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Red Collar Crime Wave

edited May 2011 in Off-Topic
Cautionary advice on investing in individual China Stocks. Investing in this market is best left to mutual funds, even though any funds holding Yahoo just got dinged as well.


  • The article is a bit much ("For a nation that was so economically backwards and pathetic that it could barely feed itself 15 years ago, China's executives have certainly come a long way"), but I think - and I discuss this in another thread in the off-topic forum that:

    1. It's astonishing to me to see the amount of Chinese IPOs that are shells or shell company-ish (or some degree of shady) come into this market only to get the feeling like everyone is kinda looking the other way when it becomes apparent that one company after another has some degree of accounting issue. If regulators are actively looking the other way, who or what is behind that? As I noted in the other thread, apparently one of the companies in question even rang the closing bell at the Nasdaq the other day.

    2. As I noted in the other thread in regards to the Yahoo issue, the company on the outside looking in is often the one that loses out. "But really this is the kind of stuff that happens day in and day out in China, with assets changing hands overnight for some reason. ****And somehow, it's always the Western company that loses out." (It really kinda is, it seems.)
  • ... "shell companies"
    for a second I thought you were talking about those upstanding citizens of Enron like Skilling who created shells or the U.S. companies that create shells in the Bahamas, Vanuatu, or just anywhere to avoid taxes. But then I realized, legal shells are ok?

    We should teach China how to do accounting - Citibank, Lehman brothers and all those big firms never had accounting issues.

    ****And somehow, it's always the Western company that loses out." (It really kinda is, it seems.)

    I'm starting to feel sorry for these fortune 500 companies that invest in China, we pay the CEO here a middling salary and they try to be generous with China and develop it, and for some reason China has foreign investment rules that the poor CEOs try to get around. These poor CEOs, perhaps they should get paid more for all the difficulties they have trying to circumvent the foreign investment rules and creating wonderful sweatshops for the chinese person.
  • The user and all related content has been deleted.
  • Singapore is also worth looking into.
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