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Ben Strubel is the President and Portfolio Manager of Strubel Investment Management, LLC ("SIM") a registered investment advisor. Strubel Investment Management provides separate account management services for clients and also publishes The Value Investor's Edge Newsletter. Ben Strubel... More
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  • 10 Lessons for Investors in the Wake of the CCME Scandal: Part II

    In the first part of this article, found here, I talked about several behavioral biases investors have that keep them from recognizing fraud. I also discussed the futility of relying on auditors and institutional investors to do your research for you. In the second part of the article I want to talk about the lengths management will go to deceive investors, a few issues that are specific to Chinese companies, and the largely helpful role short sellers play in the marketplace.


    Beware the Potemkin Village

    Investors don’t seem to realize the lengths that some crooked management teams will go to defraud investors. Sometimes investors claim there is no way 20 or 50 or any large number of people could be in on a scam, but management may go to great lengths to fool investors. For example, in 1998 Enron launched Enron Energy Services, but the division wasn’t up and running yet. To fool analysts who were brought in for a tour, the company constructed a huge fake trading floor and “command center” complete with hundreds of thousands of dollars worth of computers, monitors, and phones. Secretarial staff and other employees were brought in from other floors to populate the trading floor. Enron even held a dress rehearsal the day before the analysts’ conference to ensure everything would go smoothly. As another example, take a recent article in The Atlantic about the Chinese practice of “renting” foreigners to pose as important businesspeople.


    A favorite method of those doing due diligence is to tour a company’s facilities. But does a financial analyst or average investor really have the ability to discern a fake factory, operated only for tours, from a real one operating year round? Can a financial analyst or investor tell the difference between a production line that can produce 100,000 tons a year from one that produces 50,000 tons? Does a financial analyst know what a real fertilizer factory should look like? Can an analyst tell the difference between a one-million-dollar piece of equipment and a one-hundred-thousand-dollar one? The answer to these questions for the vast majority of analysts (especially those of the eternally bullish nature) is no. The facilities need to be evaluated by an independent expert in that company’s industry for the pictures or tour of the facility to have any substantial value. Of course, that’s not to say that some companies’ deceptions may be so poorly presented even a layperson can see many red flags and problems.


    Reviewing company documents is also considered de rigueur for doing due diligence. But again are investors or analysts really in a position to discern a real bank statement from a fake one, a real commercial lease document from a fake one, or a real business license from a fake one. In most cases the answer is no.


    One of the most important things investors can do to protect themselves from the scams, shams, and flimflams of management is to insist on verifying all company-supplied information with independent third parties. Never use management-supplied contact information. Say you want to verify a company’s distributor. Get the name of the distributor. Then do your own research to find its main number and call, so you are sure you are speaking to that distributor and not an imposter. Calling the number management gave you, could connect you with anyone.


    Don’t use documents provided by the company either. Instead, attempt to verify what the company claims with an independent third party. Many businesses already do this. For example, when I opened a bank account for my business one of the documents I was required to provide was form or letter from the PA Department of State Corporation Bureau, proving the existence of my business. But the bank didn’t use that document to verify my business was legitimate. The copy of that document was only for bank files. Instead, my bank went to an independent third party, in this case, the Commonwealth of Pennsylvania and used its website to verify that my business existed and was registered correctly. There are a multitude of local, state, and federal government databases that investors can use to check up on any company’s claims. If you’re investing in a foreign country and are unaware of how to check up on management or unable to verify management’s claims, then perhaps you should stick to investing in areas where you can verify information.


    When visiting a company, show up unannounced. Many fraudulent companies put on impressive looking displays for analyst days or investor tours. Scheduling a visit ahead of time also allows a company time to prepare and make sure its window dressing is ready or to come up with a convenient excuse about why that day doesn’t suit them. Showing up unannounced gives you a much better chance to see how the company operates day in and day out and makes it far less likely you will be viewing an elaborate deception. In fact, several short sellers have staked out or visited several Chinese RTOs and found the situations there much different than what investors and analysts saw on their guided tours.


    In short, investors need to look to independent third parties to support management’s claims, and not rely on management themselves.


