It’s the Enron dilemma of “mark-to-model.” I could come up with some great spreadsheet models that make me look like an undervalued opportunity.
2. It’s already happening! Wells-Fargo is coming in crushing analysts. Well, of course! What do you expect when you can borrow money to invest in opportunities and you’re not paying a significant interest rate on what you borrow?
3. Analysts are going to get caught with their pants down this week. Earnings are coming out. Tuesday: Goldman Sachs; Thursday: JPMorgan Chase; Friday: Citigroup. There is so much upside that they simply can’t see because they don’t really understand what’s going on. If they did, they wouldn’t be analysts. They’d be retired. What does this do? This sets up an opportunity for some huge price target upgrades, usually after the price actually appreciates to that target. Have you noticed that analyst price targets seem to be a lagging indicator of stock prices --- or is it just me?
4. Debt upgrades. Once ‘mark-to-whatever-makes-us-look-good’ kicks into gear, the ratings agencies have to think a little more highly of these poor banks.



How to play this one:



I like a couple insurance agencies in decreasing order: CNO, GNW, PNX. I think GNW didn’t need the TARP anyway. That’s a sign of strength. Am I the only one seeing this?



I like a couple bank plays, also in decreasing order: FAS, C, BAC. I’m not into the Wells-Fargo’s and the Goldman Sach’s or even JP Morgan’s of the world --- where is the upside there? 100%? Not enough.



Disclosure: Glen Bradford owns CNO, GNW, PNX, FAS, C, BAC and/or options on them in his and his investor’s accounts.

Labels: BAC, C, CNO, EEM, FAS, GNW, IYF, PNX

For those of you who passed simple math, 2+2=4

For those of you who understand a successful merger/acquisition, the goal is the combination of the two companies to yield more than their separate parts, essentially 2+2=5

Anyway, what you saw in Wells Fargo is going to happen over the next 5 weeks to the entire banking sector as well. If you cut the rate at which banks borrow to finance their loans, that increases their profit margin. Expect either a blockbuster quarter or a write off, but the blockbuster is more likely in my opinion.

Get ready to either be positioned in these stocks or miss the boat.

Tuesday: Goldman Sachs

Thursday: JPMorgan Chase

Friday: Citigroup reports

Where is the play? FAS. Further, I like Citigroup over JPM and GS, cause --- it has the most upside.

If I owned AIG, I'd sell out at $5 if it ever gets that high. The old CEO laughed at management's decisions since he left, go figure. Pass the blame.

If you're into insurance, GNW, PNX, and CNO are the ones I'm riding.

Labels: AIG, C, CNO, FAS, GNW, GS, JPM, PNX

Tom,

Looking through HERO. CNEH in my opinion is just a better deal. No reason to screw around with HERO since it’s still losing money and it’s contracts are up in the air. I don’t think this rebound is going to send OIL above $60 in the short term (long term is another deal), not to mention July of 2008 and the surrounding 5 months caused a lot of people to start drilling their own oil. Supply is going to be huge. CNEH is intelligent, but I’m just not feeling HERO. Rule #1: Don’t lose money. I don’t want to take risks to make huge gains.

Not big on IO either. I think this one is a turn-around play and will probably turn back to huge profits in a year or two, but not a play right now. Their 2009 projections don’t look very pleasant. If they’re not optimistic, I’m not either. Oil can be bought cheaper at wall street than it costs to go find it and harvest it.

Glen



From: Tom Anthony [mail
Sent: Thursday, April 09, 2009 8:58 PM
To: Bradford, Glen Richard
Subject: Re: KHD

Thanks for the response, Glen. Yeah, ORS shot up and then fell pretty hard...glad to hear you got out when you did. I never made a position, I just never really felt confident with it.

Bought into CNEH the other day when it hit 1.35. Another one i've been watching is Hero - I know its not a China stock, so I'm not sure how interested you are - but its over 95% off of its 52 week high. Their earnings are at the end of the month. I bought into IO about a month ago and I'm thinking that Hero may have more upside potential, even though it looks like I may have missed its bottom... but I need to get a better understanding of them. I think IO is a pretty good investment with potential but maybe not as much as Hero. I dunno yet, but you may want to give it a looksee.

Anyways, like i said before, I enjoy reading your site... and I'm not ashamed at all of cherry picking CNO from you. hahaha.

Tom


On Wed, Apr 8, 2009 at 1:17 AM, Bradford, Glen Richard wrote:
Blog Wars Transcript:
Hey Glen - are you in this for the long haul or did you get out at the bounce yesterday?

Are you still bullish on ORS?

