Wednesday, August 30, 2006

Privatisation, a heathy trend?

On today's Business Times,

  • "It's not true that these delistings are bad for the equity markets. If anything, I think it is quite a healthy trend," said Christopher Chan, head of the investment banking unit of CIMB Group.

A healthy trend?


firstly, I wrote on this delisting or privatisation issues before. ( see Privatisation Issues )

  • The issue of privatisation and the subsequent delisting of a listed subsidiary.

    Generally there are two ways companies can be delisted from a stock exchange in.

    The first case is the enforced, compulsory delisting of a company, in which the stock exchange forces the delisting of the stock because the listed company has failed to comply with the stock exchange listed requirements. And these are usually based on commercial reasons in which the listed companies simply cannot operate in a profitable manner.

    The second manner a company can be delisted from a stock is where the company voluntary informs the exchange that they no longer want to be listed. And a variation of this case, is the delisting of a listed subsidiary is made by its holding company, in which the minority shareholder of the listed company is forced to choose between the offered compensation price or risk being involved in a private company, which would ultimately offers no transparency rights.

    I have no problem at all with the first case. These are them koyak companies. Chap-lap companies which are losing money like crazy.

    The second one, the privatisation and the subsequent delisting of the listed subsidiary, this one i really dun like at all.

    It's just totally unfair to the minority shareholder and it makes a total mockery of the whole stock exchange.

    Listed Companies should not be given the approval so easily to privatise their listed subsidiary company in which the general investing public is forced or threatened with the issue of delisting. And as mentioned earlier once the company is delisted this offers the investor no transparency rights at all. So when a listed company is able to list and delist their subsidiary companies as per their whimps and fancy this would make a total mockery of the stock exchange.

    And what about the general offer price for the minority shareholders stake in that listed company? Would the minority shareholders get an offer that is fair or would the minority shareholder be placed in a disadvantage position? Would the premium offered over the existing share price to adequately compensate the minority investors?

    If no, this ultimately means that the minority investors would never be given a chance to being adequately compensated for the permanent withdrawal of a good investment opportunity.

    And if this is the case, then this would contradict the government's plan to woo more investors into Bursa Malaysia cause investing would have indeed turned very unattractive, a game which is very biased against the investing public. ( see also:
    Privatisation Issues: MetroJaya )

The news article continued by saying:

  • "Chances are minority shareholders will re-invest in the stock market if they had made money from delistings," he said at the National Mergers & Acquisitions (M&A) Conference in Kuala Lumpur yesterday.

Oh yes, there was probably some money made from delisting.

But is this a JUST offer?

Offering say 3.00 for something that is worth 8.00, just because it was trading at 2.00 does mean that money is made ....

BUT again is the offer JUST?

Fair for speculators/traders trading/punting into the stock. They made a nice profit.

But do not forget the minority shareholders/investors exist too!

Remember the market needs speculator just as it needs the minority shareholders.

If the minority shareholders keep getting short-changed like this, and if this keeps happening, will there be any more minority shareholders in the future? The market needs the minority shareholders. These are the ones holding on to their shares during good times and more important, during bad times. If all minority shareholders thinks that this is a rotten game, what's left? Who wants to play in an unfair game?

In my opinions, it's a crying shame because the money offered is worth peanuts. Lollipops.

Flip it around.


These general offer is made when there there is a privatisation exercise. An offer to buy shares from the minority shareholders.

A business offer if you would say.

Since this is a business offer, to buy the shares, why must the minority shareholders sell at a discount?

And worse still, why sell at a discount?

And worse still, why sell at such a HUGE discount?

Does anyone does such business practise logically?

And to make it worse, take the 2.00, 3.00, 8.00 into perspective.

So the share is only trading at 2.00. If a GO is made for this share at 3.00 which offers a nice reward of 50%, is the GO offer fair when we know the share should be worth 8.00?

Dare say fair?

And if this continues, who wants to invest in the share market anymore?

And to take the matter worse, these comments are coming from an investment bank that is so involved in privatisation deals. Take this snippet from a recent Business Times article on Worldwide. Note how CIMB is playing an active part.

  • The proposed exercise is not a conventional general offer (GO), but a scheme of arrangement (SOA) to be implemented under Section 176 of the Companies Act, 1965.

    Under the exercise, PKNS-Federal Furniture International (M) Sdn Bhd, a wholly owned subsidiary of PKNS, will be the special purpose vehicle (SPV) that will Worldwide private.

    First, PKNS will inject its 51.03% stake in Worldwide into the SPV, which would then offer RM3.50 cash to acquire all the remaining shares in the company.

