TRE - Sino-forest put.

[cwericb]

Perhaps I am naive, but I still find it hard that a company as large as TRE and one that has been around for so long as it has can be a complete fraud. Surely you would have to be brave and/or stupid to go out and bet the grocery money on this - but as far as that lottery ticket is concerned even TRE probably gives you better odds of doubling your money.  :)

[given2invest]

Perhaps I am naive, but I still find it hard that a company as large as TRE and one that has been around for so long as it has can be a complete fraud. Surely you would have to be brave and/or stupid to go out and bet the grocery money on this - but as far as that lottery ticket is concerned even TRE probably gives you better odds of doubling your money.  :)

 

What about Enron?   Worldcom?   Hasn't it been proven very very very large and established companies can be rife with fraud?

 

It doesn't have to be a complete fraud for you to completely lose your money. 

 

[twacowfca]

Perhaps I am naive, but I still find it hard that a company as large as TRE and one that has been around for so long as it has can be a complete fraud. Surely you would have to be brave and/or stupid to go out and bet the grocery money on this - but as far as that lottery ticket is concerned even TRE probably gives you better odds of doubling your money.  :)

 

What about Enron?   Worldcom?   Hasn't it been proven very very very large and established companies can be rife with fraud?

 

It doesn't have to be a complete fraud for you to completely lose your money.

 

 

  Yes, and there seems to always be pocket risk investing in countries where the rule of law is not well established.  :-\

 

 

[Guest Hester]

.03%

 

That's how much of Wellington's NAV is with Sino now.

 

Appeals to institutional authority have failed every single time in this space. It hasn't mattered whether it's been the buy-side, the sell-side, or the auditors.

 

This is a complete non-event.

 

 

[cwericb]

While we criticise Chineese companies for being rife with fraud, it's almost embarrassing that we use two American companies (one of which was run by a Canadian) as examples of massive fraud.

[FFHWatcher]

"If nothing else this whole episode should be a bit of a learning experience."

 

What did you learn?

 

Ask me in a couple of months.

 

Not sure how that will change anything.   Just because this turns out to be a fraud or not a fraud, how will it make a difference next time as the situation won't be identical, no?

 

If you ask a person what he learned and he responds that he will know in a couple of months, than I personally completely agree with him.  There are only a handful of people out there that do know all the facts.  All the facts are not yet out.  You/given2invest and Hester are basically responding to every single post on this topic, it seems within 15-30 minutes of posting (what is that about, why are you two so passionate about TRE and telling everyone else they are fools?  If you think everyone else are fools, than let them be fools...you two will not change them), that it is a foregone, virtually 100% conclusion that Sino-Forest is a bogus company and a lousy investment at any price AND that everyone else, except for you two, the shorts, and Muddy Waters, are absolute fools if they think otherwise. 

 

It is impossible to say that Sino-Forest is a complete fraud and it is impossible to say that Muddy Waters is mostly correct.  The truth will come out one way or another...eventually.  Therefore, in a few months or more, when the truth is much more certain, cwericb will know whether or not his personal analysis is correct or not.  How can you confirm that you have actually learned anything without knowing the truth?

[given2invest]

"If nothing else this whole episode should be a bit of a learning experience."

 

What did you learn?

 

Ask me in a couple of months.

 

Not sure how that will change anything.   Just because this turns out to be a fraud or not a fraud, how will it make a difference next time as the situation won't be identical, no?

 

If you ask a person what he learned and he responds that he will know in a couple of months, than I personally completely agree with him.  There are only a handful of people out there that do know all the facts.  All the facts are not yet out.  You/given2invest and Hester are basically responding to every single post on this topic, it seems within 15-30 minutes of posting (what is that about, why are you two so passionate about TRE and telling everyone else they are fools?  If you think everyone else are fools, than let them be fools...you two will not change them), that it is a foregone, virtually 100% conclusion that Sino-Forest is a bogus company and a lousy investment at any price AND that everyone else, except for you two, the shorts, and Muddy Waters, are absolute fools if they think otherwise.  

 

It is impossible to say that Sino-Forest is a complete fraud and it is impossible to say that Muddy Waters is mostly correct.  The truth will come out one way or another...eventually.  Therefore, in a few months or more, when the truth is much more certain, cwericb will know whether or not his personal analysis is correct or not.  How can you confirm that you have actually learned anything without knowing the truth?

