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  • Orient Paper: Loeb's Not the Right Firm for the Investigation [View article]
    Since you are anonymous - i am assuming that you are the anonymous dog on the internet you are referring to or are you just making a silly, sarcastic joke.
    I know that you would not be criticizing anyone for being anonymous when you yourself are, that would be hypocritical, which I am sure you are not.
    Jul 25, 2010. 12:25 AM | 1 Like Like |Link to Comment
  • Orient Paper: Loeb's Not the Right Firm for the Investigation [View article]
    Paul H. M.
    I find much humor and irony in the fact that you are the second poster stating people should reveal their identity and you don't reveal yours. You dispense advise without revealing your identity and yet you claim the most important thing in evaluating such advice is the person's identity. It reminds me of Douglas Hofstadter's writing's on Strange Loops.
    I have to disagree for two reasons.
    First, I would always do your own work rather than blindly trusting or relying on someone else. To the extent you rely on someone's elses work, I would trust but verify. In other words, you must evaluate the facts they present and see if they are verifiable and supportable. You must look at the reasoning to see if it makes sense or is logical.
    It makes no sense to just trust a big firm with a good reputation to give you accurate information. Usually, only a few people in that big firm do the work and those people may do high quality or low quality work and they may have integrity or they may not.
    More problematic is the large number of people who have gone broke trusting a big firm with a "good reputation". If you would like historical examples, I can provide them as they are numerous. I personally agree with Charlie Munger has a healthy skepticism of the entire accounting profession. And, of course, most people have a healthy skepticism of the entire legal profession.
    I think ONP was not successfull in refuting the allegations of Muddy Waters. I think that if Muddy Waters were incorrect, it would have been quite easy for ONP to refute their allegations with independently verifiable information. More importantly for me is the inconsistencies that ONP has had in their own SEC filings and website as well as the video evidence presented by the ONP promoters, which made ONP appear much different than the picture I imagined of them from their SEC filings and their own website.
    I would have a lot of skepticism towards anyone, regardless of their entity, who simply states they have investigated it and ONP is not fraudulent. I would need independently verifiable facts and sound reasoning. However, at this point, I think we have plenty of evidence presented to make our own sound conclusion.

