Hey everyone, been busy at work, what's going on...:-)
It took me a while to sort through all the hysteria in the 100+ messages, but I caught some running themes that led me to wonder some stuff.
I read the blog bash and saw a lot about "careful investigation" and "we uncovered," but what makes their statements more credible than the 10K statements which, by the way, must follow US rules, irrespective of their business being in China? Considering that Chris whatever, the author works for Cuban, who owns the blog site and had a short position, doesn't it lead some people to question the value of the information? It did me.
Is this the first time someone tried to hide ownership in a particular company? I mean, even W. Buffett doesn't go online and report every purchase the minute it is made. You can bet if I was the CEO I would get as many of my family members in as wanted in. Does that make me unscrupulous? And while we are on this topic, who owns Exxon or Target, or GE? I don't know, and I really don't care either.
Big volatility in a small company that came on the heals of insider selling. Big surprise. The stock doesn't appear to have tanked on those sales, but on the blog which was likely motivated by secondary gain. That holier than thou condescending attitude seeping through the email response that was posted in no way makes me more confident in the intent of the author. I don't see him, or anyone else posting "investigative results" for "free" on the internet as engaging in any type of altruistic, saintly, activity.
TMF response, or lack thereof....man if I have to hear this argument one more time after a stock tanks, I'm gonna have to start drinking.....more. These guys are pretty forthcoming with the information they uncover on companies, but they don't pick them with a crystal ball. Nothing in the Bill Mann article appears to be wrong just because the price dropped. Especially considering the activities that have occurred around the price drop.
Concern over the information uncovered in the blog is true because the company is in China...come on man, when was the last time that unethical, foreign CEO behavior brought down the US economy or bankrupt a retirement fund. I can't think of any, wait, the subprime mortgage crisis, nope that was American companies....oh yeah the dot com, oh no, that was American companies, I got it, the S&L scandal. Nope wrong again, more American companies....Hell we can't even trust our president, or the last president, or even the one before that....We are talking about degrees of truthiness (wow, I never thought I would ever work that word into a sentence). You can't trust any American company any more than you can any foreign company. You don't ever know the whole story, and if they took all the unscrupulous, slimy, unethical people out of business, Wall Street, and politics, the unemployment in this country would bankrupt us (oh wait the war is already doing that, but I'm sure Halliburton miss-billed the United States Military by accident).
Finally, Brian Lin's credentials based on his prior business experience. Last I checked that moron that got paid huge bling to run Home Depot into the ground was just hired to run Chrysler...Hey why not, there has to be some similarity between retail home improvement and auto manufacturing.....
So what do we know about CFSG?
1. Formed in a reverse merger with a shell company to facilitate access to the American market. A common activity in recent history.
2. Produces fire security systems in an essentially closed market with strong patriotic benefits.
3. Discloses financials on a quarterly basis in compliance with United States requirements.
4. Has given us positive growth in recent quarters with evidence that business should continue to move forward in the future.
5. May actually be expanding into foreign markets.
6. Has shareholders that are probably already rich and trying to hide their ownership stake.
7. Stock investment firm staff all coming away from repeat visits to CFSG corporate headquarters with positive views of the company (Bill Mann and multiple companies that have reiterated buy recommendations).
Calm down folks, the company really does exist. They have a real factory and a real product and a real business plan. We complain when there isn't enough insider ownership, then complain when there is too much, then complain when insiders sell, then complain when they own too much or hide their ownership. You have to decide what information you believe, what is hog wash, and what the company potential is going forward. i have not averaged down yet, but I have no concern about holding my position right now either. One man's word, connected to a billionaire (who I am sure is ethical, how else would he be a billionaire) doesn't change my investment thesis. The issues, if true, raise my eyebrows, but I have heard enough "the sky is falling" followed by "we are full solvent and have plenty of money to honor our financial demands" to try and think through this objectively. If I had seen the price drop to 4.00, i might have tried to catch this falling knife. After the run-up today, I would be very happy. But right now the previous cuts have yet to heal, so I am keeping my hands in my pocket.
Gotta go, ta ta for now....Psycho
P.S. Don't make investment decisions bases on my statements, I am long CFSG (100 shares). And I promise not to sell until the company goes to zero, or corrects their unethical shenanigans (wow never thought I would get that word into a sentence either, what a day). :-)
Hey everyone, been busy at work, what's going on...:-)