Glen Doth Know

Tommy,

Glad someone looks through my notes. I just added this to my to-do list --- which is currently 7 companies long.

My dad ran a business called ARM Computing for 15 years. I am just carrying on the legacy.

A couple things:

1. Your notes reflect that you dig deep enough and that you have a sense of what you are looking for. That's a plus.
2. If I had any advice, or a cautionary statement --- make sure you never get caught up in 1 company and try to continue to prove that it is a good value. Always be nimble and always be comparing that which you are invested in to that which you could be invested in. If you like another opportunity better. Switch.

A couple similar companies off the top of my head that you might be interested in/familiar with

oil
Cneh, lpih, I think snen too. (snen is not a buy for me, but it's interesting)

Coal:

Sclx, chgy, pudc

Anyway, I'm sure there are more. The bottom line: Find the best way to allocate your money so that you are the most confident that you will not lose. I can't emphasize that enough. By doing that, with that mindset, you should do fine. The trick is figuring out what not to own instead of wasting lots of time evaluating 1 single potential opportunity. I call this relative valuation.

Maybe I have no idea what I'm talking about, but empirical evidence suggests otherwise,

Glen

-----Original Message-----
From: Tommy Gallagher [mailto:thomasmgal
Sent: Monday, June 01, 2009 9:51 PM
To: Bradford, Glen Richard
Subject: Re: CCGY

Hey Glen - congrats on getting the hedge fund started up. I wish you
luck. Does the ARM name have any significance? How'd you come up with
it?

A stock I came across tonight is CCGY - China Clean energy. Looks
like it may have bottomed in early March at .10 cents. With the
increase in diesel margins today of 8% and their new facility coming
online in September - this may be decent bargain. Their earnings
weren't impressive for last year or the first quarter. I didn't see
this in any of your round robins and was wondering if you've looked
into this stock at all. At 20 cents its pretty inviting. they were
initially on the docket to present at the china rising conference, but
they didn't. I'm not sure why Glass half empty - i should stay away,
there is a bad reason why they didn't present, couldnt get their act
together, were disinvited etc...glass half full - too much going on
with the economy, not enough time, another, some other benign reason
and now not everybody knows about this stock yet since it didn't
present and its an opportunity.

looks like it is getting some notice with 175k volume today.

Below is the link to the china conference website showing they were
originally scheduled to present and a piece of their quarter
filing...let me know what you think.

Thanks,

Tommy


http://www.chinarisingconference.com/news/news20090416.html

Labels: ccgy, CHGY, CNEH, lpih, PUDC, sclx

Anthracite Capital is Reinflating
By
Glen Bradford
Instead of talking about finance institutions that are being diluted like Citigroup (C) and financial institutions that are so hot they’re already above their November lows like Wells Fargo (WFC) and Goldman Sachs (GS), I’m going to introduce you to a better place where it’s bottoms up from here.
After getting the wind knocked out of it, Anthracite Capital shows signs of life. Granted that the price has probably exploded higher from $0.74 by the time this article gets published, let us use it at a baseline. What do we know about Anthracite at $0.74?
1. Anthracite is trading at a P/E of 0.487 if you knock out the Q4 2008 earnings nightmare and look back 1 year from Q3. The reason I took out Q4 is because the loss claimed appears to be a one-time huge write off, followed by positive earnings the next quarter.
2. Anthracite Capital is trading at a book value of 0.1.
3. Anthracite Capital is traded on the New York Stock Exchange. Let me repeat. This is a company cheaper than the listing requirements on the New York Stock Exchange. It either increases in price or eventually gets delisted.
All of these figures indicate that Anthracite is priced for bankruptcy. Where’s the good news?
1. They have pushed back the disaster twice already and have been in talks to resolve the issue. If I know anything about creditors, the last thing they want to do is run their debtors into the ground.
2. Anthracite was profitable in Q1 2009, just not as profitable as it used to be. If you optimistically flat line the profit figures from Q1 2009 into the future, your P/E is still 0.685. Note that Q1 of 2008’s Net Income Applicable to Common Shareholders is twice as large of that of any quarter as far back as I can see. So, comparing Q1 2009 to Q1 2008 isn’t fair to begin with. The bottom line here is that comparing the income of Q1 2009 to Anthracite’s history --- things match up but the revenues are weaker.
So, what am I doing about it? I’m buying. I probably already have a sizeable position. I’d say you could add this to my suggestions for 100% in 1 month, but that would be an understatement. I’d be surprised if AHR didn’t see $2 by June 18th.
Disclosure: Glen and his investors own AHR.


