GlobalSpeculation.com
Bargain hunting for the sport

My computer’s been down, I’ve gotten a lot of emails asking my thoughts on particular stocks. Here’s what I’ve got for a first glance. If I missed your stock, let me know. There are probably duplicates. Remember my philosophy. When investing, it’s not figuring out what to buy that makes you money — it’s figuring out what not to own.

ctic – don’t like it, doesnt make money
ttnp – don’t like it, doesnt make money
vnda – don’t like it, doesnt make money
snen – looks interesting, heading towards a losing quarter. worth a second glance
apwr – too expensive for me
mesa – don’t really want to buy airlines.
mbi – down to $5.69 from above $60. Woohoo. but i dont like their business model right now.
chng – too expensive, i’m looking for deals
clne – not down enough from it’s 2 year high.
do – not down enough from it’s 2 year high.
esv – looks reasonable, worth a second glance
ne – not down a lot from its 52 week high but it does have a low p/e. worth a second glance
atw – same as ne
free – i like this one, i have checked it out, great buying opportunity
ocnf – more risky than free, still need to look through it in depth
pncl – i dont like airlines but this one looks to have opportunity, will look into it
ahr – looks like it’s down huge, could be a buy. will look into
ddr- looks like it’s down huge, could be a buy. will look into
GSOL – looks itneresting, will need to dig deeper, don’t like that the trading volume has gone down as the stock price has gone down
sclx – not interested, close to 52-week high, but their is a good growth story, will look for cheaper prices if it comes down
xhua – this looks like it died, they dont have revenues, not interested
myst – i like this one and will add it to my sorting list. odds are it’ll be near the bottom though.
sopw – looks interesting, cheap solar potentially, will look into
caah – looks like it’s been dying for 9 years. but it’s cheap so i’ll look into it
ckgt – i’ve liked this since 30 cents. no reason to change now.
nfes – looks like it’s worth looking into
cbak – looks worth looking into
ltus – like this one, own it
sina – don’t think it’s cheap enough based on 2 year charts
found this link: http://www.cnanalyst.com/upside/
hrbn – P/S = 2, not cheap enough
ntes – 52 week high, not interested
chng – not cheap enough, but looks solid just from the numbers, probably will go x2 in 3 years
feed – accidently bought it — but no reason to sell, i was trying to buy free. wish I ran across it in march. school gets in the way of everything
cneh – dirty dirty cheap. gotta love it. i own it.
cnoa – bob’s got me cautious on this one, but i still own it and am a net buyer.
siaf – pink sheet, no way.
caah – sucks for last 9 years, worth investigating if they will suck for the next 9 of if there’s actually some substance.
cbak – on my investigation list
cpst – not profitable
igc – looks like a potential idea, low trading volume. worth looking into
bcon – not cheap enough unless something is going on. lemme know
cpst – not profitable, yuck
geoy – chris fernandez pick, this thing is a trader’s dream. i think i’m going to start trading this one. buy when it’s oversold, sell when it’s overbought.

alright, out of those the ones i’m taking a second glance at: snen,esv,ne,atw,ahr,ddr,gsol,myst,sopw,caah,nfes,cbak,chng,feed,igc,free

Hi Glen,

My portfolio has increased another 10% since Friday. Conseco blasted off on today’s 1Q earnings report. I can’t believe I picked it up at 48 cents and it’s hit a high of 3.90 today. My numbers are fast approaching $3500 and expect that to double yet again in the next few months. I’m taking a little off the top on some of my investments to further diversify my China portfolio. I’m attaching a screen capture of my 6 month returns to verify my numbers as of May 9th – plus the cash on hand from today’s sales. These numbers represent following your blog advice and nothing else. Remarkable. Simply remarkable.

Best,

D.A.Wagner

100% in 1 Month Financials
By
Glen Bradford

I think that if you’re a professional money manager and you don’t make 100% return in 1 year starting today — you should look into other forms of employment.

Jim Cramer is right. I’m going to stand up and shoot for 100% in 1 month with a couple stocks. All of them are set for huge gains when the mutual funds grab them at $5.

Conseco (CNO) — I’ve been yelling about this one since $0.33 when I backed up the truck. I came up with a 2009 EPS of $0.85 weeks before the analyst updated his estimate to include the restructure I forecasted. You too can ride this to $7 — more than 100%.

