The Scepticist
Small-cap, special situations, long only, oil & gas

Beating The Chinese Musical Chairs Game

Introduction: Successfully investing in US listed companies is not an obvious task. Many experienced investors got burned on Chinese RTOs, such as Rino International. Furthermore, many of these companies were delisted from US stock exchanges when caught "cooking their books" rendering their shares virtually worthless. The remaining Chinese small caps were dragged down as investor sentiment quickly turned sour. As a result, the shares of many of these enterprises are trading at a fraction of their fundamental value.

The investment case is simple: search for companies with credible financial statements and diversify over these companies. One could wonder whether the dark clouds will ever dissolve above these troubled stocks. I, for one, am convinced this will be the...

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