    The purchase of the rest of the shares is estimated to cost about RM300mil.

    CIMB SI Sdn Bhd will subscribe to RM75mil redeemable preference shares in the SPV as part of the financing arrangement for the SOA.

Tuesday, August 29, 2006

Scomi again

Scomi reported a record earnings of 23.657 million. It's highest ever.


Its nett debt position is now at 903.946 million.


Compare that to what I just wrote the other day... Regarding Scomi Group Again

  • Yes, the sales and net profit has increased a lot but do you see any creation of wealth?

    Back then, 03 Q2, Scomi Group was a simple stock earning 4.037 million for the quarter. But it's net debt was a mere 7.515. Very manageable.

    Today Scomi? 06 Q1, Scomi Group is now a complex Godzilla, earnings some 16.069 million for the quarter, which is about 4 times more than it earned back in 2003 Q2. Fantastic. Bravo. But just look at the cost of such engineering of wealth. Scomi Group is now in a nett debt positiion of $846.778 million.


There are some articles on The Edge Weekly.

Cover Story: Close to tipping point

Stories By Lim Ai Leen

Cover Story: Shah Hakim speaks
The Scomi Group CEO talks candidly about earnings, shareholder returns and Kamaluddin Abdullah

Cover Story: How it all started

Percepts of Prosperity?

The following is a very interesting piece from Rob Kirby at FSO.


Precepts of Prosperity

For those of you who are ‘caught up’ or bought into the notion that the status quo either is or has been great for all of us, please consider the following sage words from Mr. Nelson Hultberg’s wonderful treatise, Contrarians and The Keynesian Myth,

“As recorded in The Statistical History of the United States, real wages for the workingman tripled in the years 1850-1913, and the GDP increased over 500% averaging 4.3% annual growth from 1870-1913. This was all done without any inflationary infusions of fiat money from the Fed because there was no Fed. This highly productive era, based upon the "barbarous relic" of gold, was accompanied by an actual deflation of prices. From 1800 to 1913, there was an overall 30% reduction in the Consumer Price Index from 43 to 30. 6 That's right, we had 4.3% annual growth amidst gently deflating prices all without government fiat money, all without FOMC pooh-bahs, all without today's Gargantua on the Potomac.”

It is not until we view economic growth, productivity and prosperity in this light that one might ‘make the connection’ and realize why economic growth has come to embody what we nowadays accept as such.

One needs to consider that the very nature of all fiat money systems implies that ALL MONEY is, in fact, loaned into existence. This fact [that all fiat loans are repaid principal PLUS interest] dictates that the money supply must FOREVER expand to simply service the existing debt. An ever expanding money supply juxtaposed against the constraints of the earth’s FINITE resources is fundamentally foolish and unsustainable with a completely predictable outcome.

In this light, money growth as we know it is more akin to CANCER – a type of growth that touches so many of our lives – which generally harms [or kills] the host,

Cancer is a class of diseases characterized by uncontrolled cell division [growth] and the ability of
these cells to invade other tissues, either by direct growth into adjacent tissue (invasion) or by migration of cells to distant sites (metastasis). This unregulated growth is caused by a series of acquired or inherited mutations to DNA within cells, damaging genetic information that define the cell functions and removing normal control of cell division. ...

In case any of you are wondering, here’s a graphical depiction of what Central Bankers – cheered on by BIG GOVERNMENT – have done to our money supply:

Fed Res. Chart compliments of Jesse:

By observing the chart above, is it not obvious to everyone how closely correlated money supply growth is with virtually everything? Since 1996:

  • Has the stock market not doubled or tripled?

  • Have housing prices not done the same?

  • What about the price of crude oil?

  • How about commodities prices?

  • How about the value or purchasing power of the dollar?

  • Deficits?

Do the words of the Fed, namely,

“….the relationship between growth in the money supply and the performance of the U.S. economy has become much weaker,….”

seem credible to ANYONE?

In the end, perhaps the real question is whether or not we will opt for something resembling the discipline of the gold standard, how long we’ll all be prisoners in our own homes or maybe even how many of us will be lucky enough to be cancer survivors.

Monday, August 28, 2006

Mieco: Part VI

In Mieco: Part V, I wrote the following:


In Mieco
What a huge difference! No?

And even if Mieco’s earnings does turnaround… isn't there a possibility that whatever earning derived from its new plant might be used to pay for its debts? And if so, what’s left then for the investor?


Mieco last traded at 1.37. Its warrants closed at 0.50.
Still think
that now is an opportunity to invest in the stock?

How about avoiding?
How about selling?