Title ideas: China: Harder, Better, Faster, Smaller
China: Go Small Or Go Home
By
Glen Bradford
Cramer’s a buyer of Bucyrus. I’ve been a fan of Bucyrus since I came across it in late August 2008. Back then, I grabbed the coattails of the top of the roller coaster and rode it down from $67 to $62. If I liked it then, imagine how much I like it now at $23, on its way back up. Up over 100% from its low, why is this growing company trading so cheaply with a P/E of 6.86? I’ve got one idea. Opportunity cost. If you want to play china the right way right now, you have to start small and work your way up to see the big picture.
Bucyrus makes the mining equipment. Let’s take a look at some folks that may use this kind of equipment and are trading at a discount to Bucyrus. To set the stage, Bucyrus has a P/E of 6.8 and is selling at 1.7x Book Value. Let’s look at some undervalued Oil and Coal ideas that are all less than half as expensive as Bucyrus with respect to both metrics.
1. Puda Coal (PUDC) is being featured at the China Rising Investment Conference today and is set to run from 10:00-10:30am. Puda Coal is a supplier of metallurgical coking coal to the industrial sector in the PRC. They are currently in the process of vertically integrating their supply chain. Goldman Sachs just upgraded the entire coal industry. The reason for upgrading the industry is mostly due to China. Looking at these numbers, I’m going to agree with Goldman.
2. Longwei Petroleum Investment Holdings (LPIH) is one of the leading diesel, gasoline, fuel oil and solvent oil distributors/wholesalers in Taiyuan City, Shanxi Province, P.R. China. Do note that they’re expansion is being financed through their working capital. Bank loans in China have been unbearably tough to get this last year --- so this is a strong point.
3. China North East Petroleum (CNEH) is engaged in the exploration and production of crude oil in Northern China. They just signed a contract to drill another 48 wells in the next 10 months, taking their total to 303 after the project is completed. Crunch the numbers and that’s 18% growth in production in 10 months.
4. Now, I would outline the advantages of China Energy (CHGY), but I did that 2 weeks ago. Instead I’ll give you a bonus pick that’s American. Crimson Exploration (CXPO) is even less than half of half as expensive by both metrics as Bucyrus. They are an independent natural gas and crude oil company engaged primarily in the United States, Gulf Coast and South Texas regions.
Now, I’m not telling you that you’re not likely to make a lot of money on Bucyrus right now. What I’m saying is that if you have two opportunities, and one of them is more likely to return more money than the other --- it would make sense to buy into the one with better returns, right? That said, Bucyrus in my opinion is definitely worth more in the long run. It’s trading less than its backlog and that’s pretty much sinful.
Disclaimer: Glen and his investors own LPIH, PUDC, CNEH, CHGY, CXPO.

Labels: ahr, C, CHGY, CNEH, cxpo, lpih, PUDC

Ahh the macro view.

I had an interesting conversation with a private equity analyst at Blackstone last month, his basic thesis was that commodity export dependent and goods export dependent economies are basically a form of leveraged economy and will run up the most during this recovery.

The US manufactures guns, no butter, and some MTV. No leverage.

They talk about the BRIC's, but it's really the IC's, Brazil and especially Russia are not in the same league as China and India, which have simply plowed through this recession without much of a whimper, and China's economy is much more commodity export and goods export dependent than India's, which seems to be service based.

One play I have now are 'triple happiness' stocks, e.g. PetroChina and China North East Petroleum, which have:

1) large reserve value increases due to dollar increase per bbl as the dollar devalues and demand picks up, reinflating per bbl oil prices

2) large cashflow increases due to dollar increase per bbl as the dollar devalues and demand picks up, reinflating per bbl oil prices

3) tremendous organic growth funded via assets which throw off gobs of cash

I sold off PTR and placed most of it into CNEH at the start of the month and it's produced a handsome return, but no sense looking a gift horse in the mouth, I need to diversify into some other China plays. Hence the screen.

-Gene


On Sat, May 9, 2009 at 5:00 PM, Bradford, Glen Richard wrote:
I agree.

Dumb money is what makes the stock market go so low and so high. We are on the upswing. Look to the VIX when the S&P is down, when both were down, I started loading up. The bottom was in.

I agree with all the money on the sidelines not sitting there much longer. Where is it going? USA Stocks or foreign stocks?

Last time I checked (like 4 months ago) the deals aren’t here. The money and exchange rates are looking good in eastern Europe and places where commodity exports are leading GDP drivers.

Only number crunch when you have to. If you want to know about dryshipping, just go visit a big boat yard and ask around if the jobs are good and see if ships are moving.