    Answers, Not Excuses

    You don't want another Enron? Here's your law: If a company, can't explain, in ONE SENTENCE what it does, it's illegal.” –Lewis Black


    “There was a misunderstanding…”, “We look forward to discussing…”, “The analyst never contacted our management to discuss…”, “we plan to pay a cash dividend…”, “the board authorized a share repurchase program…”


    What do most of these phrases have in common? Besides being excuses, they all use nebulous wording and refer to possible future action. Management isn’t providing any substantial data, facts, or plans. When management makes announcements, look for things that are concrete. Look for facts, numbers, and definite plans.


    Too often overly promotional management announces partnerships and cooperation agreements that amount to nothing more than good public relations. If a company is attempting to rebut a negative report, look for them to provide data that backs up its claims. If an analyst claims a company has a factory that isn’t producing any goods, management should offer proof that it is. The fact that the analyst never contacted management is irrelevant in discussing the status of the factor. Similarly, many companies announce share buyback plans or plans to pay a cash dividend in hopes of boosting their stock price or staving off short sellers. Plans are nice, but wait until the company actually buys back shares or you have the cold hard cash in your hand from the dividend before getting excited.


    Finally, although Lewis Black is just a comedian, his quote applies to investors. If management can’t offer simple explanations for something, then it’s likely they aren’t telling the whole truth. Enron claimed its business model was a “black box” that couldn’t be understood. Want to avoid another Enron? Invest only in businesses you fully understand or where management gives simple, logical explanations of how the business operates. Avoid black boxes and overly promotional management teams.

      SAIC Filings Matter (and Other Local Regulations Matter)

    One of the most contentious issues in the Chinese RTO space has been the financial information that companies in China must file with the State Administration for Industry and Commerce (NYSE:SAIC). Bulls argued that these filings do not matter, while Bears argued that they did and gave a true picture of the company’s financial condition. The truth is and always has been that the SAIC filings matter a great deal. What legitimate management team would risk having its business license revoked by not following regulations?


    As we mentioned above, it is important to consult independent sources when doing research. Many bulls have used quotes by Benjamin Wei (or Wey) of New York Global Group. However, he has been involved with many Chinese small caps that have had fatal accounting issues, and in no way can he be considered an independent expert. Instead, let’s look at what several independent sources say about SAIC filings.


    First, look at the SAIC itself. They have published a list of requirements, in English, for foreign investor enterprises. The list is available here: As you can read, audited financial statements play an important role and the penalties for noncompliance are severe, including a loss of business license(s).


    But perhaps the SAIC is lying just to frighten businesses into registering or some other nonsense. Let’s look at another truly independent source. There is a book on Chinese law published by the ABA called China Law Deskbook by James M. Zimmerman, Esq. A 2005 edition is available on and a free preview of the 2010 edition is available on Google Books. Again, in the book, the author confirms that a SAIC filing must be accurate and be prepared by Chinese CPAs.


    Finally, we can logically show that SAIC filings should be accurate by using a 2x2 payoff matrix chart. Management has two choices regarding two options: (1) they can lie to the SAIC or tell the truth; or (2) they can lie to the SEC or tell the truth. The payoff matrix below shows the result of each choice.



    Lie to SAIC

    Lie to SEC


    None. Publicly available SEC filings would show true business to all competitors and Chinese government.

    Able to steal millions of dollars from U.S. based investors.


    Fines and/or loss of business license. Short seller attacks.

    None. The SEC has no enforcement power over Chinese individuals.


    Utilizing a simple payoff matrix, it’s easy to see that management gains nothing by lying to the SAIC and also has absolutely nothing to lose by lying to the SEC.


    While the issue of SAIC filings is specific to China, there is a larger lesson for all investors. Local country regulations matter and researching public filings that companies must make in their home countries can provide a powerful way to verify if management is trustworthy.


    Undoubtedly, there are local rules and regulations that are ignored as part of the business culture in certain countries, so investors must ask themselves whether or not they want to be partners with a management that is willing to lie. The sophisticated investors in Bernie Madoff’s scam believed that Madoff generated his returns by front running his brokerage clients. They were all too happy to join him in taking advantage of others. Only later did they discover they were the real patsies and that if a person was willing to lie about one thing for his own benefit there wasn’t a limit to how far the deception could go.


    Investors would be wise to insist on investing only in companies where management follows all local rules and regulations, significant or not.


    Short Sellers Aren’t Evil

    Invariably during or in the aftermath of a scam, scandal, or fraud, management and investors always are quick to blame their predicament on some sort of evil short-selling cabal (second on the list is the equally ludicrous “lack of liquidity” excuse). But short sellers are very rarely to blame. In fact, I am unaware of the demise of any company due to a short-selling conspiracy.


