I don’t think that these are great trades but they are ones that I have made.
CF (CF Industries) long: I am terrible at predicting commodity prices so this was never a high conviction idea for me. It’s gone up by around a fifth and I will take my profits.
BBRY (Blackberry) short: I figure that now is a reasonable time to cover. I have no idea if Prem Watsa will succeed in taking Blackberry private at $9, though it doesn’t seem like he is putting up any of Fairfax’s money.
CGA (China Green Agriculture) short: While I don’t know if this company is a scam, I am betting on a high probability of the company being a scam. This SA article has very interesting photos of the company’s “operating” business.
CNIT (China Information Technology) short: I don’t have any special insight on this company. The stock may be going through a short squeeze right now.
While almost all Chinese reverse mergers are probably frauds, not all of the frauds are going to 0. Some have been taken over by private equity (HRBN, FMCN, etc.). You also need to be careful about other short sellers. Many Chinese reverse merger stocks have an icky borrow situation. As well, this has been a terrible year for short sellers as some crowded shorts have skyrocketed. There may be short covering activity relating to funds redemptions. While there is a shockingly high amount of fraud relating to Chinese reverse mergers, I doubt it will be easy money.