    Jul 24, 2010. 07:15 PM | Likes Like |Link to Comment
  • Orient Paper: Loeb's Not the Right Firm for the Investigation [View article]
    Thank you. Your writing is very good and even more so for someone who English is not their first language.
    By the way, the ChineseCompanyAnalyst has writte postively about a Chinese smallcap company - YUII - and has reported he has a long position in it. I have no position, information, or opinion on it.
    Carson Block and Mr. Regan both as long as you can get on a Chinese company - they both own their own companies in China and live and work there.
    i have no doubt that there are plenty of very good Chinese companies. As Charlie Munger is reported to have said at Berkshire's 2010 conference, "China is setting a new record for advancement of civilization at a very rapid rate. It's fun to watch." See link at
    Also, it might be good for you that they don't allow short selling in your country. Short selling is a difficult way to make money. Mohnish Pabrai has commented persuasively on the problems with short selling as in investment strategies in articles, books and interviews. See www.grahamanddoddsvill....
    Thank you very much for your kind words and have a great weekend yourself.
    Jul 24, 2010. 12:16 PM | Likes Like |Link to Comment
  • Orient Paper: Loeb's Not the Right Firm for the Investigation [View article]
    The purpose of some short selling is to hedge your position and to limit your downside risk. This is not the purpose of all short selling. Jim Chanos has a fund where he only shorts and does so to profit, not to hedge risk. David Einhorn expects each short to be a good bet in and of itself and make a profit and does not short to hedge and limit risk, although it appears that he likes the benefit it has of smoothing out his returns.
    I have no evidence that Waldo Mushm or ChineseCompanyAnalyst shortsell to scare and create panic and benefit from it and you present none, so I can't respond to this point. As I noted in response to Dutch Trader, anyone presenting knowingly false information or information that have no basis to believe in is being unethical and, if the information is material, may be acting illegaly, whether it is done by short sellers to reduce the perceived value of hte company or whether it is done by the Company or its shareholders to inflate the value of the company.
    I believe that anyone who does such things should be investigated and prosecuted. However, in this case, it appears to me that the investigation should be into the company as I noted discrepancies in ONP's own representations in its SEC filings and on its website in one of my previous instablogs.
    Jul 24, 2010. 05:19 AM | Likes Like |Link to Comment
  • Orient Paper: Loeb's Not the Right Firm for the Investigation [View article]
    Dutch Trader;
    I and others have been talking about whether ONP was committing a fraud and you have been criticizing us as short sellers. Understand I was long ONP until Muddy Waters and my own followup caused me to believe there is extensive fraud at the company and reverse my position and sell. I then shorted ONP because I was convinced of its problems. Understand I have never shorted any company ever before.
    Your analogy is simply incorrect. When I shorted, I borrowed the shares from a broker, specifically JP Morgan, who I asked directly asked permission from and who agreed and knowingly lent them to me. I have no reason to believe that JP Morgan did not have the right to loan the shares to me. I didn't borrow the shares from some unknowing or unwilling person. If JP Morgan loaned something that wasn't theirs or that was someone elses and they had no permission or right to loan, JP Morgan has done something wrong, not me.
    Thus, to correct your analogy it would be as if my neighbor borrowed my car with my permission. Now, if I didn't have ownership of the car or the right to lend it, then I would be at fault, not my neighbor.
    The second part of your analogy about returning the car damaged or injuring others with the car is also incorrect. A short seller merely sells the shares. The short seller actually sells the shares at the highest price he can, much like a person who owns the stock does. The reason is because the short seller only profits if he buys the stock for less. Whether other people who own the stock are willing to sell it for less is up to them, not the short seller. Effectively, the short seller cannot do anything to damage the stock by short selling. Thus, a short seller cannot return stock in damaged condition; a short seller buys back the stock and returns it to the borrower, who sale price depends on the best offer of anyone who wants to buy it.
    Of course, I do agre with you that what would be descipable, unethical, and illegal is for a short seller to make false statements or allegations, without any basis, against a company to persuade people that it is worth less than it really is in order to get people to sell their stock for a lower price than it is worth. There is no dispute that this has been done by short sellers and it is obviously completely wrong. However, I don't believe this is the case with Muddy Waters, the chinese company analyst, myself, or others regarding ONP. We have just been presenting facts, reasoning and analysis. On the other hand, the response from the company and its promoters I believe does not meet the genuine criteria.
    With regards Muddy Waters, they have done their research and investigation and made many specific factual allegations. If the facts they presented are fabricated and falsified by them, I would agree with you that it would be immoral, despicable, unethical and, I believe, illegal. However, I don't believe that is the case. They have reasoned from the facts and made opinions and conclusions that is fine if they honestly believe them, even if they are wrong, but again are immoral and the rest if they don't believe them and they are falsified. I think it is relatively clear to separate the facts from their research and investigation from their opinions and conclusions, which I don't put as much weight on. They also provide extensive information so that somebody, like yourself, could go about verifying whether they presented the facts truthfully or not. ONP, in my opinion, does not do this.
    I very much appreciate your last post (not sure about the smooth talker part, though). It appears we at least have some agreement in some parts - presenting material facts that you know are not true or have no basis for believing are true is immoral and unethical (and I believe illegal) whether you are a short seller or the company or long the stock. Are remaining disagreement is that you believe that short selling is immoral, whereas I, along with the Catholic Church I think, that short selling is not immoral.
    To answer your remaining - yes, I believe short sellers short primarily to make money just as I believe that people buy stocks primarily to make money.
    Jul 24, 2010. 05:11 AM | Likes Like |Link to Comment
  • Orient Paper: Loeb's Not the Right Firm for the Investigation [View article]
    Dutch Trader:
    You haven't provided any facts, reasoning or evidence that shows short selling is immoral in anyway. You didn't respond to any of my points. Indeed, you apparently agree with me on the Roman Catholic position, so I assume you are retracting with your religious argument as well. Again, you make a conclusory statement without any evidence that 99% of short selling is illegal (nor not done responsibly or in moderation - whatever that means).
    Jul 23, 2010. 07:47 PM | Likes Like |Link to Comment
  • Orient Paper: Loeb's Not the Right Firm for the Investigation [View article]
    Dutch Trader:
    I am not sure that you are in agreement with the Catholic Church on short selling. I do not believe that the Catholic Church has ever declared or considered short selling to be immoral or any kind of sin. We can write and get the official catholic position on it if you doubt what I am saying. Certainly, many catholics, including clergy, have shorted and are shorting stocks.
    Again, I addressed your claim of negative economic and social consquences and you have not responded to my points. At this point, this is just a conclusory statement by you without support.
    As far as making a quick buck - it is much easier to lose money shorting and very hard to make money at it. Historically, people long stock do better than those that short it, so it is not generally an easy, quick buck. As far as selling something you don't own, you have borrowed it and are obigated to buy it back and return it. How is this different than a company borrowing money and giving it another company to purchase equipment to attempt to profit and then pay back the money? Is that immoral as well?
    Some forms of short-selling may be legal (currently), but legality is never a moral justification in my opinion. No amount of excuses can erase or balance out the inherent immorality of selling something that you do not own along with the negative economic and social consequences that can result from that attempt to "make a fast buck".