Thanks,
Tom A
5:20 PM

Glen Bradford said...
Tom,

I sold ORS at $1.04, something like 200% profit.

I am not a big fan of their A/R being something like 200 days of sales and increasing.

I'm hesitant until this thing gets cheaper or reports better A/R turnover. I'm familiar with the MCI swindles of the 1995 era. This could be similar. I have no idea; happy speculation.

Glen


From: Tom Anthony
Sent: Thursday, April 02, 2009 11:39 AM

To: Bradford, Glen Richard
Subject: Re: KHD

Haha. I don't think I can ever fault a guy for going out and having a few drinks...or more. I've been out of school for going on 4 years now - I definitely miss the random Tues/Wed nights out.

CNEH - their earnings report on Monday was pretty impressive. I really like oil and I have wanted to get exposure to oil in China.

They've been granted another year and half time to get listed on a major exchange. This may be a good time to pick them up before they list. They amended the terms in early March for listing.

In 04 when they changed to CNEH they had I think around 20 wells and planned to have 102 more wells completed in 4 years. From their recent earnings, it shows they have 219 operating wells - I would have to see that as a big positive.

I'm not sure of all the specifics with their PTR agreement, but for the first 10 years PTR gets 20% of their production and that jumps up to 40% in 2013. I'm not entirely sure how that will affect them in 5 years, but for the next five years its 20% of their production that PTR takes per their exclusive agreement and they have obviously been growing extremely well - 08 was a huge year for them.

They are not too far off their lows and their growth does seem pretty enticing. I haven't decided if I'm going to create a position at all - most of my money that I've planned to invest is already invested in the market and every month I try to add to it - I need to make sure this is a better play than something else. Let me know your thoughts.

Thanks - Tom



On Thu, Apr 2, 2009 at 10:25 AM, Bradford, Glen Richard > wrote:
Tom,

I’ve been looking into it. Looks like a cash / accounts receivable problem.

Same thing with ORS.

Take a peek at CNEH.

I will be digging deeper though. I went out last night instead of sorting through company information.

Glen

From: Tom Anthony
Sent: Wednesday, April 01, 2009 7:33 PM

To: Bradford, Glen Richard
Subject: Re: KHD

Hey Glen,

I read your article about CNO awhile back and just wanted to say thanks for bringing that opportunity to my attention.

I was wondering what your thoughts were on Asia Time Corp if you've looked at that stock at all. They had their IPO early 2008 which started out well for them but they are over 90% off their highs with a PE around .6. Obviously they don't have a lot of history though. Their last financials showed them with a good amount of cash on hand. I'm still waiting for earnings to come out. The same thing is going on with ORS - no earnings. I figured they would be out this week, but that hasn't happened yet. I know awhile back you were interested in ORS - are you still? Anyways, I enjoy reading your stuff - thanks.

Tom

I’m dumping XIN ASAP. I’m finding other opportunities that are significantly better. XIN is still a great company and will probably appreciate in price…

But, like most of my articles indicate: I will always drop a great deal if I find a better one. Right now, you can find growing companies with P/E < 2. That’s huge.

Just be glad you’re investing in china. It’s set to do significantly better than the US markets. The shanghai is already up about 27% so far this year, not to mention that it’s up more than that from its bottom.

I don’t plan on writing articles on the absolutely unbelievable deals I’m finding. I plan on putting them on my blog and trying to pick up a few more individual investors. When I feel that I’m personally invested enough, that’s when I’m going to take my ideas public again. I see no reason to tell other people about hidden gold when I am not set to profit from it.

Glen

From: Tom Anthony
Sent: Saturday, February 14, 2009 3:26 PM
To: Bradford, Glen Richard
Subject: Re: KHD

Thanks for getting back to me, Glen - I do appreciate it. My one concern with KHD was their ability to grow, but throw in the China stimulus and their cash on hand and I thought it deserved more research.

I've read through your blog and completely agree on XIN, I picked up some shares back when it was below 2 bucks. I don't know much about GHII, but will definitely do some more digging on it.

Thanks again, Glen

Tom
On Fri, Feb 13, 2009 at 8:39 PM, Bradford, Glen Richard Tom,

I was looking through their investor presentation. It looks like it may be cheap for a reason. The industry appears to be cyclical.

I think that there is probably more downside. That's my best guess. I would rather bet on companies that are going to grow in these hard times and are equally cheap.