 

Whoa, relax.  I think I went a week without even posting in this thread.   Hyperbole much?  

 

Isn't the purpose of this board to exchange ideas and information and thoughts?   Would it be better if this was only a one sided conversation or if people just posted less?   You are free to not read the thread.    

 

In regards to "lessons learned", you completely misinterpreted my point.   I have no idea if this is a fraud or not and I have no idea if it will end up going back to 20.   My point is there will be little "lessons learned" here as in either situation, fraud or no fraud, you can't approach the next "short attack" and say it's going to come out exactly or even closely like this will end up.  

 

The only lesson to be learned here is if you can't do your own due diligence and prove something is legitimate after serious doubts have been raised, it's probably best to stay away.   But isn't that the first lesson in investing anyway?  Doing your own due diligence and not relying on anyone else?  

[cwericb]

Well first off, I don’t know what due diligence anyone could have done in this case. At best, right now we have a series of unsubstantiated accusations made by a biassed individual with a questionable track record. Further, the fact that some analysts have dropped coverage really only says that at this point they don’t know what is really going on either.

 

Secondly, while I have been trying to suggest that it is a bit early to climb on the “TRE is a fraud” bandwagon others seem to have their minds made up that the company has no value whatsoever and subscribe 100% to that view. Then when I say it is too early to make that decision I am accused of defending TRE - which I am not.

 

Thirdly, when it is suggested that this discussion has no place on a value investing board I have to wonder what ever happened to the theory of looking at companies that are on the wrong side of public opinion? This MAY be a classic case of that.

 

Everyone is entitled to their own opinion. I’m just surprised that some here have been so anchored in their view that TRE is a fraud that they don’t even want to consider that it might not be and that the company may have some value.

 

Yes you may be right, but don’t confuse due diligence with guesswork and rumours.

 

Furthermore, one of the points I was trying to make a couple of weeks ago was that this might be an interesting play for some small change or a bit of a flyer. I was soundly criticised for that suggestion but it is hard to ignore the fact that the share price has at least doubled since then.

[given2invest]

:bangs head against the wall:

 

I never said TRE was a fraud!  I never said TRE was a fraud!  I never said TRE was a fraud! 

 

But all we need to know about this situation is your first line:

 

Well first off, I don’t know what due diligence anyone could have done in this case.

 

And that's my only point.

[Guest Hester]

"If nothing else this whole episode should be a bit of a learning experience."

 

What did you learn?

 

Ask me in a couple of months.

 

Not sure how that will change anything.   Just because this turns out to be a fraud or not a fraud, how will it make a difference next time as the situation won't be identical, no?

 

If you ask a person what he learned and he responds that he will know in a couple of months, than I personally completely agree with him.  There are only a handful of people out there that do know all the facts.  All the facts are not yet out.  You/given2invest and Hester are basically responding to every single post on this topic, it seems within 15-30 minutes of posting (what is that about, why are you two so passionate about TRE and telling everyone else they are fools?  If you think everyone else are fools, than let them be fools...you two will not change them), that it is a foregone, virtually 100% conclusion that Sino-Forest is a bogus company and a lousy investment at any price AND that everyone else, except for you two, the shorts, and Muddy Waters, are absolute fools if they think otherwise. 

 

It is impossible to say that Sino-Forest is a complete fraud and it is impossible to say that Muddy Waters is mostly correct.  The truth will come out one way or another...eventually.  Therefore, in a few months or more, when the truth is much more certain, cwericb will know whether or not his personal analysis is correct or not.  How can you confirm that you have actually learned anything without knowing the truth?

 

If you don't like me responding to a thread I'm obviously interested in, then feel free not to read.

[Guest Hester]

1.Well first off, I don’t know what due diligence anyone could have done in this case. At best, right now we have a series of unsubstantiated accusations...

 

2.Everyone is entitled to their own opinion. I’m just surprised that some here have been so anchored in their view that TRE is a fraud that they don’t even want to consider that it might not be and that the company may have some value.

 

1.That's just a completely contradictory two sentences. You say nobody could have done due diligence, and then you say MW's claims are unsubstantiated. How could you possibly know that MW's research is bad if one can't do any due diligence???