    Of course there are enough arguments that argue and explain that short selling can be good, some points you mentioned already.
    Jul 23, 2010. 07:22 PM | Likes Like |Link to Comment
  • Orient Paper: Loeb's Not the Right Firm for the Investigation [View article]
    Dutch Trader:
    Okay, so your point has nothing to do with ONP specifically, you just have a problem with short selling generally. I don't have a problem with short selling. I don't believe that selling short is acting counter to the person who owns the shares. In fact, if the company is really a good company, the person that owns the shares has an opportunity to buy the shares from the short seller. If the company has done so well that people will not sell except for a higher price, the owner of the shares has the opportunity to sell for a higher price when the short seller has to cover or buy back the shares.
    Most good companies make money or have cash flow to fund their operations. Raising capital is necessary for expansion - which may or may not be a good idea - or for funding current operations when those operations haven't been able to fund themselves. Economic value is not automatically created when capital is raised - it can be created or, as it often is, it can be destroyed.
    What is clearly immmoral - and I am surprised that you don't address this is a more serious fashion - is fraud by a company to transfer wealth from purchasers of its shares to themselves. Short sellers sometimes do a service is helpfing to short circuit these frauds earlier than would occur otherwise and save investors from losing money they otherwise would have lost.
    Where is your moral outrage for companies that have looted and pillaged money from their shareholders for their own gain and economic benefit? Although many capital raises have been beneficial, there have also been a great many capital raises that have stolen money from purchasers of stock, such that it is a red flag to investors to examine the capital raises for the value they have added to or detracted from the company. It is very suspicious when a company repeatedly does capital raises and is unable to fund its operations from its own earnings. Often, the company either is losing money such that it shouldn't be in business or it is looting from shareholders. In those cases, short sellers can be helpful to put an end to these practices earlier than otherwise would occur.
    Jul 23, 2010. 06:15 PM | Likes Like |Link to Comment
  • Orient Paper: Loeb's Not the Right Firm for the Investigation [View article]
    Dutch Trader:
    Again - you believe I am in the Muddy gang. You hope I don't advise clients to buy or sell Chinese Stocks as a licensed investment advisor. These are all unsubstantiated speculation or insults based on no facts or evidence that are verifiable and no reasoning from those facts or evidence. Instead, I have posted two instablogs based on the facts and evidence presented by ONP and its promoters. The first details the inconsistencies and problems with the representations of ONP itself, based on its own filings and website. The second details the problems with the videos submitted by two promoters of ONP, Doug from and Rick Pearson, writer for I appreciate comments that are based on verifiable facts and evidence and reasoning therefrom. Not unsupported statements of speculation and insults without a basis.
    Jul 23, 2010. 05:48 PM | 1 Like Like |Link to Comment
  • Orient Paper: Key Pieces of Evidence for Fraud [View article]
    some people would do anything they could to make money on a long or short position but most people wouldn't. I am concerned about your view that anyone who is short would do anything to make the price go down. Is that projection on your part because that is how you are? It is certinaly not how I am.
    The problem her is that you are not presenting any facts about ONP or reasoning based on those fats. Rather you are just speculating. Can ONP be fraudulent and bounce up? Sure. Is that a good way to invest? I doubt it.
    If ONP is actual worth more than its price, I hope it goes up and I lose money on my short. I should not make money based on the wrong analysis. However, as my posts suggest, I question that ONP is worth anything near what it claims. If I am right, I think I should do well. If I am wrong, I think I should do poorly.
    There are very good reasons for this and to have this view, even if you lose money on a trade you were wrong about. Think about it.
    Jul 23, 2010. 04:09 PM | 1 Like Like |Link to Comment
  • Orient Paper: Loeb's Not the Right Firm for the Investigation [View article]
    CSMhater: muddy waters doesn't claim that it owns stock in ONP and have never reported that it has or did.