Genworth Financial (GNW) — They didn’t need the TARP. That’s a sign of strength. Just popped to $5. Next stop: $12. Get ahead of the curve and allocate your holdings where the money is heading next. Don’t wait!

American Capital (ACAS) — I am anticipating a restructure of their current debt obligations. Note that this can bring back a huge yield if you sit tight. Odds are the restructure will eat out of short term (1-2 years) profit margins, but the stock price will soar. $8 is just around the corner.

I don’t respect people that recommend things that they themselves do not own. That’s why I’m long all the companies mentioned in this article. If you’re interested in banks, shoot the middle of the road and start with the ones that are down the most over the last 2 years and up the most over the last 2 months. That way you’ll pick up bargain banks that hopefully aren’t dead beats. A couple that I own are Fifth Third Bancorp (FITB) and Huntington Bancshares (HBAN).

Disclosure: Glen and his investors own CNO, GNW, ACAS, FITB, HBAN

Glen Bradford
Purdue Industrial Engineer
Masters in Business Administration
www.glenbradford.com

Well. Logic Errors run rampant.
By
Glen Bradford

For example. Back when kids had to walk up hills both ways to get to school in the snow and kids ate ice from the ice man off the street (the good old days), it was financially savvy to buy larger lot sizes of shares (you paid for the volume as opposed to a flat fee). My grandma has a couple rules that she inherited that will in my opinion prevent her from taking advantage of steals. One of them is she refuses to buy overpriced companies. She likes them between $10 and $50. So, I asked her if she wanted to buy a share of Google for $100. “No way. That’s too expensive.” How about a share of Berkshire for $200? “What are you Glen, crazy?”

My dad likes to hold on to losers in the attempt to “wait them profitable.” To me, here’s how I look at things: I have two companies. One I own, one I don’t own. The one I own is down 50% from its high and I feel like crap. I just lost 50%! The one I don’t own is down 95% from its high and upon further research, indicates that business still exists and is growing, where my one that is down 50% is kind of taking a beating on the business side too. Now, from my dad’s perspective, selling the one down 50% is a fools game. From my perspective, not reallocating into the steal is a fools game. The side note to this is that when you see a lot of people selling a stock, the goal is to get ahead of where the money is heading at any given point in time. It’s really hard to predict this, but if you see your stock getting hit by a steaming locomotive, a speeding bullet, and getting jumped by Wall Street’s hoodlums like a girl scout’s cookies at fat camp — you might want to get out and get back in at a lower price.

Human behavior loves trends. You see this traditional cycle where somehow stock analysts continue to have jobs of forecasting what the stock price used to be by using a little less logic and a little more of what the stock price is now. Don’t fight the trend unless you believe you can keep aliens from reading your mind by wearing aluminum foil around your head or predict the stock market cycles by using solar cycles or astrology.

Size matters. Everyone loves talking about large companies. They have the most shareholders. The largest companies in the world probably can’t double in size as easily as the smallest company in the world. For example, I don’t see Exxon Mobil doubling in size as easily as the one-man barber shop down the street. Heck, the guy could call my sister up and have a floor sweeper in about 10 minutes and have doubled his work force. I see no reason to own these touted companies at their higher prices. Look at most investors portfolios (if you can peek past their mutual funds). What do they own? This large cap garbage.

Jeremy Siegel has empirically proven numerous times that stocks outperform most everything in the long run. My mom can’t stop buying gold. I didn’t care really — until I found out she was selling my most undervalued holding because it was up 50%. Even though I tried really hard, she seemed incapable of understanding how selling a company at less than half of net cash (cash – total liabilities) to buy gold (paying 20% of the cost to brokerage fees) not only seemed like a ridiculously more risky proposition to me, but also in my opinion was getting nothing for something.

What’s with this “playing with the house’s money” garbage? I called up the “house” and they confirmed that it indeed was my money. This is a logic error at its finest. You should always allocate your portfolio to maximize your returns. Convincing yourself you’re playing for free, when in reality you are still playing with your own money is pretty much the dumbest idea that everyone at wall street loves to propagate.

Well, that’s a pretty good snippet, don’t-cha think?

Glen

From: Jon Slotnick
Sent: Monday, May 11, 2009 12:48 AM
To: Bradford, Glen Richard
Subject: Re: New Dragon Asia?

