GlobalSpeculation.com
Because it does not make sense not to

skbi – ok fine, i don’t hate it like i said i did, it’s a buy. i’m sorry folks, i am hater no longer
cwrn – pink haha no way
chri – looks very interesting based on the numbers, havent looked at the story. way way small.
bho – not predictable enough for me. but another one the hf manager recommended.
tbsi – hf manager likes it, i like it as a play but it really isn’t obvious enough for my $
rcon – looks like it will outperform the market in the next 5 years. just not good enough for me.
ygii – this sounds like the motley fool one or ALRC. Those guys are so slow.
admp – don’t like it, no revenues
pudc – like it still, getting more expensive
cpsl – guess i’m supposed to like sutr more, but on the same page as gsi
txic – like it, just not as cheap as what i own.
gtx – no
cctr – no
csol – no

chng – no clue here. dont want to look further than not knowing cause i dont like Nat Gas.

Chris,

Great vibe and question. I know little to nothing for sure. My best understanding is that the markets over there that are unavailable for foreign investors are overheated and treated more like a casino than anything else as I understand businesses engage in cross investment and a lot of people have made a lot of money in the last 8 months.

The Shanghai and the Hang Seng have heated back up. The entire market and certain parts of it are overpriced. They are breaking out IPOs again.

So, I don’t know what you own, and I’m not going to ask. I will say that I am comfortable sitting and owning the shares of the companies I own at the current prices, as they forecast imminent bankruptcy as opposed to double digit mind boggling growth (which appears to be the reality).

Know what you own and focus on not losing money. There’s a lot of overpriced ideas out there as there are a lot of people who know significantly less than I and bet only on the large caps through ideas like pgj and fxi.

Fools, I think so. They know not what they do. To him who has ears, let him hear. My translation: I can’t explain what I understand to other people who don’t already see things from a similar perspective as I.

Glen

—–Original Message—–
From: Christopher [mailto:]
Sent: Saturday, August 01, 2009 5:44 PM
To: Bradford, Glen Richard
Subject: Bubble popping…?

Glen-

I’m getting the vibe that maybe China is about to start a long
“giving back gains” cycle—-to put it nicely.
Sounds like even the powers-that-be in their central bank are worried
about over-leveredging over-levereging. We know how that works itself
out…

I am thinking of selling all of my China holdings and re-entering on
the “bottom”. Do you have a feel for what is going on?

-Chris

5 Top Chinese Pharma Plays
By
Glen Bradford

This is the last of a 5 part series on investing in China

My grandfather is a berry picking legend where I come from. The rate at which he picked seems to accelerate as the story propagates, but I would like to show how you can apply successful wild berry picking principles to stock picking. I do want to say that I don’t necessarily focus on Chinese stocks, but any potential investment anywhere in the world that I believe to have incredible potential with limited risk. Right now, the picking is good in Chinese Pharmaceuticals and if you know what you’re doing — I believe you can turn thousands into millions over the next couple years. And that’s after taxes.

1. You need to know where to look. If you go looking for berries in the desert, you might be disappointed. If you’re looking for Pharmaceuticals, you might run across Lotus Pharmaceuticals (OTCBB: LTUS). Like Jack’s magical bean stalk berry, Lotus is my red pill from the Matrix and they are only up 78% since I mentioned them in May. Although they haven’t taken real steps to uplist and the stock price has had a negative correlation with company performance, it is my belief that not picking up this stock for yourself is short sighted to the highest degree. In June they again were awarded GSP certification. If you are short sighted you’ll never make ends meat berry picking and you’ll never find a company like Lotus that is growing and trading at less than twice earnings.

2. You need to know when to look. Although China has been running headlines and a lot of people are bubbling with excitement — it was only last year when China was the poison berry. When you buy determines the price you pay and therefore the risk you undertake — as I believe risk comes only from overpaying. China Pharma Holdings (OTC: CPHI) is another Chinese Pharmaceutical company with falling stock price and improving fundamentals. My grandfather taught me that it doesn’t make sense to pick berries in winter and if you want jam then, you had to have picked them 6 months prior. The same goes with stocks. Timing is everything. Buy when others are “uncertain” as they appear to be in China Pharma, since the price justifies company shrinkage when they forecast 20% growth — it’s time to buy.

