Rubberman

Fund Manager Peter Siris Spots Gold in China

Finally lets look at he receivables over the next couple of quarters and see how they change. The one risk factor I see here is there is a chance of a higher default rate this year do to weather related conditions. However, this company was one that was singled out as a company that could prosper because of the disaster. I am not sold on that idea, but who am I but a guy posting on Labor Day weekend when I sould be fishing!

Fund Manager Peter Siris Spots Gold in China

It is normal in China for accounts receivable to be both high and long. Why? Let's take CAGC for example. My question to PNIN is did you read the entire filing before posting? I ask that sincerly as I asked the company the same question. Guess what? They extend the farmers credit when they purchase fertalizer and get paid after the crops have been harvested and sold. My grandfather owned a chain of Hareware stores in west Texas and did the same thing for the farmers there. He knew he didn't have a chance of selling a new refrigerator or a new aything for that matter, because the farmers had no money during planting season. They had expenses like, irrigation, machinary, the crews that worked and had to help plant, fuel, not too mention the seed and fertilizer itself. He extended them credit until their crops came in. He had less than 1% default rate. Please look at the filing again for both companies and see what the default rate is. Then compare to a US company in the same business that is public and post which of the two has the largest default rate. It would be a great excersize for anyone wanting to know customary business practices in China. We Americans could learn a few things from these old time philosophies.