Yes, again… there is no doubt that when Mieco’s new factory is fully operational, there is a huge possibility that Mieco’s earnings will turnaround.
But the biggest issue is: WHEN!


Consider this.. if Mieco’s new plant needs another 6 months or so to start producing (if only hor.. me have no idea when its factory is ready) and in the meantime Mieco’s quarterly earnings continues to decay...just imagine what would happen to Mieco’s share price? Isn’t there not a possibility that the share price might continue to drop some more if and if Mieco’s earnings does not improve?

Isn’t it more prudent to avoid the share until we have better earning visibility?

Why be a hero in a hard place?
Why take such unwarranted risk in the stock market?

Do we want to end up as a zero?
Think about it
dude… :D

28th Aug 2006.

Mieco last traded today at 0.985 sen!

Mieco reported its quarterly earnings today, reporting a net earnings of 2.891 million.

Remember, the first sign of weakness was stated in Mieco. Quote: "As noted, the first sign of weakness in the company’s earnings happened when Mieco announced its 03 q4 earnings on 24th May 2005"

And this is what i stated in Mieco: Part V. Quote: " Isn’t it more prudent to avoid the share until we have better earning visibility?"

So we have the inital sign of earnings turning.

But the balance sheet is still looking awful!

Loans total over 220 mil. Piggy bank cash is a mere 18.8 million only.


Saturday, August 26, 2006

Top Glove fined

Well the fine was expected when the law was broken.

Top fine for Top Glove Corp

  • PUTRAJAYA: A whopping RM11.4mil fine! That is the amount that Top Glove Corp Bhd, which was caught with 1,769 illegal workers on Aug 16, will have to pay.

    It is the largest fine ever imposed on an employer for hiring illegal workers in the country’s history.

    Immigration enforcement chief Datuk Ishak Mohamed said the Klang-based glove-making company has also been asked to pay RM2.3mil in outstanding levies for the illegal immigrants they hired.

    Ishak said the previous record fine of RM500,000 was imposed by the Johor Immigration Department on a construction firm for a similar offence in 2000.

    On Aug 16, Ishak led a raid on the factory which was found to have hired more than 1,000 illegal foreign workers who were either working without permits or with expired permits.

    However, the department did not detain any of the illegal workers to ensure that the company, which is public-listed, could fulfil its overseas orders.

    “I urge the public to continue to help the authorities identify unscrupulous employers. In the case of the rubber glove manufacturer, we were successful because we were tipped off,” he added.

    Top Glove executive director K.M. Lee said last night the company would appeal on Monday for a reduced fine.

    “There are a few mitigating factors. Firstly, the workers came in with proper papers. “Not a single one of them came in without a passport,” he said.

    Secondly, it was an administrative failure on the part of the company and it was not intentional. Thirdly, when the company discovered the problem last month, it took steps to renew their papers, he said.
It would be nice to see the law be enforced and that Top Glove's appeal be rejected. The bottom-line is they broke the law and if the authorities are not strict on such issues, how do we expect a better future?

Think about this...

Laws would be totally useless if they can be broken and easily appealed.

Tuesday, August 22, 2006

Sunrise or is it sun down?

I remember this stock.

This was one stock which a couple of years back had tons and tone of conversion of ICULS. So despite its goods earnings, the earnings was always diluted for the minority shareholder.

The earnings was always diluted for the minority shareholder.

The above chart explains it so clearly. If you look at the one-year chart of Sunrise, this looked like a decent stock, right? See the lows of 1.20? It closed yesterday at 1.51. What's wrong?

Yeah, so what's wrong. Consider this. In fy 2004 Sunrise made 33.359 million. In fy 2005, it made a whopping net earnings of 104.692.

Given any other stock, such performance would have warranted Sunrise to be one gem of a stock.

But... Sunrise had this ICUL worth some 74.167 million and some 18.000 million ESOS. There is one nice table one can see clearly what I am talking about...

Sunrise had a 3 for bonus issue: see this
link (click on the attached table)

Assuming no conversion of ICULs, Sunrise would have 302.298 million.

But after conversion of ICULS, which means after the entitlement of the 3 for 5 bonus issue too, Sunrise should have 449.765 milllion.

Difference? Dilution caused by 147.467 million shares. And based on 302.298 million, this meant 48.8% new shares were issued! Or 48.8% dilution in earnings. (sunrise today, shows it has 424.534 million shares)

Isn't it clear why despite the incredible earnings performance from Sunrise, where the earnings almost tripled, the minority shareholders didn't really benefit as much?

Is this what they call share market?