3. You need to know what you’re looking for. Like the poison berry from above, picking the wrong attributes to look for in companies will lead you off the investing cliff. Ben Graham focused on P/B. Buffett expanded this to P/E. Ken Fisher emphasized P/S. Peter Lynch focused on PEG. I use all 4. Jiangbo Pharmaceuticals (OTC:JGBO) would be attractive on another measure as well P/C (Price to Cash). With a forward P/E between 2 and 3 and $85M in cash, Jiangbo is priced for bankruptcy at $113M and they are nowhere close considering they have been growing both top and bottom lines at 50% annually.

4. You need to avoid the beaten path. The best berries are found in the untouched wilderness where wild animals scare away intruders. Stocks are no different. The best ones to own aren’t making headlines and your friends have never heard of them, but soon will. China Medicine Corporation (OTC:CHME) is priced to shrink at four times earnings and is growing. Throw in the fact that they are receiving positive results from their new innovative product rADTZ, which is designed to decrease animal mortality rates and save breeder farms some serious cash, and I’ll pick this one.

5. Lastly, when you have the best picking conditions, you need to pick with both hands. The window of best picking opportunity is never open very long. In the past year, I have come to prefer speculation when I believe stocks have little downside. In matters financial, I’ll always pay nothing for something and am willing to work my way up from there and that makes anything close to $0 that’s profitable worth looking at. For China Yongxin Pharmaceuticals (OTC:CYXN), I run my calculations ultra conservatively on 61M shares. Even still you have a growing company priced for bankruptcy. Delicious.

There are several other cheap Chinese pharmaceutical plays out there. Remember when investing that diversification is protection against what you do not know and for some people that is quite a lot. I hope you enjoyed my series on investing in China and I would like to conclude this with a note that I firmly believe that this series will catch more publicity as the stocks mentioned throughout it appreciate in price over the next couple years. But for now, these companies are all growing at significantly higher rates than anything you can find in the USA and at less than one third the price. Brilliant!

Disclosure: Bradford was long all the companies mentioned in this article at the time of publication.

to do list:
adl – just found this 10 seconds ago but i’m going to investigate it some more. looks promising at 1st glance.
cagc – their p/e is 6 and their latest powerpoint that i could find in 30 seconds looks like my MBA friends from IU made it (haha, kidding, but I have to start being funny or something to draw a crowd)… and their latest P/R was guidance of anything but $$$$ figures. so.. someone shoot me their estimates, but until then i’m not interested.
feec – dont have revenues, not interested, no clue why you’d own this. drop the c and add D and you have FEED. if that’s what you meant, sure. that thing will outperform the market in the next 5 years. just not by enough for me to get behind the bus and start singing “the wheels on the bus”
wirx – oh my. not interested, no clue what they do, dont care
snp – like 200% upside. will probably go up and outperform the market, but it’s not worth my time. it’s risky
CHVC – not for profit
dcpd – not big enough — too expensive
chme – good – update estimate chme http://cwf2076.chinaw3.com/ADTZ.aspx
skbi – add to sorter – huge potential here.
ESPH (if they do what they say they are going to do) will probably go x10 in the next 2 years (Just P/S=1 of their 2011 Estimates, but could go x20 if this thing really takes off), but I wouldn’t put my own money in this… it’s too speculative for my own money; especially with the other opportunities I see out there which are as large and less risky. http://wallstreetresources.net/pdf/fc/ESPH2.pdf
AEMD – Aethlon Medical Releases Shareholder Letter to Discuss The Treatment of Hepatitis-C Virus (HCV). That would be huge. Otherwise, I just wouldn’t buy. It lacks the two immediate requirements of revenues and net income.
rino – now uplisted
cpf – hawaiian bank, yuckie i thinkie
nrf – think its undervalued, but no clue for sure
rodm – nope
nsmg – lol, you want me to bet on hurricanes now? HHAAHHAHAH, No

DDR – came out with good news and confirmed that i still like them, i think they’ll be over $15 by the end of the year assuming that the markets dont crash again. but with $2 in dividends, ha, let’s be realistic and say even $1 in dividends, they are paying you to sit on your butt when they bring that sucker back. i’d say i could wait, but again, this is a stock for people that hate china. it seems like i have 2 sets of followers…

set A: I hate china, give me american companies
set b: I can deal with china, give me both

so ddr is set a and set b, but since i love china so much right now (practically giving me companies for free), i’m posting up with most of my money invested over there.