P.S. What are “old-fasioned rule mechanisms?”
On Sun, May 10, 2009 at 9:44 PM, Bradford, Glen Richard wrote:
Jon,

I think it’s a bargain, just don’t own any — I sold out. I will buy back in if it turns a profit and is still cheap. There are less risky more profitable ideas out there.

Hope this helps, convincing my father to sell out was a pain in the neck. He doesn’t like to sell at a loss. There are a lot of old fashion rule mechanisms that I’ve been jotting down so that I have some good material for an article once I get enough of them.

Glen

From: Jon Slotnick
Sent: Monday, May 11, 2009 12:25 AM
To: gbradf
Subject: New Dragon Asia?

Dear G.B.,
I read your blurb on NWD and am holding 30,000 shares @ .17. Not sure if the company will stay afloat after Friday’s 10-Q, or actually is a bargain at these prices. What do you think?

Thanks,

Jon

Ahh the macro view.

I had an interesting conversation with a private equity analyst at Blackstone last month, his basic thesis was that commodity export dependent and goods export dependent economies are basically a form of leveraged economy and will run up the most during this recovery.

The US manufactures guns, no butter, and some MTV. No leverage.

They talk about the BRIC’s, but it’s really the IC’s, Brazil and especially Russia are not in the same league as China and India, which have simply plowed through this recession without much of a whimper, and China’s economy is much more commodity export and goods export dependent than India’s, which seems to be service based.

One play I have now are ‘triple happiness’ stocks, e.g. PetroChina and China North East Petroleum, which have:

1) large reserve value increases due to dollar increase per bbl as the dollar devalues and demand picks up, reinflating per bbl oil prices

2) large cashflow increases due to dollar increase per bbl as the dollar devalues and demand picks up, reinflating per bbl oil prices

3) tremendous organic growth funded via assets which throw off gobs of cash

I sold off PTR and placed most of it into CNEH at the start of the month and it’s produced a handsome return, but no sense looking a gift horse in the mouth, I need to diversify into some other China plays. Hence the screen.

-Gene

On Sat, May 9, 2009 at 5:00 PM, Bradford, Glen Richard wrote:
I agree.

Dumb money is what makes the stock market go so low and so high. We are on the upswing. Look to the VIX when the S&P is down, when both were down, I started loading up. The bottom was in.

I agree with all the money on the sidelines not sitting there much longer. Where is it going? USA Stocks or foreign stocks?

Last time I checked (like 4 months ago) the deals aren’t here. The money and exchange rates are looking good in eastern Europe and places where commodity exports are leading GDP drivers.

Only number crunch when you have to. If you want to know about dryshipping, just go visit a big boat yard and ask around if the jobs are good and see if ships are moving.

Glen

From: Eugene Franco [mailto:efranc]
Sent: Saturday, May 09, 2009 4:43 PM
To: Bradford, Glen Richard
Subject: Re: EMH and Chinese Small Caps

mutual fund follow on*
On Sat, May 9, 2009 at 4:42 PM, Eugene Franco wrote:
Since you like data crunching and your resume lists quite an array of programming and statistical knowledge, maybe you’d find this data fun to play with:

http://www.ici.org/stats/mf/index.html

The two most interesting pieces I’ve been looking at are the mutual fund money flows, and the money market assets.

One can see a clear flight to safety with MMA Gov’t assets soaring 70% or $600 Billion from August 2008 to March 2009, massive dry powder.

The data indicates the dry powder is starting to be ignited, with $120B total drop in MMA assets of which $100B is MMA Gov’t, but it would appear that ~80% of the dry powder is still remaining.

What’s interesting is that most of this seems to be going directly into stocks, rather than heading into mutual funds, which have only seen $15B net inflows the past month.

So methinks this run up driven by hedge funds and retail traders that are pulling cash out of MMA, and that there will soon be a follow on as people reallocate their 401(k)’s back to stocks (dumb money).

Thoughts?

On Sat, May 9, 2009 at 3:51 PM, Eugene Franco wrote:
In HS to win stock competitions I just used two opposite high alpha portfolios.

Porfolio A has 10 highest alpha stocks.
Portfolio B is short 10 highest alpha stocks.