 

2. You have a habit of setting up this straw man. I do think TRE is a fraud, but I'm not anchored to that view and would change my mind if the facts change. The problem is, you never talk about the company. The bulk of the discussion is over which firm, who has done due diligence, is "reputable." I don't care at all about appeals to authority. I don't care who is invested in TRE.

 

I won't consider TRE not being a fraud if the only argument is "XYZ" is invested or has a buy on them. I just don't care. I will consider whether or not they are a fraud if any argument is made using actual info directly about the company. Unfortunately, this thread is *very* light on debating actual info on the company, and when the subject comes up it usually dies.

 

If you have any info or facts about the company that makes you think they aren't a fraud, I would love to here it.

[cwericb]

RE... "I never said TRE was a fraud!"

given2invest  -

My comments were not specifically directed towards you, but rather the general impression given by several posters here. All I have been saying is that, IMHO, some here have been very quick to judge.

 

I have been saying that I believe that there is a reasonable chance that there is some value in TRE, but I certainly would not guarantee that. Any time you buy any company, there is a certain amount of risk involved. It is a balance of risk vs reward. There may be high risk involved here but also the potential of a good reward. Right about now as the stock is pushing towards $5.00, I'm wishing I had purchased some in the $1.30 - $1.50 range.

[cwericb]

Hester.

“1.That's just a completely contradictory two sentences. You say nobody could have done due diligence, and then you say MW's claims are unsubstantiated. How could you possibly know that MW's research is bad if one can't do any due diligence???”

 

“Contradictory?” Perhaps you should check the definition of “unsubstantiated”. Where did I say the research was bad? I said MW’s claims were as yet unsubstantiated and the source of the report had reason to be biassed. If, eventually those claims are substantiated, then we will know where we stand.  There is no contradiction in what I said.

 

“If you have any info or facts about the company that makes you think they aren't a fraud, I would love to here it.”

What facts do you have that the company is a fraud?

 

As far as this ongoing debate is concerned my position has been relatively simple and straightforward from the start.

1. I don’t see any proof at this point that TRE is, or is not a fraud.

2. Mr. Block has a questionable reputation and has a vested interest in publishing negative views on the company and therefore his report needs to be verified before being accepted as fact.

3. The fact that the stock price dropped from the $25 range to $1.29 makes me wonder if people may be over reacting and even if there is some truth to blocks report there may still be value in the company.

4. IF there is some, or a lot, of value in the company than a good opportunity may have been missed as people have not looked at it objectively and quickly accepted the the negative views that have been circulated.

 

And finally...

“The problem is, you never talk about the company.”

Partially correct. My point has been to question why some are so quick to accept the negative views on this (or any) company - especially considering the source - and immediately believe they are a fraud when there are yet to be verified facts to support that conclusion. 

 

Surely I have explained the above enough times.

[Parsad]

Folks,

 

The fact is that due diligence on this company outside of examining the financials and making some phone calls, is out of the realm of the average investor.  MW spent probably hundreds of thousands to employ a team to dig for answers.  Even then, their answers may be incorrect after spending that much money, since the common practices for legal filings, claims, etc. vary from province to province, city to city, village to village. 

 

This is in the too hard pile!  There are much easier ways to double your money right here in North America.  So everyone let it go, and let's just watch what unfolds.  I just want someone to get their come uppance...be it TRE or MW.  Cheers!

[cwericb]

"I just want someone to get their come uppance...be it TRE or MW."

 

Now THAT I agree with 100%. There is little enough accountability in the markets.

[libor.plus1]

Wow... umm. Sino forest postponed the analyst tour for their forests... the excuses they give are bullshit. This is really not a good sign.

 

http://www.theglobeandmail.com/globe-investor/sinoforest/sino-forest-delays-analysts-china-trip/article2088146/

[given2invest]

so unbelievably sketchy

 

[cwericb]

 

“Wow... umm. Sino forest postponed the analyst tour for their forests... the excuses they give are bullshit. This is really not a good sign.”

 

So Sino cancels the tour as they have something to hide? But if you read the story it plainly says.....

 

“Analysts confirmed that they advised the company to postpone the trip because it wouldn’t be helpful.”

 

So to be balanced, it was Sino’s tour, therefore only Sino could postpone it. However, it was the invited analysts that asked that the tour be delayed. It is a little misleading to suggest that Sino is doing it because they have something to hide. The analysts reasonably felt that it would make more sense to do a tour after the audit. Once that is in we should have a better idea of what is going on.