Glen



From: Tom Anthony
Sent: Friday, February 13, 2009 10:58 AM
To: gbra
Subject: KHD

Hey Glen - I came across your blog the other night as I was researching AOB when I saw it at under 4.80. You seem pretty bullish on most things China and I'd like to get your opinion on KHD. It seems like every other value / bargain screen pops this one out. I'm trying to come out with a reason why this wouldn't be a good stock to get into, it seems that with its cash > market cap its a no brainer. What do you think?

Thanks,

Tom A.

------------------------------------------------------------------------

Tom,

I agree with your analysis on CPX. I’m leaving this one alone. I don’t see oil prices booming --- but CPX is likely to outperform the market --- just not enough for me to consider worth my time for this risk level.

COP --- not enough upside to be worth my time.

GCI --- probably going to $8, don’t see it going up past $20. The internet is awesome. I don’t invest in short term long term ideas. I need a long term idea.

HERO --- see above.


MGM --- sounds like a gamble. I’ll pass. I’m risk averse. We didn’t miss the boat. There is more upside, and then… there’s some downside… serious downside.

ZLC --- I prefer Blue Nile to Zales, but let’s take a peek. I think it’s cheap for a reason, or at least analysts do. I don’t want any diamonds. I don’t understand why people pay so much for them.

SKS --- I shop there but I don’t buy anything. I’m not a huge fan right now. There is upside though. Probably an easy double. I just don’t like playing games with companies in a rut.


From: tcors [mailt On Behalf Of Tom Corson-Knowles
Sent: Thursday, April 09, 2009 9:18 PM
To: Bradford, Glen Richard
Subject: Re: Real Stocks for Real Investors


Hey,

CPX looks decent. It has strong cash flow, strong balance sheet, and is earning about $150 M+, so it's effectively trading at 2-3x earnings. However, it's likely overcapacity in the industry will get worse if oil prices stay low. If oil prices boom, this stock will boom. If you were betting on oil prices rising, I am not sure if this stock would give you a better return as opposed to other options like COP.

I like Gannet. It is in the worst industry in the world in my opinion, but it is generating $1 b+ net income and trading for less than $900 M. It's current ratio is getting worse though and is coming close to 1:1. Long-term, this would be a bad investment because of the industry, but for 1-2 years or less, it could pay off well.

HERO is a lot like CPX, but they focus on offshore drilling. It's trading at ~ 1.6x earnings.

MGM is up a shitton. Looks like we missed that boat.

None of these companies really impressed me, but I will keep an eye on these 3, ZLC, and SKS.

Tom C.

----------------------------------------------------------------------------

thanks, alot of folks love the quote, we sell alot of high end knives to our military.
Last month we sold a big order to Homeland Security!

I went ahead about bought some CAEI today, glad I got in at $1

paul

People sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf. Orwell

http://www.tdeknives.com/



-----Original Message-----
From: Bradford, Gle Ri
Sent: Thursday, March 26, 2009 05:24 PM
To: paul
Subject: RE: Nine Top China Plays
Paul,

You’re email didn’t pass my Junk e-mail filter. I found it anyway.

I’ll see what I can do. I run a bulletin board on ORS.

I invite you to check it out.

http://investorshub.advfn.com/boards/board.aspx?board_id=8745

I’ll be looking more at this since you pointed it out. Just curious, but do you usually get responses when you link to a knife website in your email? Haha, I can see that some people might be threatened. Good stuff.

I’m pretty good at getting responses. Shoot me your contacts that you’ve emailed and I send them looking like a student, people love students. People are afraid of knives.

Glen

From: paul
Sent: Wednesday, March 25, 2009 10:52 PM
To: gbrad
Subject: Nine Top China Plays

Hello there Mr. Bradford


I really enjoyed your read on the China picks. I have been accumulating many, many thousands of shares of ORS and I do believe it has a ton of potienal. I am considering buying several thousand more this week before the possible April 1, end of year release.
The BIG item holding down ORS is their Accounts Receivables. If they get them back in line, the stock will explode. I wanted to ask if you have found any info that suggests they have.
I have scanned all over the Internet and they will not answer emails so I was looking for any clue before I sink more money in. Just thought it would not hurt to ask another informed investor. Thanks for your time and keep up the good work.

paul

http://www.tdeknives.com/

---------------------------------------------------------------------------------

Hello Glen,

I've been following your blog and investing the remainder of my ancient investments (ever hear of CMGI?) from 2000 -2001, where, I must say, I lost just about every penny I ever made betting on the dotcom boom. Since last October, when I discovered your site, I've taken my remaining 1000 bucks and now have doubled it investing in your stock recommendations. That would have been nice with the original 40K, but I'll take what I can get.

