Nowadays when I look at a stock, I ask myself:
- If the company was legitimate, what would it be doing?
- If the company was a scam, what would it be doing?
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general investing
I will no longer say what I truly think about potentially fraudulent companies
Regulators everywhere (not just Canada) seem to have a history of going after those who expose fraud. I need to be more careful (e.g. apparently Canadian libel laws suck). So from now on, I won’t be so explicit.
I am disgusted by the BCSC
On December 19, the British Columbia Securities Commission issued a press release titled “Securities regulator alleges fraud against Silvercorp short-seller” that links to a notice of hearing. In my opinion, the notice of hearing unfairly smears Jon Richard Carnes of Alfred Little. Secondly, I believe that the claims against him are extremely weak.
There are too many short sellers
As I’ve discussed previously on this blog, there are many challenges to short selling (see “Do I recommend short selling common stock? No!“). These problems get worse as more and more short sellers pile into the same stocks.
My current thinking on mining stocks (Dec 2013)
This (long) post details my thinking on how I currently approach the industry.
Corporate waste at Baja Mining
Baja Mining has beautiful headquarters. Check out the website of the company that helped decorate it:
This is the kind of nonsense that goes on in the junior mining world.
Baja Mining is currently a penny stock. Its shares literally trade for a penny.
*Disclosure: No position.
Why would anybody want to invest in independent oil and gas?
The current situation doesn’t make a lot of sense to me. The management teams at these companies don’t give investors enough information to value the assets. I think that investors would demand such information. They should know the historical and projected decline curves of their company’s assets (for each basin the wells are in). This is very basic information that investors need to perform their due diligence.
Another way of looking at it is to examine how a private market buyer would perform due diligence. When an oil and gas company wants to sell its assets to private market buyers, it typically opens a data room. I’m sure they provide a large volume of technical data far beyond decline curve data (e.g. reservoir models, data on porosity, pressure, 3-D seismic, etc. etc.). Institutional investors and analysts simply don’t perform that level of due diligence.