[given2invest]

 

“Wow... umm. Sino forest postponed the analyst tour for their forests... the excuses they give are bullshit. This is really not a good sign.”

 

So Sino cancels the tour as they have something to hide? But if you read the story it plainly says.....

 

“Analysts confirmed that they advised the company to postpone the trip because it wouldn’t be helpful.”

 

So to be balanced, it was Sino’s tour, therefore only Sino could postpone it. However, it was the invited analysts that asked that the tour be delayed. It is a little misleading to suggest that Sino is doing it because they have something to hide. The analysts reasonably felt that it would make more sense to do a tour after the audit. Once that is in we should have a better idea of what is going on.

 

Yah, a company that is under the suspicion of massive fraud should certainly have their press releases taken at face value. 

[libor.plus1]

 

“Wow... umm. Sino forest postponed the analyst tour for their forests... the excuses they give are bullshit. This is really not a good sign.”

 

So Sino cancels the tour as they have something to hide? But if you read the story it plainly says.....

 

“Analysts confirmed that they advised the company to postpone the trip because it wouldn’t be helpful.”

 

So to be balanced, it was Sino’s tour, therefore only Sino could postpone it. However, it was the invited analysts that asked that the tour be delayed. It is a little misleading to suggest that Sino is doing it because they have something to hide. The analysts reasonably felt that it would make more sense to do a tour after the audit. Once that is in we should have a better idea of what is going on.

 

Let's just suspend belief for a moment, regardless of what side you're on.

 

The analysts have previously stated that they dropped coverage because of a lack of information. Now consider yourself an analyst. You have 5+ years and your reputation on the line. You don't know what's true and not. Are you really going to say "meh, I don't really see a point in this tour until the report is done..." or are you going to jump at the chance to see with your own eyes wtf is going on?

 

Know this like you would know to pull out of a girl who isn't on the pill: If you are accused of a fraud of this magnitude, you would do everything in your power to provide proof that you are legitimate. If this means that the analysts want Poyry there, you will make it happen. If that means the you dont sleep for a few days so you have more time to meet with PwC and tour with the analysts, you will make it happen. If that means firing the lawyers who apparently advised you a buyback is a bad idea, giving information to analysts on a tour is a bad idea, and keeping quiet is a good idea, then you fire the lawyers. Whatever it takes to make sure the analysts feel a  tour is worth their time and makes it happens.

 

 

 

[lessthaniv]

 

“Wow... umm. Sino forest postponed the analyst tour for their forests... the excuses they give are bullshit. This is really not a good sign.”

 

So Sino cancels the tour as they have something to hide? But if you read the story it plainly says.....

 

“Analysts confirmed that they advised the company to postpone the trip because it wouldn’t be helpful.”

 

So to be balanced, it was Sino’s tour, therefore only Sino could postpone it. However, it was the invited analysts that asked that the tour be delayed. It is a little misleading to suggest that Sino is doing it because they have something to hide. The analysts reasonably felt that it would make more sense to do a tour after the audit. Once that is in we should have a better idea of what is going on.

 

Yah, a company that is under the suspicion of massive fraud should certainly have their press releases taken at face value.   

 

 

It's not coming from the company's mouth, it's coming from the analysts mouth.

 

http://www.theglobeandmail.com/globe-investor/sinoforest/for-sino-forest-watchers-the-chinese-tour-must-wait/article2088146/

 

From the article:

 

"Analysts confirmed that they advised the company to postpone the trip because it wouldn’t be helpful."

Stephen Atkinson, an analyst at BMO Nesbitt Burns who covers Sino-Forest, agreed with that assessment. “Basically, for the trip to be worthwhile, the analysts really need to meet the auditors involved, as well as [Poyry, the company that did a valuation of its forest land]. At the moment, these people wouldn’t be available,” he said.

 

“I and other analysts said ‘No, we’re better off to wait and do everything all at once, rather than go there, get a bit of information and then go back again,’” Mr. Atkinson said.

 

But don't let the facts get in the way ...

 

[lessthaniv]

 

“Wow... umm. Sino forest postponed the analyst tour for their forests... the excuses they give are bullshit. This is really not a good sign.”