Kindest regards,

David Wagner

D.A.Wagner Productions LLC

Labels: CNEH, GCI, HERO, IO, MGM, SKS, ZLC

Another Blog

A Chart

Q4 Earnings Transcript

A few quotes:

"As we noted on prior occasions, CPP participation by way of a thrift acquisition was only one of the strategic levers Genworth has considered to provide another level of capital flexibility to address unforeseen events, and the nature of that program has continued to evolve," said Michael D. Fraizer, Genworth chief executive officer. "Since Genworth's initial CPP application in November, we have made significant progress enhancing our capital levels and flexibility using various strategies including reinsurance, refinements in targeted markets, dividend reductions, risk mitigation and expense streamlining. Genworth will continue to benefit from these actions. In addition, we remain comfortable with our target of a consolidated life insurance company risk-based capital ratio of 350 percent or above for year end 2009. We ended 2008 with about $2.0 billion of capital across Genworth in excess of levels required for targeted ratings or regulatory requirements. We continue to progress in our evaluation of additional strategic opportunities ranging from selected asset sales to other governmental programs that could provide additional financial flexibility, and we will pursue these where we believe it makes sense."

Genworth will report first quarter operating results in early May and will provide additional comments as appropriate at that time.

In a related development, Genworth Financial Inc. (GNW) has decided not to participate in the TARP program, saying that its efforts to improve its financial position are working. The Journal notes that the company had few other options.

"Treasury officials told life insurers in late 2008 they could be eligible for federal assistance if they owned bank-holding companies," according to the Journal. "However, Genworth said it was informed by Treasury on Thursday that the deadline it set for approval by the Office of Thrift Supervision to become a bank-holding company wouldn't be extended."

Currently a $1.19B company with a stock price of $2.75
Looks to me like a survival PE of about 1
Also looks to me like 1/9 of Revenues
Also 0.1334 of Book value

Quick Glance, I think we have a surviver!

Now, granted, this thing isn't growing like CNO, but I'll take it! I don't think that GNW really needed this TARP money. I think it's going home and sitting on a huge quarterly earnings surprise like it's a golden egg. Odds are that if a company really needs something to survive, it's a high priority and GNW would have clawed tooth and nail to get that "oh help me, i'm drowning" TARP bailout status.

Labels: GNW

Rank: 6609 out of 66161
Score: 438.46 (+607.24)

Member Rating

90.01

(+78.61)



This begs the question --- why is CAPS set up so that I can increase my rating by 689% in 1 day?

Is this even justified?

Have I changed my strategy?

Should I have been rated this highly from the get go?

Labels: CAPS

Timothy Sykes says dump this cause it's been hyped.

A few statements I've Found:
"My firm Lebed Biz LLC has been compensated by a third-party (Maxim Capital) $20,000 cash for a one-month CHGY investor relations contract. "

"Momo Plays - Momoplays.com has been compensated by a third party the sum of 2500 dollars for a three day awareness campaign for chgy"

I don't really care about who likes what and all that valley girl jargon. I care about facts. Fact is, companies could be lying to me. That said, I'll take a walk on the wild side and list a few reasons why I like CHGY.

1. I went quarter by quarter through 2008 and saw that the sale prices were higher than 2007, but CHGY was unable to attack a these higher prices due to expansion and the olympics.

The olympics look to me to have killed $2M of revenue from the Heat Power, not to mention that their 2007 heat power numbers were hurt because of inefficiencies as 2007 was their first year of operation.

Then the whole expansion thing, what you have is CHGY holding onto it's Annual revenues because the price of coal is going bonkers.
http://indexmundi.com/commodities/?commodity=coal-australian&months=60

So, then you check the numbers.

Year Annual Production Per ton Weighted Average Price
2004 506,913 $ 10
2005 612,739 $ 24
2006 549,970 $ 24
2007 459,055 $ 25
2008 264,098 $ 58

So, you can confirm that either the company is full of SHIT, or that they actually were expanding and cutting production in 2008. Good news, the new capacity is supposedly 800,000; even though they were talking 1,200,000; and some stock blogger people are chanting 900,000,000
http://theperfectstock.blogspot.com/

So, what has happened in the stock price? http://stockcharts.com/h-sc/ui?s=chgy&p=D&yr=0&mn=9&dy=0&id=p04446711432

CRAP. I missed out on $0.06-$0.30

That's a MONSTER GAIN! What could possibly be left in this stock? After all, Tim Sykes said it was bad.

Well, this year they increased their EPS and had little to negative impact on their top line Revenues.