    The closest thing may be the saga of Fairfax Financial. Dan Loeb’s Third Point, Jim Chanos’ Kynikos Associates, and Steven Cohen’s S.A.C. Capital, and others had shorted Fairfax Financial and began a campaign to publicly discredit Fairfax’s CEO Prem Watsa and “assist” the media and financial analysts in releasing negative reports about the company. Short sellers may have partially been vindicated when the company took a write down in 2006, but documents released as part of a lawsuit filed by Fairfax certainly show some shocking behavior by the short sellers. The truth of the situation likely won’t be known for some time as the lawsuit is ongoing. Even if the lawsuit is true and there was some sort of evil short conspiracy, it’s important to remember one thing.


    Unless a public company depends on continued access to the capital markets for its survival, there is little if anything short sellers can do to permanently impair the value of the company.


    Ben Graham famously said that in the short term the market is a voting machine but in the long term it is a weighing machine. Accusations of fraud certainly have a short-term vote but they weigh nothing. Only the company’s true cash flow has weight; if the company is committing fraud, eventually the earnings power and cash flow of the business will be revealed to be less than what was reported. If it wasn’t fraudulent then the cash flow will be revealed to be genuine and the price will reflect that over the long term. Again, look at Fairfax Financial. While the stock fell in the short term because of the short sellers’ allegations, the truth was eventually revealed and the stock price recovered.


    There is almost never any need for investors to get worked up over some mysterious evil short selling cabal. If you’re right and the facts back you up, then in time your investment will be rewarded. It’s also important to keep in mind in matters of fraud and accounting irregularities more often than not it’s the short sellers who are ultimately proven correct.


    I hope these 10 lessons can help all investors become more diligent and avoid the next CCME.


    Did you do your due diligence in reading this article? How many of you noticed there are only 9 lessons between the two parts, or did you just believe that there were 10 because that’s what the title said or I said? This is lesson 10. Always read everything carefully, twice. The only person you can trust is you; everyone else is guilty until proven innocent.

    Apr 14 12:38 PM | Link | Comment!
  • 10 Lessons for Investors in the Wake of the CCME Scandal: Part I

    I have been watching the saga surrounding Reverse Takeover (RTO) Chinese Small Cap companies with morbid fascination. Although we had and have no financial stake in any of the companies (our primary custodian, FOLIOfn, does not allow short selling and we certainly weren’t going long!) the ongoing saga highlights some powerful lessons for all investors--not just the ones caught up in Chinese RTO frauds. In the first part of this two-part series, we will look at lessons involving investor behavior and the role of auditors and large institutional investors. We can all learn from the mistakes of others. Here are 10 tips or lessons we can learn.


    Start Off Being Skeptical and Not Trusting

    Of all the behavioral biases humans have, perhaps none is more dangerous as confirmation bias. After making a decision, humans tend to seek out information that confirms that their original choice was the correct one and to ignore contradictory information. Once our opinion has formed people tend to view information or reports that confirm their decision as correct and those that don’t as wrong. Rather, we should objectively examine the new information.


    Investors should start off being skeptical of all claims that management makes and have the attitude that a company is a bad investment until proven otherwise. The first thing I do when beginning research on an investment is seek out every negative article or research report I can find on the company. I also make it a point to talk to any analyst or fund manager that has sold the company short. Only once I have gathered all the negative information on a company do I then start to think about whether all the information is true or is there is another side to the story that is worth researching.


    Social Proof Has No Place in Investing

    "You are neither right nor wrong because the crowd disagrees with you. You are right because your data and reasoning are right." –Ben Graham


    In his book Influence The Psychology of Persuasion, Dr. Robert Cialdini relates an interesting story showing just how bizarre a phenomenon like social proof can be. There was a cult in Chicago that believed aliens were coming at midnight on a certain date to take the members away from a flood that would destroy the world. On the appointed night when they gathered in the leader’s home, nothing happened. Faced with undeniable proof that their original beliefs had been incorrect, they did something that seems strange. While they had previous been relatively secretive and shunned the media and made no effort to attract recruits, they now began spreading their message in earnest. They began massive efforts to attract new recruits and regularly began contacting media outlets to spread their message. Why did they do it? They had gone too far and given up too much. They could not face the possibility that their belief was false. Many had quit their jobs and given away their life savings and possessions. To make that sacrifice seem worthwhile, the only proof left that they could muster up was social proof. That is, if they could recruit and convert many people, then they could surround themselves with others who believed as they did and could convince themselves that their sacrifices were not in vain.