Does the minority shareholders feel that wealth is being shared?

This was one huge reason back then to avoid the stock. It simply wasn't worth it.

Now Sunrise reported its earnings yesterday. It wasn't too nice.

What's even not too nice was the manner they lost the money and the manner the management is treating the issue.

Sunrise bullish on prospects for FY07
By Thomas Soon, 21 Aug 2006 10:10 PM

Bhd is bullish on its prospects for the current financial year ending June 30, 2007 after making a prudent provisioning for one-off impairment losses totalling RM87.4 million in the previous year

I am going to write my comments in red.

Sunrise Bhd is bullish on its prospects for the current financial year ending June 30, 2007 after making a prudent provisioning for one-off impairment losses totalling RM87.4 million in the previous year. ( 87.4 million impairment losses. Wonder what is impairment losses?!! )

Due to the provisioning, the property developer posted a loss after tax of RM58.69 million for the three months to June 30, 2006 against a profit after tax of RM30.31 million a year earlier. Profit after tax for FY06 fell to RM4.53 million from RM104.35 million in FY05.

For FY06, Sunrise posted a revenue of RM359.2 million, which is about the same level as the previous year. Despite the provisioning, Sunrise declared a first and final gross dividend of 6 sen per share.

The impairment loss of the historical assets involved two parcels of leasehold land in Kajang (RM67.4 million), a piece of land in Mersing (RM8.4 million) and the land on which stands the American International School at Carlington in New South Wales, Australia (RM11.6 million).

The parcels of land in Kajang and Mersing were bought in 1996 and 1994, respectively. The impairment loss was done after a recent revaluation exercise by professional valuers, while the provision on the Australian operation was done after its decision not to continue the loss-making operations of the school. (Oh my god!! Bought in 1996 and 1994. Say, now is 2006. Impairment loss for assets bought some 8-10 years ago. So where is the professional valuers then? And how could the impairment losses be so huge? Huh? Huh? Huh? )

Sunrise executive chairman Tong Kooi Ong said the provision did not in any way affect the group's sales, operations and cash flows. He said its management decided on the provision in line with a more prudent practice. (excuse me, is this what you call prudent? How about an attempt to explain what happened 8-10 years ago? Where was the professional valuers then? And how could the impairment losses be so huge? An impairment loss of 67.4 million for 2 pieces of leasedhold land in Kajang bought 8-10 years ago is totally astonishing! What happened? Don't the shareholders have the right to know? )

Monday, August 21, 2006

Crest Builder

Crest Builder just announced its earnings. It's impressive..

   Crest Builder Holdings Bhd (8591.KU) - Malaysia
2nd quarter ended June 30:
Figures are in Ringgit (MYR).

2006 2005
Revenue MYR54,119,000 MYR63,443,000
Pretax Profit 6,590,000 5,464,000
Net Profit 3,695,000 2,923,000
Earnings Per Share 3.00 Sen 2.60 Sen
Dividend Omitted Omitted

6 months ended June 30:

Revenue 113,017,000 116,893,000
Pretax Profit 15,248,000 12,844,000

Net Profit 9,322,000 8,048,000
Earnings Per Share 7.70 Sen 7.10 Sen
Dividend Omitted Omitted

Crest Builder closed at 0.97 sen. Down 2 sen.

Ok, so what's wrong?

Crest Builder current earnings of 9.322 million for its first 2 quarts of current fiscal year its much more than what Crest Builder did last fiscal year same period. Crest Builder managed 8.048 million for last fiscal year.


Remember this blog posting: Ze Numbers Game: II

So Crest Builder although doing 'ok' and perhaps 'good' with half year earnings totalling 9.322 million but just how good is this earnings when OSK numbers is projecting an astonishing earnings of 41.3 million for full year fy 2006!!!!!!!

So what do we have??

Ahem.. 'lost' research report.. amazingly 'flying sky' earnings projections...

Have a read again:

Back in April 2005, OSK wrote about Crest Builder. Price back then was 1.44. OSK gave it a price target of 2.59.

And I wrote that blog posting,
Ze Numbers Game on Nov 2005.

Here is an extract of what I had written then.


And this is how OSK valued Cresbld:

  • However, by taking into account only the basic shares outstanding, we obtained a fair value of RM2.59 based on FY06 earnings, which provides an upside of 72.7% to its current share price.


See onot?

And they based it on fy 2006 earnings! Earnings which went bang! bang! bang! like this below:

15.5 -> 16.2 ->
26.7 -> 41.3 -> 50.7million.

Fiyoooh... 41.3 million!!!

Incredible isn't it?