With the whole 60% growth in coal mining and the non-occurance of the olympics, $30M in revenues is not out of the question with a coal price of $27. But basically, if they actually expanded, I see no way that they could possibly not have Year-over-Year double digit growth unless prices get trampled. I am a believer in China's need for energy. I'll take it. And no, nobody gave me any money to write this; but if they decide to give me money --- I'll let you know.

Labels: CHGY

14 Tuition Breaking Stocks
By
Glen Bradford
You might have been like my friends and family in the past 6-months --- afraid to check the portfolio, afraid to accidently see the latest Dow Jones beatdown, full of upset stomach from a depreciating portfolio of Large Caps that your broker said were a great buy 2 years ago. You might be in a state of denial. You might be sitting 100% cash with 2-years of fallout supplies packed into your basement. I challenge you to open your eyes and go hunt with me for bargains.
What sets Super Markets apart from Stock Markets is pretty straight forward. At the Super Market, a 50%-0ff sale draws people from across the country to line up at 4am and stampede the bargains. At the Stock Market, a 50%-off sale is like a bomb threat in an airport. There are those that make gobs of money in times when the stock market is 50%-off. The trick is not looking around for the 50%-off items, because those really aren’t the bargains anymore. There are stocks that are 95%-off in a 50%-off sale. I call this the clearance aisle. These goods are selling less than their cost to make (book value). The trick here is differentiating ones that are high quality from those of lesser quality. I set my parameters fairly straight forward. The companies I buy have to be profitable and growing.
Then, the trick is continuously learning how companies can and may scam their investors. I look for indications of accounting fraud, and try to eliminate those companies from my lists. Did you know that companies can boast huge numbers year-after-year and not be making money?
Now, I’m not saying that all 14 of these companies are going to be up 300% 1 year from today. What I am saying is that by being certain that I am uncertain, I can diversify my college tuition nest egg into 14 of the cheapest discounted cash flow companies out of the 5,000 I’ve sorted through. I can also do my best to minimize my risk by knowing how to identify accounting fraud and not paying more than book value for a stock. By doing this, I am certain that I will candidly beat the market over time. Don’t believe me? That’s fine. All I can do for you is give you the opportunity. The choice is yours to take it, or leave it.
Below I’ve compiled a table of all the plays I am considering or possibly in. Mind you that I have been betting my college tuition on my advice. Some of the numbers have been adjusted by me in order to reflect my feelings on the stock itself as well as potential dilutions.
Earnings Price P/E P/B Growth Bust Target Boom Target Exchange Listed? Bottom?
cno $ 0.85 $ 1.35 1.59 0.15 16% $6.80 $13.60 1 1.0
ghii $ 0.13 $ 0.08 0.62 0.16 27% $1.04 $3.51 0 0.7
nwd $ 0.20 $ 0.17 0.85 0.13 13% $1.60 $2.60 1 0.3
caei $ 0.50 $ 1.00 2.00 1.06 25% $4.00 $12.50 1 0.5
chcg $ 0.51 $ 0.92 1.80 0.55 20% $4.08 $10.20 0 0.8
cyxn $ 0.19 $ 0.27 1.42 0.68 25% $1.52 $4.75 0 0.9
gnph $ 2.16 $ 4.95 2.29 0.54 12% $17.28 $25.92 0 0.5
opai $ 0.20 $ 0.14 0.70 0.18 30% $1.60 $6.00 0 0.5
ltus $ 0.24 $ 0.30 1.25 0.32 26% $1.92 $6.24 0 0.6
ckgt $ 0.14 $ 0.30 2.14 0.23 11% $1.12 $1.54 0 0.6
akrk $ 0.09 $ 0.19 2.11 0.35 20% $0.72 $1.80 0 0.6
fas $ 4.00 $ 7.20 1.80 0.3 15% $32.00 $60.00 1 0.7
cneh $ 0.70 $ 1.49 2.13 0.61 20% $5.60 $14.00 0.5 0.4
xing $ 0.65 $ 1.32 2 0.17 10% $7.60 $9.50 0 0.5

I also figure that I’ll outline my sentiment. I’m bullish financials that are down 85%+ in the last 3 years that are likely to survive this downturn. I’m neutral-bullish commodity prices. I’m neutral-bearish the US dollar; not because of this narrative fallacy of monetizing the US deficit, but because of the US-Treasury bubble bursting and the reversal of the “run to the dollar for safety” trend. I’m bullish emerging markets.
Disclaimer: Glen and his investors currently own cno, ghii, nwd, caei, chcg, cyxn, gnph, opai, ltus, fas, cneh. Glen and his investors intend to purchase the other stocks mentioned in this article.

Labels: CHCG, CNO, XING