    While the story may sound bizarre, it is not so different than what many investors do. While confirmation bias keeps many investors from even considering contradictory information, even when the evidence is clearly overwhelming those investors do what the cultists did. Instead of having an intelligent discussion about the substantive issues, many shareholders take to the proverbial streets, in this case internet message boards or blogs, and begin seeking more recruits.


    What should investors do instead? When the evidence becomes overwhelming that you are wrong, admit it and sell. The ending for most China RTO frauds follows the same pattern: a trading halt followed by a delisting from a major exchange before finally trading over the counter for a small fraction of the share price. But before their stocks met their end on the OTC market, many individual shareholders were faced with overwhelming evidence that they were in far over their heads. At that point they had the chance to sell with far smaller losses. Instead of admitting they were wrong, many chose to surround themselves with yes men who knew as much or less than they did.


    Be an investor not a cultist.


    If It Is Too Good to Be True, It Is

    In a business environment that is more competitive than ever due to globalization, investors should be skeptical of any company earning outsized profits or growing well above industry rates. For a company to earn outsize profits in a competitive environment, it needs some sort of durable economic advantage. Examples include Philip Morris International whose strong brand name, habitual purchases by consumers and addictive product provide a moat. Microsoft can leverage economies of scale and high switching costs for its Windows and Office franchises to earn outsize returns. High growth comes from launching new and innovative products such as Apple and its many consumer electronic hits such as the iPod, iPhone, and iPad.


    Contrast this with many of the fraudulent Chinese RTOs. They were in boring commodity businesses such as fertilizer, jewelry, industrial equipment, advertising, generic and/or eastern pharmaceutical sales that offered no competitive advantages. Management’s explanation for how the companies earned profits at three or four times industry averages were always weak and implausible. Some of the weak reasons were good cost control, good management, and various spurious special licenses or agreements.


    If a company is wildly successful according to the financial statements it files and a whole slew of competitors who are trying to emulate it fail to make similar splashes, than the company deserves very thorough scrutiny.


    Auditors Don’t Audit

     “If only 20% of financial statement users think the auditor’s opinion is worthless, it means 80% of investors are dumb.” –Sam E. Antar via Twitter


    Audits are designed to give investors reasonable assurance that the numbers reported on a financial statement are materially accurate. Audits are not designed to detect fraud, and audits are not designed to give absolute assurance that the numbers are accurate.


    The Public Company Accounting Oversight Board (PCAOB) says: “Audits typically involve testing a sampling of data and exercising judgment about audit evidence – what to collect, how much is necessary, the extent and nature of testing, and the best way to gather it. Because auditors do not examine every transaction and event, there is no guarantee that all material misstatements whether caused by error or fraud, will be detected.”


    At least the auditors decide what audit evidence to collect and test, right? Well, not so much. It is important to remember that auditors are hired and fired at the discretion of management. It’s like criminals getting to hire the police officers that are charged with catching them. And management has plenty of ways to keep auditors in line. Whether it’s the Enron approach (now mostly curtailed) of dangling lucrative consulting deals to get favorable treatment, the Crazy Eddie booze-and-schmooze approach, or just flat out hiring small incompetent or unscrupulous auditors, management has plenty of tools to keep its most complex fraud undetected for years.


    Turning to Deloitte and its audits of China MediaExpress, why didn’t Deloitte find any problems in its 2009 audit? The explanation is likely very simple: They weren’t looking for any. Only after short sellers and other parties contacted Deloitte and/or the Audit Committee and Board of Directors and told them under which rocks to look did they begin to find the problems that had been there all along.


    Finally, having a top-rated auditor doesn’t mean the financial statements shouldn’t be heavily scrutinized. While it was ludicrous to believe that tiny accounting firms based in the U.S. with less than a dozen people could conduct thorough audits of multiple Chinese companies, having a large auditor isn’t a free pass either.


    A small sampling of recent shame for some top auditors is below. The scams perpetrated and slipped past auditors run the gamut from the mundane, such as improper recognition of revenue, to the incredible, such as hiding massive amounts of off-balance-sheet liabilities or falsifying billions of dollars of cash.