China: Drinking, Smoking, Building, and Nuclear
By
Glen Bradford

Welcome to early adulthood. Now’s the time that if you don’t understand compounding interest rates or you’ve never heard of them, they’re really working against you. You may find yourself growing wider at about the rate you were growing taller when you were 12 and your portfolio is shrinking faster than your financial advisor forecasted under the worst case scenario. My ideas below aren’t your generic Chinese plays like the two popular ETFs by iShares (NYSE:FXI) and PowerShares (NYSE:PGJ). Still interested?

Look, I’m no Jim Rogers. Grass is always greener on the other side. Asians save more money. China never was in a recession and is and has been growing at twice the fastest rate we’ve seen over here in a couple years. They still make less than us per person. They want what we have. Rumors are that their new “more entitled” generation spends more. My advice: set up a trap so that their money is funneled your way. I’ve got 4 ideas that might appeal to the “sophisticated adult.”

1. Companies that are priced cheaper than the profits that they are going to make in the next year are growing harder and harder to find by the day. In China, sipping on Chardonnay imported from California is sure to give you a sophisticated buzz. Let’s round the bases. Cheap? Yes. Growing? Yes. Sophisticated? Yes. Homerun. China Organic Agriculture (OTC:CNOA).

2. Now that you’ve got your liquor, let’s get you a pack of smokes. These smokes aren’t your typical Philip Morris (NYSE:MO) western blend. You can’t get them yet, but their cactus-based cigarettes are slotted for launch later this year. They were awarded the patent last year heading into the market crash. China Kangtai (OTC: CKGT) has 3 years of steady growth, future growth under progress and is priced to shrink. No brainer? I think so.

3. How would you feel if you could snatch up a company capable of working projects in 7-star hotels, having just announced a new agreement worth $500M all for less than $100M? Oh, don’t forget that the backlog was $136M back in March. I’ll be honest, the buildings CAE (OTC:CAEI) builds are by far some of the most advanced I’ve come across in my lifetime — and I’m an engineer.

4. Now that we built it, we have to be able to turn the lights on. Interested in going nuclear? Trading less than $10M and being the only publicly traded Chinese company with the ability to produce nuclear graphite, China Carbon (OTC: CHGI) is your ticket to profits off of China’s target of 40 nuclear reactors by 2015. They just received a $5M purchase order and have been advised by their local government to apply for a $26M loan. Rumors suggest that they have already targeted a potential acquisition target that would double revenues and income.

I’ve been told that there are two main ways to accumulate large sums of money. You can make it, or you can save it. I always take shortcuts and was always a Chinese-cutter in grade school. Today is no different. My shortcut: Successful investing allows you to make money with your savings. Where I come
from, that necessitates not losing money. If you can take your savings, and successfully invest it, you can grow a small sum of money into a large sum of money. Sounds easy enough — now go give it a shot.

Disclosure: Bradford was long China Organic Agriculture, China Kangtai Cactus Bio-Tech, China Architectural Engineering, and China Carbon Graphite at the time of publication.

Well, they turned out a profit because they were able to sell their assets. They are building a larger reserve for future losses. My initial investing hypothesis included the willingness to hold and just sit on the stocks for a couple years.

There are a lot of people out there claiming that they understand what’s going on. I’m not that type of person. If I had to guess on this one, lets see.

Their shareholder equity is 154B and their market cap is 20B (Assume 25% dilution, cause I just feel like it right now).

K, let’s assume that citi is going to lose $10B each quarter for the next 8 quarters before turning profitable again (mid 2012). Remember, critics are complaining of a $5B loss.