    Willem55 and Dutch Trader and Phubaiguy: you provide no facts or information, just unsupported speculation conclusory opinions.
    Jul 23, 2010. 03:25 PM | 2 Likes Like |Link to Comment
  • Video of visit to ONP [View instapost]
    would you find it despicable if ONP and its promoters are attempting to make millions from false representations regarding the company?
    Jul 23, 2010. 03:13 PM | Likes Like |Link to Comment
  • Video of visit to ONP [View instapost]
    See my instablog for a contrary view.
    Jul 23, 2010. 03:10 PM | 1 Like Like |Link to Comment
  • Orient Paper: Loeb's Not the Right Firm for the Investigation [View article]
    Mr. Door:
    There are not anywhere near 150 employees shown in the video. Multiple security guards and dozens of employees that you reference adds up to 40 to 50 employees shown that I estimate (assuming they are actually employees and not just hired to stage for the day).
    Other than that, you don't address any of the points I raise. Alleged expansion is not necessarily a good thing - it could be used as an excuse to raise and confiscate capital instead of doing expansions. Expansions also can result in big losses of money.
    Of concern though is that expansions like this, if they are planned, should have been disclosed in SEC filings, including those for hte recent capital raise. What are they specifically planning to build, what does it cost, when will it be completed. These are questions that investors want answered because many companies have gone broke doing unwise expansions.
    I am not quick to believe anything, that is why I look at everything with a critical eye, including this video, authored by a person who is long the stock and has prior posts promoting it.
    Disclosure: short onp.
    Jul 23, 2010. 12:20 PM | 2 Likes Like |Link to Comment
  • Orient Paper: Loeb's Not the Right Firm for the Investigation [View article]

    issues with the video:

    1. Where are all the production lines?
    the video shows only 2 or 3 production lines but there are supposed to be 7 or 8 production lines. (8 according to their last 10k, 7 according to their recently changed website).

    2. Where are all the employees?
    there are only about 40 or 50 employees shown in the video but there are supposed to be 600 employees. The pictures of the grounds looks relatively vacant. Hardly any people seen. At the headquarters, only see about 1 car parked in the parking lot.

    3. What happened to the count of trucks?
    Narrator says in the beginning he was going to count the trucks going in and out but that never happns.

    4. Where is the disclosures about building plans?
    the video shows plans for building large buildings, not explained whether facilities for producing paper, does look like buildings to house people. Not aware of disclosures in SEC filings that planning to do this building. We saw the alleged plans - explain what is being built. What is the cost? When will it be completed? What is it for?

    5. Where is the information to answer the questions?
    Virtually no specific information is provided. Why no questions of the CEO.

    A video like this would be simple to do to show legitimate operations. First, show the operations by going through each step of the papermaking process, having the CEO explain in, and showing it in the video. Then show each production line, the type of paper it makes, the amount it makes each day. In the process, you should also show the hundreds and hundreds of employees.
    This was a great chance to follow up and asked questions about the issues raised by Muddy waters and others. None of them was addressed in this video.
    Take a look at as many videos or in person visits to real operating facilities while in action. Do any of them appear as barren as these?
    Finally, no offense to the narrator, but how does this guy sound to you? Does this look like a relatively barren place where they staged activity?

    Jul 23, 2010. 10:39 AM | 2 Likes Like |Link to Comment