That was my temporary solution to the Kobayashi Maru, hahaha. Of course it doesn’t work in real life, just silly high school stock competitions.

Eugene

On Sat, May 9, 2009 at 3:46 PM, Bradford, Glen Richard wrote:
Yeah,

Too bad they wouldn’t remove my first 2 weeks of trades. I was just putting stuff in and out to see how easy CAPS was to use.

Oh well,

Glen

From: Eugene Franco [mailto:efranc
Sent: Saturday, May 09, 2009 3:43 PM

To: Bradford, Glen Richard
Subject: Re: EMH and Chinese Small Caps

amen.

btw, nice caps rating!

Ahh…. overheating is an old friend..in high school I ran a P4 with a refrigeration unit (it sat under the desktop, I kid you not) so I could overclock it. In college my desktop used to crash from running backtesting on years worth of data, I would have to run the backtests at night when the dorm room was cooler and pray in my sleep that the test would run to completion.

I ended up upgrading to a dual core pc, my time was worth more than the $800 for a new desktop.

A touchscreen, sounds exciting, not sure I see the connection to operations research stock market software. What will the software do?

-Eugene
On Sat, May 9, 2009 at 2:24 PM, Bradford, Glen Richard wrote:
Gene,

Not a big deal. It’s not malware. It’s overheating. Plus, I use computers about 10x harder than your average user. Granted, I’m not doing autocad — but I’m always downloading and analyzing large quantities of data.

Good news is I’m getting a touchscreen and I’ve wanted to write some operations research stock market software so that I can use that to its full capacity.

Glen.

From: Eugene Franco
Sent: Saturday, May 09, 2009 2:19 PM
To: Bradford, Glen Richard
Subject: Re: EMH and Chinese Small Caps

Oh no, I hope it isn’t too serious of a crsh.

I had my computer taken over by malware in January, which is amusing considering I run 2 antivirus programs, and don’t download garbage. The malware programmers are becoming better, they now block updates from anti-virus sites, block the anti-virus programs from running, lock the files to prevent them from being deleted, and prevent reboots into safemode.

After spending the weekend dealing with that I now have no fewer than 3 anti-malware guards and 2 anti-virus programs running, it’s really getting outrageously ridiculous for windows xp.

Take care,
Gene
On Sat, May 9, 2009 at 1:53 PM, Bradford, Glen Richard wrote:
Eugene,
Glad you’re thinking. I agree with your X, Y, Z concept. My adjustment to it would be that that time Z would also include an environment that doesn’t change. Since the environment is constantly changing, the stock market is kind of a lagging indicator. There’s all sorts of inefficiencies.

Great! I love lists. My computer crashed www.glenbradford.com/blog I’ll let you know when I get things back up and running.

Glen

From: Eugene Franco
Sent: Friday, May 08, 2009 8:38 PM
To: gbradfo
Subject: EMH and Chinese Small Caps

Hey Glen,

Enjoyed your post on EMH on your blog and your articles on Seeking Alpha.

I had the EMH debate with a friend at Goldman Sachs FICC, the conclusion we came to is that for EMH to hold true one needs sufficient players X and freely available information for all parties Y, and these would eventually be reached given enough time Z.

I’ve been hand screening the universe of Chinese micro caps, and am curious what fields you use for your personal screen (i’ve weeded 700 down to ~30, but I am having trouble weeding the list down further). The screen results are attached. I’m currently long CNEH, but I’m looking to diversify my position with some investments in unrelated industries before I add leverage.

Take care,
Gene

It’s official,

My strategy is making money since late July 2008 and I was fully invested in bullish stocks and options the whole crash through.

That means I’m beating the market too. I will document the track record charts when I get my laptop up and running.

Glen

First, you get an “A” for coming up with the answers. I am sure that was not fun. My comments, in red, below. Bob
I don’t pull any punches, the comments are meant to be constructive. I am sure you will take them that way. Bob

On Sat, May 9, 2009 at 10:28 AM , Bradford, Glen Richard wrote:

Here goes with the answers. Looks like I might have bagged a loser in disguise.

You will look like a prudent and thoughtful person if you generate a cautionary note , which says that you have
discovered what appear to be areas which deserve to be explored in more detail, and will let everyone know if you can recomment the stock, in the future. No need to go any farther. If you choose to exit your position, I think that should be disclosed. Bob.

