It sounds like I may want to read some short reports to gain some perspective, but it probably wouldn’t be a good use of time for me. I’m at a long only covering EM/intl. There is shady stuff going on all the time, especially in EM due to higher frequency of shoddy management, but I’m not sure how relevant the above mentioned would be there. I’ll have to judge after looking through a couple. Thanks for the insight.
EM frauds are probably different – I would guess more likely to have undisclosed related party transactions and embezzlement than US frauds. There are some brazen US frauds but they rarely involve outright stealing (usually they just steal by excessively paying themselves with cash and/or very low strike options). I assume some random EM company management team might just flat out take company funds which would be difficult to see from the outside.
you want EM fraud, check out russian equities
Yah about that…
This is true. Having a good network of contacts and understanding the internal structure of managements for a given country is key for this reason exactly. Often you have pseudo-cartels/families running multiple businesses that are ostensibly unrelated. Some of these are shareholder friendly and some are not. It’s also why, in EM, I like companies with a strong dividend culture, although not necessarily a high yield. It’s much harder to lie with hard cash. If there was a way to detect fraud systematically in EM that would be great, but I don’t kow of one yet. It’s very mosaic.
The network effect happens in the US too but usually they are pump and dumps with offshore accounts for the trading as opposed to stealing hard cash. The same people do this stuff over and over again, typically stealing around $5 million at least once a cycle and then coming back when the timing is right ~7 years later. It is unclear why the SEC cannot see this or chooses to do nothing.
They’re probably too small to register. The SEC is trying to look for the next Worldcom and skipping all the small stuff.
Interesting way of looking at Apple.
Moving after earnings. I’m holding this from over 120 literally because a client wants it in their SMA. It’s suitable and not a battle I was going to pick. But seeing it in there brings amusement, often. Been a drag for sure.
Nice bump up to $103 after hours, have covered calls at $105.
If someone has to hold a S&P500 company, these guys are still it, skeptical about the other 499.