Your upside to book value with these rough estimates is 200% return. So, is this a good value? Probably.

But, what the heck do I know. Disclosure: I think I’m long citi call options. Not sure. I bought a bunch of bank just out of the money call options back in late march. Needless to say, I should have just margined the heck out of my account. Options are also a function of volatility, and back then I paid a premium.

Glen

From: Scott Stefani
Sent: Sunday, July 19, 2009 11:06 PM
To: Bradford, Glen Richard
Subject: Thoughts on Citi

Hi Glen:

Hope you had a great weekend. I’m curious what your thoughts are for Citi’s future. You had recommended Citi a while back with your “mark-to-profit” write-up on CAPs and I’m curious where you stand after their 2nd Quarter results (which sounded pretty good to me, outside of their Retail Banking and Credit & Mortgage Losses).

I have about 5% of my money invested in Citi currently, and I’m wondering if I should lessen my exposure, since it’s future seems a little cloudy, and instead use that money to get more of your China Uplisting recommendations. I’d appreciate any advice you might be able to share. Thank you Glen.

Scott

I found a very large arbitrage opportunity. I need money to take advantage of it. Contact me. Thanks.

www.glenbradford.com

But first, a funny email from an IR company.

Very Funny Info for you,
Talked to my guy in Hawaii, Just hung up the phone with him like 15 seconds ago. Just started talking about you, did not mention your name, just said your strategy, he said OOH that’s Bradford, yea he is a genius and the reason I sound like him is because I get a lot of my ideas from him.
We laughed a little and talked about our stocks, he told me that you are a very good contact for me, and we should do a lot of good business together.
No wonder why he sounds like he has your investment ideas, he gets the ideas from you.
—————————————
Mr. Hawaii, buy my way out to hawaii and a surfboard and I’ll answer your investing questions!

I sort through the 20,000 stocks by hand, weeding out most of them in less than 10 seconds. That time should increase since google revamped their website. Basically, I start with large lists, here’s one for example. Now, only keep the top 10: GO!

http://www.otcbb.com/dynamic/tradingdata/download/allotcbb.txt

And I only keep the top 50 stocks worth mentioning after it’s all said and done. Basically, it’s a rolling process. You find a new stock, you compare it to what you already have, if it’s not as good, you move on. If it’s better, you toss the one out of your list and replace it, constantly updating a mental model.

I can do about 1,000 stocks a day. You can scan and sort all day long and build mathematical models, but they can’t do what a human brain does. I tried to build a mathematical model screener — don’t use it much anymore. MagicFormulaInvesting’s Gotham Capital pulled 40% annually using his screen and a bit of intuition.

There is only one challenge an investor faces, and that is not losing money. Most investors assume that they need to take large risks to get large rewards, or go mine for gold in caves when it’s paving the streets. That’s not the case. The goal is to perpetually make obvious decisions, and sometimes that may be no decision at all.

“What counts for most people in investing is not how much they know, but rather how realistically they define what they don’t know.”

Most people start with what they know. I start with what I don’t know, and then I start asking questions.

Honestly, surrounding yourself with 5-10 people like me is where I’m headed next. If each person contributes a top idea that doesn’t loose money and has upside 500%+ in the next 5 years, game over.

I guess my investing philosophy is like going to a ballpark where there are no strikes and trying to hit home runs.

Follow the greats, Peter Lynch’s PEG ratio, Graham’s P/B, Buffett’s P/E, and Fishers P/S. Good rules of thumb.

Glen

—–Original Message—–
From: Maj Soueidan [mailto:tradermaj1]
Sent: Tuesday, July 14, 2009 4:11 PM
To: Bradford, Glen Richard
Cc: kevin; zou
Subject: Re: SCLX

Their are two challenges an investor faces:

1) Navigating through 20k+ stocks in the market and narrowing that list down to a few that should be analyzed. This is where investors can use scans, highs, lows, filings etc. Investment opportunities present themselves in many venues. We like to leave no stone unturned.

2) Narrowing the list further to find “companies that make more money and are set to make more money than other companies should come with a higher price tag than other companies.” And i think you would agree that its not just about making more money.. Its also about relative valuations.