2005 FY projections is already perhaps a bit too optimistic at 26.7 million... but no... OSK did not based their valuations upon those numbers
but instead they based it at an even more optimistic earnings of 41.3 million!!!!!!!!!!!!!!!

Now wouldn't u say that this is a bit too optimistic?

And when they make such optimistic projections, this simply allows them to create a stock with such a great upside potential (72.7% wor!) when they make their so-called BUY recommendation!

ps. Cresbld closed at 0.795 today. (back in Nov 2005)


And how did Crest Builder did for its fiscal year 2005? Well have a look at its last reported quarterly earnings on Feb 2006.

Crest Builder made a net profit of only 12.198 million.

And how did OSK played ze number game?

Well the table below says it all...

OSK had projected an earnings of 26.7 million! Crest Builder only made a net profit of only 12.198 million.

Now check this out, today OSK has a brand new report on Crest Builder again.

Price of Crest Builder is now 1.12 and OSK has given it a 12-month target of 1.49.

LOL!!!... yup... just 1.49! (ps. In April 2005, Price back then was 1.44. OSK gave it a price target of 2.59!)

Wait... check this out too.

Ahem.. can you see that they have projected an earnings of 31.9 million for Crest Builder's fy 2006 earnings and an earnings of 35.2 million for its fy 2007.
(last April 2005, OSK projected 41.3 million!! Does this mean they are less optimistic? LOL!)

And as stated in OSK own table, this translates to a 161.7% increase in earnings for this fiscal year!

So for a stock that had a whopping decline of 25% in fy 2005, is projected to grow 161.7% this fiscal year.

Highly incredible, isn't it?

Now check this out also...

The below is a screen-shot of their reasoning...

Did I miss a report on Crest Builder since last April 2005? This is because the writer is saying:

  • CB's stock price has gained 30.2% since our last upgrade to BUY recommendation.

Ps... does someone have a copy of that report? ... cos I find it really strange since I can't even search for this report in their archives.

  • Group is currently trading at a forward PER of 5.1x, which is trading at a significant discount of 44.2%

It would be good to note that it is CHEAP because their forward PER of 5.1x is based on an earnings which is projected to grow 161.7% this year!

LOL!! Any stock which can grow so much would surely be cheap. Yes or not Shirley?


Saturday, August 19, 2006

Regarding Scomi Group again.

Dedicated to The Killer! :-)

On 6th May 2006, I wrote the following:

I had actually made a posting on Scomi Group before. Let me reproduce what I have written on it. ( Sorry dude, it's just have gottabe long! )


Firstly, I have to say this. IPO subsribers to SCOMI would be really darn please with their investment if they held the stock from the start to now!

Scomi was offered to the public at a price of 1.38. Listed on May 2003.

In April 2004, there was a 3 for 5 bonus issue and then a 1 into 5 stock split.

  • 08/04/2004 Entitlement - Others

    For illustrative purposes, a shareholder holding 100 ordinary shares of RM0.50 each in SCOMI on the Entitlement Date shall be entitled to 60 ordinary shares of RM0.50 each in SCOMI pursuant to the Bonus Issue. Subsequently, his/her entire 160 ordinary shares of RM0.50 each shall be subdivided into 800 new ordinary shares of RM0.10 each in SCOMI.

So say, for simple illustrative purpose, someone subscribed to 5,000 shares of Scomi at 1.38 during Scomi's IPO, their capital outlay will be 1.38x5 = 6900.

So after the stock bonus, this investor would now hold 8 lots of Scomi. And after the stock split, the investor would be having 8x5 = 40 lots or 40000 shares.

So at closing price of 1.17 (this was the price of Scomi on 3rd Sept 2005), this investor's investment would be worth 46,800.00.

Which is really a darn good investment return!!!

And the picture below says it all!

So how did Scomi do since its listing?

For its fiscal year 2003, Scomi Group announced an earnings of 14 million.
For its fiscal year 2004, Scomi Group announced an earnings of 61.4 million.

Absolutely commendable. In fact, some would call it as brilliant!

So for the IPO investor, buying the stock of Scomi is looking at his/her company's net profit grow from 14 mil for fy 2003 grow to a very impressive 61.4 million for fy 2004.

Basically, isn't this what we all want in a company when we invest in it?

The company is making more and more moola each year!


Now the question is or rather the issue is, we all know that Scomi is growing explosively via acquisition of companies or some would cynically call it the engineering of profits via acquistions.

Anyhow, I guess it would do no harm and it would makes sense if we dig deeper, rite?

And this can be done via some simple observation of its quarterly performance. Just some simple comparison of some key figures.