    Arthur Andersen (now defunct): Enron, WorldCom, Nicor, Global Crossing

    Ernst & Young: Lehman Brothers, Anglo Irish Bank, HealthSouth

    KPMG: Allied Capital, Peregrine Systems, ImClone, Xerox

    Deloitte: Nortel, Royal Ahold, Reliant Energy

    PwC: Satyam Computer Services, AIG, Tyco

    Grant Thorton: Parmalat


    In short, neither a small two-partner shop nor a name-brand multinational auditor nor the PCAOB is going to look out for you. Only you can look out for yourself.


    Analysts and Institutional Investors Won’t Do Your Due Diligence for You Either

    Even if investors acknowledge that auditors can easily be fooled or if a firm has an auditor that is viewed as less competent than a big-name auditor, they sometimes point to other large institutional shareholders of a company and assert that “ABC company can’t be a fraud if XYZ invested in it.” With CCME, it was C.V. Starr & Co run by ex-AIG CEO Hank Greenberg that investors pointed to as proof that CCME was legitimate. Again, as with the auditors, you have no idea how much due diligence those other investors did. Did they take their position because they use a quantitative model? Did they buy the stock as part of a basket of stocks as a sector bet? Or did the big investor actually do their homework?


    In his book called Fooling Some of the People All of the Time about the fraud at Allied Capital, hedge fund manager David Einhorn relates the story of his meeting with Wasatch Advisors. Wasatch was the second largest shareholder of Allied Capital, but the portfolio manager in charge of the position had just bought the stock as part of a larger basket and had not done much investigation on Allied Capital. In many ways Wasatch was not familiar with Allied’s business.


    Oh, and let’s not forget Enron. Its 10 largest shareholders at the time of its collapse were all Wall Street’s large “smart money” managers, such as Putnam, Barclays Bank, Fidelity, and Citigroup.


    Fraudulent Chinese companies have ensnared large sophisticated investors too. Carlyle Group, the world’s second largest private equity firm, had $105M of egg on their face after they bought the fictional China Forestry Group. Publicly traded Heckmann Corporation (HEK) run by Richard Heckmann, who successfully orchestrated the roll up and sale of companies worth a total of almost $10B, was also left holding the bag for the largely fictitious $625M China Water & Drinks. And this was after five months of due diligence by Heckmann, hired consultants, and others.


    In other words, other investors--no matter how large and how purportedly sophisticated--aren’t going to do your due diligence for you. You have to be the one to research each investment thoroughly. If you can’t do that, then move on to an investment where you are able to do sufficient due diligence. Warren Buffett made a fortune investing in only what he knew. Great investment returns doesn’t mean investing in small dodgy companies in foreign countries just because they appear cheap.


    Part 2 of this series will be posted in a few days. In the meantime, below are some resources about accounting, corporate governance, and spotting fraud that you may find helpful.


    Organization Websites





    Financial Shenanigans by Howard Schilit

    Quality Financial Reporting by Paul B. W. Miller



    The Fraud Files Blog

    White Collar Fraud

    Going Concern



    Due Diligence

    Harvard Law School Forum on Corporate Governance and Regulation

    Disclosure: I am long PM, MSFT.
    Mar 31 10:16 AM | Link | 3 Comments
  • Department of Education's For-Profit Loan Repayment Raises Questions
    The Depart of Education released data about the effects some proposed rules would have on for-profit education. The release of the data has raised more questions than answers.

    Loan Repayment Rates

    What the heck is going on with the DoE’s default rate calculations? No schools have access to the raw data or database the DoE used, and the DoE used a different database than the one used to calculate cohort default rates.

    The biggest issue surrounding the data is that the DoE is not counting consolidated loans as being in repayment when no payments are made toward the principal. The allegation is that schools encourage students to consolidate loans and make interest-only payments for several years to stave off any defaults that might count against the school’s Cohort Default Rate (NYSE:CDR). This allegation is odd since the DoE’s own website encourages students to consolidate their loans. The DoE also lists benefits not directly related to reducing payments. Penalizing schools for their students doing something that the DoE encourages them to do doesn’t make sense. The new repayment rate calculations look at defaults over a longer time range and should capture more (or the rules could be altered to capture more) defaults from schools that encourage students to “kick the can” of default down the road so the logic around not counting consolidated loans as in repayment makes no sense.