Glen

From: Bob B
Sent: Thursday, May 07, 2009 3:01 PM
To: Bradford, Glen
Subject: RE: CNOA book value, “10 Best Chinese”

Glen,

These are not rhetorical questions, I really would like a response. You are dealing with other people’s money here.
A one word answer on each will be appreciated.

Did you know that China Organic financed approx 100% of the Bellissimo aquisition cost? Off hand, No. That is what the internet is for. Google Bellissimo Vinyard and you would have come up with the sales price, and the terms. This would fall in the category of “you should have known.”
Did you know that 50% of the $14 M cost was allocated to land, 50% to high end residences? Off hand, No. I found that in the SEC filings.
Did you know that 10 months after acquisition, their FS carries the California Multi-Million housing category assets “At Cost” and reflects no significant impairment of the asset? I assume that this vineyard is worth significantly less than they paid for it, maybe worth $1M. The problem may lie in the vinyard, but it DEFINATELY exists with the housing. California Res Market is rat shit, especially in high end homes, they state $7M of improvements, which is the housing, the earlier buyer folded up, etc, etc. We can figure out a reasonable value on the vinyard portion of the asset a lot easier than the res portion. UNtil we know the history of the property (which is required by USPAP) we are flying blind.
Did you know that FASB requires an asset impairment to be addressed? Yes. Excellent.
Did you know that a US based financial consultant who was taken on specifically to assist with accounting deficciencies for Sorbanes-Oxley purposes has severed his relationship with the firm? I believe that was what the lawsuit was about.
Did you know of the two directors resignations of this week? Nope, haven’t been able to keep up. But now that I know this, I’m going to act accordingly. That was real late-breaking news. A reasonable person would realize that info was probably not in the system when you were forming your opinion.
Did you know there was an appraisal of the property? I did not. If you found that they were financed by a Life Insurance Co, and you had experience in Deeds of Trust, FIRREA, etc, you would know that Life cos always require commercial appraisals. So you’re learning. Now you know, and you will never forget it.

Glenn, I am not trying to bust your chops. I don’t want you to become a legend for the wrong reasons!
I am trying to understand what you knew when you wrote your article. In my life experience, at the time you submitted your article, either
1. you knew some of these facts, or 2. you should have known, or 3. they are new,breaking news.
Nobody should think poorly of you if you disclosed more.

Bob
PS I got new info of MAIs, there are 5 in China, if you include Hong Kong.
================================================

On Thu, May 7, 2009 at 7:35 AM , Bradford, Glen Richard wrote:

> Yep,
>
> Was aware of the lawsuit. Makes things interesting.
>
> I’ll probably revisit my investment thesis this weekend to look for more cracks.
>
> Glen
>
> —–Original Message—–
> From: Bob B
> Sent: Thursday, May 07, 2009 4:12 AM
> To: Bradford, Glen Richard
> Subject: RE: CNOA book value, “10 Best Chinese”
>
> more info on the lawsuit. Plus, they are carrying Bellissimo at cost,
> and have not recognized any impairment on the asset. About $7M for the
> structures was their cost allocation. Assume 50 percent depreciation,
> which could be light. another $7 on the land. No grape sales. Life
> Insurance co financed, I assure you it was appraised. Lawsuit says it
> was a classic pump and dump securities fraud.
>
> http://securities.stanford.edu/1041/CNOA_01/
>
> Bob
>
>
>
> On Wed, May 6, 2009 at 4:51 AM , Bradford, Glen Richard wrote:
>
> > Just about to take a final. I think they overpaid. But I am
> > optimistic. Sure, sometime next week we could dig deeper.
> > glen
> >
> > —–Original Message—–
> > From: Bob B
> > Sent: Wednesday, May 06, 2009 3:41 AM
> > To: Bradford, Glen Richard
> > Subject: CNOA book value, “10 Best Chinese”
> >
> > Glen,
> >
> > First, the Appraisal Institute hasn’t got back on my inquiry of the
> > number of MAIs in USA vs China, sometimes I think once someone’s paid
> > their dues they ignore you.
> >
> > Your summary on CNOA mentions “When you look at the value of a
> > California Wine label in China where China Organic distributes the
> > stuff, you begin to see the big picture profit potential.”
> >
> > Okay, I’ll bite, what IS the value of a
> > California wine label in China?
> >
> > Bellisimo doesn’t produce wines, it grows grapes. Did the sale of
> > Bellisimo involve a California wine label?
> > I think Bellisimo can be viewed as a couple of high end residences,
> > located on a vinyard. Since it is pretty well documented that
> > California high end homes of the multi million dollar variety have a
> > history of drastic percentage decline in value since the date of the
> > Bellisimo transaction, and that market has not recovered, I suggest
> > that the book value should reflect that fact. I am not saying it
> > isn’t there, but I don’t see it. It looks to me like they paid more
> > than appraised value for it (Is that why suddenly you see blue sky
> > cropping up. . . ) I Suggest you request a copy of the appraisal
> > that was done at the time of purchase.
> >
> > You imply CNOA paid cash and own it free and clear, but I would sure
> > like to know if that is the case, or not. IF not, the implications
> > might be huge. Consider:
> >
> > It makes a big difference if they paid $14M, borrowed $9 million, and
> > now it has a Current Market Value of, say, $6M, doesn’t it? Makes an
> > even bigger difference if that has not been properly disclosed, ot
> > maybe it has, and you haven’t figured it out. That might lead you
> > to say that CNOA bought Bellisimo for about $14M and is trading at
> > $23M. That would change the net value of their interest in Bellisimo
> > from “14M” to “NEGATIVE 3 Million” that potential swing of 17 million
> > in book value would have a significant impact on Book Value, in your
> > matrix, wouldn’t it?
> >
> > If you get a copy of the appraisal, I will be happy to review it with
> > you, no charge, just tell you what I see. It will be real interesting
> > to see how they developed their opinion of the Highest and Best Use
> > of the property. MAIs who do vinyards are very sensitive to the
> > business value, value of brands, the value of lands, the difference
> >
between going concern value vs. liquidation value vs Current Market
> > Value, Highest and Best Use, etc.
> >
> > Since you are emphasizing Book Value in your matrix, I thought you
> > would want to zero in on exactly what CNOA’s Book Value is? What CNOA
> > bought, what the current value is, or was at year end, and whether the
> > “GAAP accounting” that they say they are in conformance with has
> > recognized the decline in value from when they bought it. I will be
> > happy to put you in touch with an MAI who specializes in values of
> > Vinyards, etc, in that area, if you like. Never set foot on one,
> > myself.
> >
> > Lots to learn here, lots of wealthy people are interested in wines.
> > Doug Casey is into Argentine Wines in the Salta region. Are you
> > familiar with him? Interesting classmate of Bill Clinton’s. Lots of
> > Canadian Mining stock experience. Hard money guy.
> >
> > Bob

Hey David,

Glad to hear. My computer crashed yesterday so I bought a new one but am working on a borrowed one until I’m up and running again.

So, shoot me an email again in a week or so to make sure that I have you on my email list. I backed up the email list — but who knows.

Glad you’re doing well.

Glen

From: D.A.Wagner
Sent: Saturday, May 09, 2009 7:11 AM
To: gbradfo
Subject: Update

Hello Glen,

I wrote you on April 6 to let you know how I’ve been doing. At that time I’d doubled what was left of my old portfolio. Now it’s May 9 and it’s actually more than quadrupled. I looked back at my starting figures and there was $768 in my Scottrade Account last November 11, 2008. Now there’s over $3200 and I keep adding new stocks every week or two from your China lists. I share my success with friends, but they don’t quite believe me, they think I’m getting duped. Pretty funny considering I’m doing my own trading.

Thanks for restoring my faith in thinking outside of the box.

Best,

D.A.Wagner

Everyone is deriving absolutely idiotic conclusions on ACAS.

American Capital’s Board of Directors will make a decision on the allocation of the dividend between cash and stock which will be announced at the time of declaration.

They also got approved the possibility of 4 stock splits a year and usually pay a divided each quarter.

1+1+1+1=4.

I see stock dividends in the near future as they restructure their debt covenants.

I hope that the idiots out there are SELL SELL SELL, I’ll BUY BUY BUY.

I’ll watch the short term gaming on this one. I might sell out and buy in lower. That usually makes sense, right? Thought so.

Fear the Idiots. It makes no sense to run headstrong into a “poorly founded” stampede, cause you’re still going to get knocked to the ground like in the Lion King.