Monday, July 4, 2011

Shorting Chinese RTOs is a crowded trade: time to move up the ladder. Carson Block Bloomberg Interview

Shorting Chinese RTOs has been a crowded trade. There aren't many RTOs left where the lend rate isn't usurious. So for anyone still interested in finding possible frauds in this area, it's now time to climb up the ladder. Recently I have been investigating some Chinese IPOs and I think there will be a number of interesting candidates for short sellers.  I don't think the level of fraud in these IPOs will be as toxic as the RTOs but there is definitely room for financial malfeasance.  Carson Block makes a good point that these companies have to compete for capital and sometimes that competition causes problems. Some of the companies I am currently looking at, have definitely been participants in the capital markets and that might be why their financials don't look so good to me.

Still got plenty of research to do before I publish anything, and maybe after my research I'll realize there was nothing wrong with the financials. We will see.

Here is the Carson Block interview.

If anyone knows how to contact this guy. I would love to meet/talk to him.

1 comment:

  1. Fantastic video. Interesting to see how many of the Chinese listed companies raise red flags.