Glen

From: Eugene Franco [mailto:efranc]
Sent: Saturday, May 09, 2009 4:43 PM
To: Bradford, Glen Richard
Subject: Re: EMH and Chinese Small Caps

mutual fund follow on*
On Sat, May 9, 2009 at 4:42 PM, Eugene Franco wrote:
Since you like data crunching and your resume lists quite an array of programming and statistical knowledge, maybe you'd find this data fun to play with:

http://www.ici.org/stats/mf/index.html

The two most interesting pieces I've been looking at are the mutual fund money flows, and the money market assets.

One can see a clear flight to safety with MMA Gov't assets soaring 70% or $600 Billion from August 2008 to March 2009, massive dry powder.

The data indicates the dry powder is starting to be ignited, with $120B total drop in MMA assets of which $100B is MMA Gov't, but it would appear that ~80% of the dry powder is still remaining.

What's interesting is that most of this seems to be going directly into stocks, rather than heading into mutual funds, which have only seen $15B net inflows the past month.

So methinks this run up driven by hedge funds and retail traders that are pulling cash out of MMA, and that there will soon be a follow on as people reallocate their 401(k)'s back to stocks (dumb money).

Thoughts?

On Sat, May 9, 2009 at 3:51 PM, Eugene Franco wrote:
In HS to win stock competitions I just used two opposite high alpha portfolios.

Porfolio A has 10 highest alpha stocks.
Portfolio B is short 10 highest alpha stocks.

That was my temporary solution to the Kobayashi Maru, hahaha. Of course it doesn't work in real life, just silly high school stock competitions.

Eugene

On Sat, May 9, 2009 at 3:46 PM, Bradford, Glen Richard wrote:
Yeah,

Too bad they wouldn’t remove my first 2 weeks of trades. I was just putting stuff in and out to see how easy CAPS was to use.

Oh well,

Glen

From: Eugene Franco [mailto:efranc
Sent: Saturday, May 09, 2009 3:43 PM

To: Bradford, Glen Richard
Subject: Re: EMH and Chinese Small Caps

amen.

btw, nice caps rating!

Ahh.... overheating is an old friend..in high school I ran a P4 with a refrigeration unit (it sat under the desktop, I kid you not) so I could overclock it. In college my desktop used to crash from running backtesting on years worth of data, I would have to run the backtests at night when the dorm room was cooler and pray in my sleep that the test would run to completion.

I ended up upgrading to a dual core pc, my time was worth more than the $800 for a new desktop.

A touchscreen, sounds exciting, not sure I see the connection to operations research stock market software. What will the software do?

-Eugene
On Sat, May 9, 2009 at 2:24 PM, Bradford, Glen Richard wrote:
Gene,

Not a big deal. It’s not malware. It’s overheating. Plus, I use computers about 10x harder than your average user. Granted, I’m not doing autocad --- but I’m always downloading and analyzing large quantities of data.

Good news is I’m getting a touchscreen and I’ve wanted to write some operations research stock market software so that I can use that to its full capacity.

Glen.

From: Eugene Franco
Sent: Saturday, May 09, 2009 2:19 PM
To: Bradford, Glen Richard
Subject: Re: EMH and Chinese Small Caps

Oh no, I hope it isn't too serious of a crsh.

I had my computer taken over by malware in January, which is amusing considering I run 2 antivirus programs, and don't download garbage. The malware programmers are becoming better, they now block updates from anti-virus sites, block the anti-virus programs from running, lock the files to prevent them from being deleted, and prevent reboots into safemode.

After spending the weekend dealing with that I now have no fewer than 3 anti-malware guards and 2 anti-virus programs running, it's really getting outrageously ridiculous for windows xp.

Take care,
Gene
On Sat, May 9, 2009 at 1:53 PM, Bradford, Glen Richard wrote:
Eugene,
Glad you’re thinking. I agree with your X, Y, Z concept. My adjustment to it would be that that time Z would also include an environment that doesn’t change. Since the environment is constantly changing, the stock market is kind of a lagging indicator. There’s all sorts of inefficiencies.

Great! I love lists. My computer crashed www.glenbradford.com/blog I’ll let you know when I get things back up and running.

Glen

From: Eugene Franco
Sent: Friday, May 08, 2009 8:38 PM
To: gbradfo
Subject: EMH and Chinese Small Caps

Hey Glen,

Enjoyed your post on EMH on your blog and your articles on Seeking Alpha.

I had the EMH debate with a friend at Goldman Sachs FICC, the conclusion we came to is that for EMH to hold true one needs sufficient players X and freely available information for all parties Y, and these would eventually be reached given enough time Z.

I've been hand screening the universe of Chinese micro caps, and am curious what fields you use for your personal screen (i've weeded 700 down to ~30, but I am having trouble weeding the list down further). The screen results are attached. I'm currently long CNEH, but I'm looking to diversify my position with some investments in unrelated industries before I add leverage.

Take care,
Gene

Labels: CNEH, lpih

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