At the start (03 Q2 ), we were looking at a company with the following characteristics...

  1. Company was making about a quarterly net profit of 4 million.
  2. Cash was 11.102 million versus Total loans of 18.617 million. (a net debt position of 7.515 million)

Next we look at 04 Q1...

  1. Company is now making around 7.4 million per quarter. Fantastic.
  2. Cash is now 126.963 million with loans of 29.783. (net cash of 100.180 million). Fantastic.
  3. Slight worries. Trade receivables is now 113.017 million.

A very interesting footnote was found in the cash flow statemtent:

  • 125 million was generated VIA SHARE PLACEMENT EXERCISE and entered into the company's piggy bank.
Let's watch what happens next...

Now we are looking at 04 Q2.

Good points.
  1. Net profit is now 9.252 million. Just the same quarter, a year ago, Scomi was just a company making 4.037 million. Company is making more money isn't it?
  2. Cash stands at 69.975 million versus total loans of 30.820 million. (A net cash position of 39.155 million).
Fantastic isn't it?

But here comes the worrying part..

  1. Trade receivables is now at 120.654 million. (Hmmm... a worrying signal? Hard to say at this moment of time cos after all this quarter Scomi showed a sales revenue of 92.661 million.)
  2. Cash flow. Starting cash was at 126.963 million. A quarter after a share placement issue, in which Scomi generated 125 million in this fund raising exercise. At the end of the quarter, cash is only at some 69.975 million. Where ze Moola go???? (ah ze classical arguement of a company using leverage to expand and grow the company!)

Scomi reported that earnings on 11th Aug 2004.

Let's watch happens in Scomi's next quarter, 2004 Q3.

Good point:

  1. Net profit is now 23.339 million. 5 quarters ago, Scomi was just a company making 4.037 million. Company is making more money isn't it? Isn't this what u call explosive growth?

Fantastic isn't it?

And again, here comes the worrying part...

  1. Trade receivables is now at 214 million. (Hmmm... again a worrying signal? And again hard to say cos Scomi had sales revenue of 211 million for the quarter and since with the company made making more sales, more receivables is accumulated, rite?)
  2. Cash is now at 90.668 million but the loans is now 514.669 million. Scomi is now in debt of 424 million!!!! ( A huge worry? )

A flag has been raised, eh? Them same old worrying issues is getting more worrying, isn't it? Time to exit da bugger?

Scomi reported that set of arnings on 3rd Nov 2004.

Next quarter, 2004 Q4 was pretty dull. Pretty much the same old, same old. A neither here or there quarterly earnings report.

So fast forward to 2005 Q1 earnings. Which was really 'interesting'..

Soooooo many issues!!!

1. Net Profit is only 14 million? Big worry? Down from 20+ mil on a q-q basis...
(ahh.. again... some will argue cos on a y-y comparision.. this 14 million net profit is still much better than the 7 million it earned a year ago).

2. Trade receivables is now 333.889 million. Now this trade receivables is NOW a huge worry cos quarterly sales is now 229.236 million only. Where is that extra 100+ million of receivables coming from? What if a huge portion of these trade receivables turn bad? Bad debts then?

3. Loans? Loans is now 457 million. Down from 540 million a quarter ago.

4. Total cash increased to 118 million from 86 million a quarter ago.

5. Is 3 and 4 a good point? My answer is NO. If one looks at Scomi's Cash flow, Scomi's made yet another share placement to raise cash. A placement which saw Scomi raised 145.476 million.

So what we have is:

Scomi raised cash from placement of shares which is then used to pay off some of its loans....

But how does one evaluate Scomi's earnings performances? Surely if one is a buyer of Scomi's placement shares, one would probably not be too happy with it cos the bottom line is Scomi's net earnings declined from 20+ million to just 14+ million.

Now given 1,2, 3 and 4 and most importantly point 1, Isn't the time to really to exit this bugger?

Scomi reported this earnings on 25th May 2005.

Scomi closed at 1.40 on 25th May 2005.

And here comes the company most recent earnings (in Sept 2005)

And how did Scomi do?

1. Net earnings came in at 13.351 million. Which was down from 20 million plus earnings it earn a couple of quarters ago...

Now why issit such a huge worry?

1. Trade receivables is now a whopping 374 million.

2. Loans. Total loans is now 511 million.Up from a total loans of 457 million a quarter ago. Hmmm.... if one looks at the bigger picture, Scomi did a placement, paid of some 80 million plus in loans but come the next quarter, it borrows yet again. Doesn't it mean that Scomi is now back at square one? At the peak, Scomi total loans once stood at 540 million!!!