    According to a special conference call held by Strayer Education, another issue is that the database is built on an older technology platform and the DoE had to bring in special contractors to write a custom application to access the data. Strayer related that the DoE itself said the process was very complicated. If the words “government contractor,” “old programming language,” and “very complicated” don’t sound like a recipe for problems, I don’t know what does.

    When Strayer calculated its own repayment rates, it brought in outside consultants to confirm that the applied mathematical methods were sound. From all that we have heard, the DoE has had no such third-party verification.

    While none of the for-profit schools came out looking good, it is interesting to see how other schools faired when the same methods were applied to them. Both Steve of and I have been following the ongoing for-profit saga. When the data was released, it appeared we both had the same idea about looking at comparable nonprofit institutions. Steve looked at schools that serve the same demographic of students as Middle Eastern Athletic Conference (MEAC) and the Southwestern Athletic Conference (SWAC), which are both composed of Historical Black Colleges and Universities (HBCU). He found that in both conferences, the schools had students with repayment rates below for-profits. Also, at nonprofit schools that Steve studied, the students’ weighted average debt was greater than at for-profits. Steve’s complete analysis can be found in his blog post at

    I looked at only the repayment rates across all HBCUs and found that the average repayment rate was 19% and the median repayment rate was 18%. All of the major public for-profit education companies had higher repayment rates than the average of the HBCUs’ repayment rates. If we used the criteria that the DoE applied to for profits and applied it to HCBUs, only 1 school out of 96 would pass the 45% hurdle. That school is University of the Virgin Islands with a repayment rate of 52%. Additionally, only four additional schools—Spelman College, Tuskegee University, Shorter College, and Hampton University—would clear or meet the 35% repayment mark. It is very clear that demographic and income differences have a huge effect on default rates.

    *Repayment data was unavailable for 8 of 104 HBCUs.

    Effect of the New Rules on Programs

    The DoE also released data on what effects the new rules would have on programs being offered in the state of Missouri. Assuming the rules are passed as is, how might school programs be affected? The DoE defines a program as a unique Classification of Instructional Programs (CIP) code offered by a unique institution.

    There are 24 separate for-profit institutions in Missouri. Of the 24, eight of them had program(s) that would fail.

    Those 24 institutions offered a total of 176 programs among them. The table below shows the breakdown of potential failed programs.

    A total of 46 or 26% of the programs would fail. Almost half the certificate programs offered would fail. With associate degrees, the total drops to 14%. With bachelor’s degrees, however, the failure rate jumps back up to 22%. There are only 23 bachelors programs in the sample size, so the small numbers could distort the data. With only five masters programs, there is not enough data to draw any meaningful conclusions about them.

    There are 15 unique CIP family codes (CIP family codes are groupings of similar programs). The following table breaks down the potential failed programs by CIP family code.

    Some families of programs do not have enough data to draw meaningful conclusions. Also, we should keep in mind that certain areas of the economy may be harder hit than others and that could impact which programs fail.

    We can tell that healthcare programs fair the best, with only 12 of 75 or 16% of them failing. The next “best” seem to be business and IT-type programs; both of which have failure rates of around one-third. The engineering technologies programs also look good with only one failure, but the sample size of 13 is small.

    The stock market’s hysteria over the imminent death of vocational two-year schools seems overblown. Certificate programs seem very hard hit, but let’s take a closer look. We will examine the healthcare field since it has the most data available (75 total programs).

    The table below shows healthcare programs by degree type and the percentage that are failing.

    As you can see, healthcare certificates make out better than associates degrees with a 14% program failure rate compared to a 21% program failure rate.

    The preliminary result of the new regulations if enacted as written is that a hodgepodge of programs across many degree types and fields of study may end. The regulations probably won’t spell the death of any particular program type or institution. Healthcare programs, where there is some of the greatest demand, should still be a strong driver of growth in the for-profit field going forward. Some other programs may have to be tweaked or have certain majors/degree levels eliminated. The wholesale disbanding of programs and institutions that the market seems to fear is unlikely. We see successful passing programs at all levels in most fields. If institutions can make the necessary academic and employment services adjustments, the for-profit industry should get through just fine. The days of sky high growth and 30 and 40 P/E multiples are likely over, but above average growth is likely not. As always, investors are wise to tread carefully when government is involved.

    Disclosure: Long COCO
    Aug 24 2:28 PM | Link | Comment!
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