 

So Sino cancels the tour as they have something to hide? But if you read the story it plainly says.....

 

“Analysts confirmed that they advised the company to postpone the trip because it wouldn’t be helpful.”

 

So to be balanced, it was Sino’s tour, therefore only Sino could postpone it. However, it was the invited analysts that asked that the tour be delayed. It is a little misleading to suggest that Sino is doing it because they have something to hide. The analysts reasonably felt that it would make more sense to do a tour after the audit. Once that is in we should have a better idea of what is going on.

 

Let's just suspend belief for a moment, regardless of what side you're on.

 

The analysts have previously stated that they dropped coverage because of a lack of information. Now consider yourself an analyst. You have 5+ years and your reputation on the line. You don't know what's true and not. Are you really going to say "meh, I don't really see a point in this tour until the report is done..." or are you going to jump at the chance to see with your own eyes wtf is going on?

 

Know this like you would know to pull out of a girl who isn't on the pill: If you are accused of a fraud of this magnitude, you would do everything in your power to provide proof that you are legitimate. If this means that the analysts want Poyry there, you will make it happen. If that means the you dont sleep for a few days so you have more time to meet with PwC and tour with the analysts, you will make it happen. If that means firing the lawyers who apparently advised you a buyback is a bad idea, giving information to analysts on a tour is a bad idea, and keeping quiet is a good idea, then you fire the lawyers. Whatever it takes to make sure the analysts feel a  tour is worth their time and makes it happens.

 

Boy, this just keeps getting better. See my post directly above  ???

[cwericb]

Yeah, and while I was writing this the above similar posts were made, anyway....

 

“Yah, a company that is under the suspicion of massive fraud should certainly have their press releases taken at face value.”

 

1) Note your own word “suspicion”.  I’d hate to see some of you guys on a jury.

2) If you actually read the article rather than jumping to conclusions you would know:

   a) The analysts asked for the tour to be postponed, not Sino.

   b) It was a Globe & Mail Article, not a Sino press release.

   c) They did their own DD:   "Stephen Atkinson, an analyst at BMO Nesbitt Burns who covers Sino-Forest, agreed with that assessment. “Basically, for the trip to be worthwhile, the analysts really need to meet the auditors involved, as well as [Poyry, the company that did a valuation of its forest land]. At the moment, these people wouldn’t be available,” he said. "

3) You guys have obviously jumped to the conclusion TRE is a massive fraud and now are trying to twist the facts to support your preconceived position.

4) Sino may or may not be a fraud, but you certainly don’t have any facts to prove it.

[cwericb]

Seriously. Are you guys shorting this stock??

[given2invest]

 

“Wow... umm. Sino forest postponed the analyst tour for their forests... the excuses they give are bullshit. This is really not a good sign.”

 

So Sino cancels the tour as they have something to hide? But if you read the story it plainly says.....

 

“Analysts confirmed that they advised the company to postpone the trip because it wouldn’t be helpful.”

 

So to be balanced, it was Sino’s tour, therefore only Sino could postpone it. However, it was the invited analysts that asked that the tour be delayed. It is a little misleading to suggest that Sino is doing it because they have something to hide. The analysts reasonably felt that it would make more sense to do a tour after the audit. Once that is in we should have a better idea of what is going on.

 

Yah, a company that is under the suspicion of massive fraud should certainly have their press releases taken at face value.   

 

 

It's not coming from the company's mouth, it's coming from the analysts mouth.

 

http://www.theglobeandmail.com/globe-investor/sinoforest/for-sino-forest-watchers-the-chinese-tour-must-wait/article2088146/

 

From the article:

 

"Analysts confirmed that they advised the company to postpone the trip because it wouldn’t be helpful."

Stephen Atkinson, an analyst at BMO Nesbitt Burns who covers Sino-Forest, agreed with that assessment. “Basically, for the trip to be worthwhile, the analysts really need to meet the auditors involved, as well as [Poyry, the company that did a valuation of its forest land]. At the moment, these people wouldn’t be available,” he said.

 

“I and other analysts said ‘No, we’re better off to wait and do everything all at once, rather than go there, get a bit of information and then go back again,’” Mr. Atkinson said.

 

But don't let the facts get in the way ...

 

 

I'm not involved in TRE one way or the other.  I have never been short it and I have never been long it.   That being said, I didn't see that news article.