How? Now Scomi has been on a sell-off since May. Down some 30% and it is not too surprising eh?

Let's re-examine what has been said.

At the start (03 Q2), we were looking at a company with the following characteristics...

  1. Company was making about a quarterly net profit of 4 million.
  2. Cash was 11.102 million versus Total loans of 18.617 million. (a net debt position of 7.515 million)

8 quarters later, after countless of acquisitions and 2 share placement and sooooooo many ESOS....

We are now looking at....

1. A company making 13 million per quarter.

Compare to the 03 Q2 in which Scomi made only 4 million. An increase of 9 million So company is making 3.25 times more moola.

2. Company cash balance is now 106.119 million. Total loans stand at 511.613 million. Company is now in a net debt of 405.494 million.

Comparison. In Q2, company net debt position was a mere 7.515 million. Now the net debt position has increased by a WHOPPING 53X.

Justifiable given its current earnings? (some would ask: Does it make sense to increase ur total debt position by 405 million to make that extra 9 million in profit???? )

how? how? how?

Would it be wrong to say that this is an insane strategy employed by Scomi????

Oh btw, Scomi now has 991,130,700 shares. How signifacnt is this? Well, back in 03 Q2, Scomi Group had just around 91 million shares! ;p


That was back in Sept 2005. Sorry mate to bore you with all those details but I do reckon that it is useful to understand why Scomi rose so high and why its share price was declining quite a lot late last year (Scomi traded as low as 0.95 back in Nov 2005!).


In Nov 2005, Scomi announced its Q3 earnings. Scomi quarterly net earnings increased to 16 million.

In Feb 2006, Scomi announced its Q4 earnings. Scomi quarterly net earnings increased to a whopping 109.539 million!!!

So let's look at how did Scomi do since its listing...

For its fiscal year 2003, Scomi Group announced an earnings of 14 million.
For its fiscal year 2004, Scomi Group announced an earnings of 61.4 million.
For its fiscal year 2005, Scomi Group announced an earnings of 151.692 million.

And there you have it mate, yes it is true that Scomi has an astonishing growth rate!

But how about them points again? Well, as at its last reported earnings...

  1. Cash is at 87.595 million.
  2. Trade receivables has increased to 438.430 million.
  3. Group's borrowings is not at 918.363 million.

And yes, I do understand your issue that leverage can be used to generate a much higher revenue but on the other hand, I do hope you realise that this leverage issue is a matter of personal views and opinions. Me, for one, believe that too much leverage can turn deadly if one is not prudent enough.

And by the way, from my live quotes, I do note that as of today, Scomi Groups' number of shares is now 996.208 million shares!!

Yup, it increased yet again. Which means based on this enlarged share base, Scomi's current eps is now 15.2 sen. Ok?

And yes, I had mentioned the perils of a company issued placement shares.

Currently, Scomi does have the earnings to justify its strategy but do remember what happened back then in Sept 2005. Look at how the share tumbled when the earnings wasn't there. Do take note of this issue. It could well happen yet again but then on the other hand, if the Scomi 'produce' those earnings, the market could well go ga-ga over the share again.



19th Aug 2006

Scomi reported its 2006 Q1 Earnings on 25th May 2005.

Quarterly rpt on consolidated results for the financial period ended 31/3/2006

The following table simple table says it all. There different point of time to highlight the progress of Scomi Group as a company.

Look at the sales and net profit numbers.

Yes, the sales and net profit has increased a lot but do you see any creation of wealth?

Back then, 03 Q2, Scomi Group was a simple stock earning 4.037 million for the quarter. But it's net debt was a mere 7.515. Very manageable.

Today Scomi? 06 Q1, Scomi Group is now a complex Godzilla, earnings some 16.069 million for the quarter, which is about 4 times more than it earned back in 2003 Q2. Fantastic. Bravo. But just look at the cost of such engineering of wealth. Scomi Group is now in a nett debt positiion of $846.778 million.


Friday, August 18, 2006

Them NEW expressions.

I really like Martin Goldberg's commnets on them New expressions mentioned in his Market Wrap.

Finally, the “New” expression… You know, “age 40 is the new 30.” “Oil at $70 per barrel is the new $50.”

Here are a few more "New” expressions.