How do you compile your list of potential stocks?

Bradford, Glen Richard wrote:
> I agree with your focus on fundamental criteria. You pick better
> stocks than most, which is why I check in every once in a while to see
> what’s going on.
>
> I only have one method. My belief is that companies that make more
> money and are set to make more money than other companies should come
> with a higher price tag than other companies. Further, in instances
> where this does not hold true, a lot of money can be made.
>
> CHGI doesn’t appear to be around its 52-week high, fair enough.
>
> Congratulations on beating the average,
>
> Glen
>
> —–Original Message—–
> From: Maj Soueidan [mailto:tradermaj1
> Sent: Tuesday, July 14, 2009 3:40 PM
> To: Bradford, Glen Richard
> Cc: kevin; zou
> Subject: Re: SCLX
>
> Glen,
>
> Our company has many avenues of identifying promising growth stories.
> A
> 52 week high is one of ten “GeoBargain” criteria but not a necessity.
> The overriding factors are the fundamental criteria. If you will
> notice,
>
> the majority of the current stocks that we initiated as a GeoBargains
> were not near their highs, although they may be now. Our staff reads
> virtually every earnings press release, runs scans, interviews
> management and performs minor technical analysis to choose our stocks,
> a
>
> methodologies that has proved successful for over 20 years. Correct me
> if I am wrong, but CHGI is not at a 52 week high. Would you have sold
> TIS around $8 when it hit a new high?
>
> Whatever criteria we use, assessing fundamental statistics will always
> be the predominant method by which we isolate promising stocks. We
> also look at stocks attaining 3 and 6 months highs as a filtering
> process and code stocks that meet our special situation criteria which
> have nothing to with momentum.
>
> In a nutshell, there are many ways to skin a cat – new lows(value
> investing), new highs(momentum investing), or scans, but in the end it
> comes down to fundamentals no matter how one chooses to compile a wish
> list. I think what must be learned is to have an open mind and not be
> pigeon-holed into one method, a philosophy that has propelled us to
> above average returns in all but one year (2008). If you would like a
> further explanation on our investment philosophy as opposed to making
> assumptions we would be glad to speak with you. We would also be open
> to
>
> learn more about your investment philosophy.
>
> Maj
>
>
> Bradford, Glen Richard wrote:
>
>> Geoinvesting only invests in stocks near their 52-week high.
>>
>> If they could only learn to buy them on the other side, they could
>> catch the run from 52-week low to 52-week high.
>>
>> But sure, they end up hearing about most of the stocks I follow.
>> Usually an indicator for me to stop buying.

There are a lot of approaches that are going to work in a time like this. Ron Insana is right with his strategy of cutting the defensive plays and going on the offensive with a shotgun approach targeting bottom of the barrel giants. Cramer is right on China.

Resolved: the easiest way to become rich is to buy stakes in large companies years before they are large companies. Captain Obvious: If you bought Microsoft (MSFT) back around 1990 and held it for 10 years, you would have made 10,000%. Nobody ever recommends selling Microsoft, but you may notice from my disclosure that I don’t own it. Believe me, I’m not famous for recommending Johnson and Johnson (JNJ) as a sell around $70.

Sticking with the human lifecycle theme that I’ve been running with so far, there is a rather peculiar stage between when you are a young child to when you are considered a young adult. This is no different when it comes to companies, Chinese in particular. In humans this stage is called puberty. For companies, this stage is called uplisting. Uplisting is like going to college. It’s a required step to becoming available to more investors. What’s hitting the ground running? I’ll tell you.

Puda Coal (PUDC) recently has been beaten down from $5 in 2006 to $0.16 with the latest market crisis. That’s down 95% in price on improving business fundamentals! Puda Coal is reverse splitting 1 for 7 and reincorporating in Delaware in an effort to uplist and gain the attention of some investors that will take them as seriously as I do. Now they’re trading at $0.47, which is still absolutely ridiculously undervalued. Further note that the steel industry is taking off in China. While I’m on that topic, take a look at General Steel Holdings (GSI) and China Precision Steel (CPSL).

I hate talking about stocks that “popped” already, but Sino Clean Energy’s (SCLX) pop yesterday is more like pulling the choke on a chainsaw than pulling the plug on your vacuum cleaner. It’s looking to reverse split to uplist sometime in the next 180 days. Did I mention that they increased capacity by 250% and have a P/E of around 8? Investing isn’t rocket science, but this stock price should rocket — especially since they can increase capacity without expanding by another 185%.

Rino International (RINO) just hopped onto the Nasdaq. They also work in the steel industry where their business is focused on protecting the environment. China North East Petroleum (NEP) started trading on the Amex last month and proceeded to fall over 30%. Ouch! Again, P/E less than 5 and an organic growth of around 20%+.

A stock I mentioned last week, China Digital (CMTP) joined the uplisting train by reverse splitting 10 for 1 over the weekend and grabbed a new ticker symbol, changing from CHID to CMTP virtually overnight. Even though it’s up 50%, it’s still cheap. How many stocks do you own can you say that about?

All said, that’s only what’s been announced. Since June I’ve really been strapping myself into the Chinese uplisting rocket that appears to be taking a 1 way trip. The direction? Up. To me, it’s not a question of how fast, because I’m confident that over time, the speed at which these companies appreciate in price is going to be relatively faster than any index you could compare them to. The question, how high? Realistically, I don’t see these being the next Microsoft with 5 digit percent returns, but you won’t see me complaining over 3-4 digit percent returns anytime soon. My current long term picture is mostly dominated by 4 digit percent return opportunities.

Let’s break out the risk. For starters, I don’t see how people actually believe anything is truly efficient. In everyday life there are so many inefficiencies and perplexities in abundance for the naked eye to witness first hand. Stock prices are determined by whoever shows up on any given day and fluctuate wildly. It is my uncommon belief that I should only buy when I am sure that I can sell at a higher price. There are a lot of other people out there that are going to tell you that’s impossible. I’m not here to make friends.
Know the incentives of those you are listening to. Wall Streeters get paid if you trade stocks and pay for their advice. Journalists get paid if you buy their magazines or read their stories online. Mutual fund managers get paid the more money they can convince people to give them. Notice how none of these groups tend to get paid for their accuracy or their ability to keep you from losing money. And that, after all, is what really matters. Isn’t it?

Disclosure: Glen and his investors own Puda Coal, Sino Clean Energy, China North East Petroleum and China Digital. Glen and his investors also reserve the right to purchase General Steel Holdings, China Precision Steel, and Rino International.

honorable mentions:
yuii – blah! not cheap enough, but honorable
egle – drybulk candidate
rino – now uplisted
cpf – hawaiian bank
egmi – going with ian cassel on this one, will likely make you money and beat the market.

to do:
yhgg – big potential pinkie, better than SIAF in my opinion, check the ihub boards, i’m posting updates, could be scamtastic
rino – will likely outperform the market and probably pull 200% in the next 2 years, not enough for me seeing other opportunities
jngw – hurting, check Q2 earnings
yhgg – Q2 check
pfap – q2 check

Nos:
SKBI – no http://investorshub.advfn.com/boards/read_msg.aspx?message_id=39465597
bnso – no http://investorshub.advfn.com/boards/read_msg.aspx?message_id=39465614
wpte – no http://www.newonlinecasinos.org/casinoarticles/428/1/589/Goldman-Sachs-Predicts-Online-Casinos-Will-Be-Legalized-In-US.html
rz – no way, not profitable, no revenues. but… good idea
rxii – nope no revenues
domk – nope
pdc – can’t say that i’m a fan
tto – huh? nope.
nrg – no
aig – can’t believe this thing is still alive. here’s what i don’t get. they lost 99 billion dollars and were starting with 95 billion in equity. and somehow they still have positive equity of 50 billion?
avp – nope

comv – nope
acfn – nope
pweb – nope
trtn – nope
smed – nope
trib – nope
lvs – nope
dgw – too expensive
hun – no
mgm – no
urre – no
eslr – no
ung – surfs up, no
bee – no
drl – no
CBTE – no