  • Cisco is the new Radio Corp.
    Buybacks are the new dividends.
    A P/E of 20 is the new 10.
    The iPod is the new Walkman, is the new 8-track is the new reel to reel.
    Middle class is the new poor.
    The corporate-owned press is the new independent press.
    Greenspan is the new John Law.
    Bernanke is the new Greenspan.
    Regarding dividends, 1.5% is the new 3%.
    Speculation is the new investment.
    Debt is the new savings (so is home equity)
    Wal-Mart is the new Woolworths.
    General Motors is the new Chrysler.
    Toyota is the new General Motors. (The Camry is the new Impala.)
    Economic statistics are the new lies.
    Financial engineering is the new research and development.
    ……………. is the new Enron.
    World domination is the new world peace.

How true eh?

The brand NEW world.

Thursday, August 17, 2006

Spin masters keep spinning:

The following was taken from Mike Hartman's FSO Wrap Up.

I guess I always seem to get a bit suspicious and skeptical whenever the mainstreamers parade Abbey Joseph Cohen of Goldman Sachs out on CNBC to tell everyone where stock prices should be. Bottom line…she says stock prices should be 15% higher than they are today. If she is correct, the SPX should move from 1,290 to 1,483. It may sound far-fetched, but that’s her story and she’s sticking to it! Realizing the consumer is all but tapped-out, Ms. Cohen believes the driver to move stocks higher will be increased capital spending from corporate America and increased export sales due to a lower dollar and increased economic activity from overseas. Thanks Abbey, but I think I’ll stick with the resource sectors (things people need) because understated inflation is baked in the cake!

Here is where I believe she came up with the notion that stock prices are undervalued by 15%. If you look at stock prices relative to inflation, stocks are clearly underperforming. The S&P 500 Index moved through the 1,300 mark back in March of 1999. We are now more than seven years down the road and the index is once again approaching 1,300. Just to break-even against inflation, the index would need to stand at 1,483 to represent the same value it did back in 1999. The number is actually higher, but I base it on inflation adjusted numbers through 2005 provided by the Inflation Calculator at I plugged in the data and the calculator reported as follows:

What cost $1300 in 1999 would cost $1482.68 in 2005.

Also, if you were to buy exactly the same products in 2005 and 1999,
they would cost you $1300 and $1139.83 respectively.

The S&P 500 needs to run 15% higher from where it is just to keep pace with inflation. Earlier I made the point that wages are actually negative relative to inflation, and now you can see that stock prices are also negative when adjusted for inflation. Most commodity prices are 200% to 400% higher than they were just a few short years ago, but wages and stocks are flat to negative. Higher mortgage rates, higher energy costs, record high debt burdens, and slowing home price appreciation are taxing the consumer’s discretionary spending. I can clearly see where the Perma-Bulls would like to take this stock market, but to see it happen we will need to see corporate America increase capital spending in the face of a slowing economy. We will also need to export some real goods to the rest of the world rather than simply continuing to increase our export of debt paper.

The Bulls could get their way with some improvements to the economic data, while at the same time maintaining the notion that inflation is not a problem. Frankly, I’m actually expecting just that between now and election time. “The economy is slowing but stable, and inflation is under control,” will be the mantra as we move into the Fall Season. Hey, crude oil even came down again in price today…no inflation with crude back down to the bargain price of $71.80! Politics and Wall Street spin are still ruling the roost in the financial markets as we move through these most uncertain and turbulent times.

The gains on Wall Street stuck like glue as Main Street begins to feel the crunch of a slowing economy! Just a couple weeks ago the Bears were telling everyone to be prepared with their crash helmets. Now we get some solid weakness in economic reports and the markets rally higher! The crash helmets have covered and today we see the Dow Industrials pounding higher by 96 points to 11,327, the NASDAQ Composite closed 34 points higher at 2,149 and the S&P 500 closed above key resistance with a gain of nine points to 1,295. The next few days should tell us if this is the beginning of the ramp-job into the elections, or if it’s just a nasty head-fake higher to flush-out the shorts! The Bears have a great case to present, but for now I wouldn’t underestimate the salesmanship of Wall Street Spin-masters to move stock prices higher.


See the case Mike is making?

Solid weakness in economic reports.

What does this mean?

Doesn't it mean that there is a strong solid chance that market earnings won't be good in the near future?

So why should the market run because of the solid possibility of weaker earnings?

Oh, the great Abbey Joseph Cohen came out guns blazing on CNBC saying that stock prices should be 15% higher.

And the spin masters keep on spinning.

Wednesday, August 16, 2006

Top Of Ze World: VIII

From AP News:

KUALA LUMPUR (AP)--The world's largest rubber glove manufacturer faces fines of up to MYR121.2 million ($33 million) for employing more than 2,000 illegal foreign workers, a company official and news reports said Wednesday.

However, Malaysia's Top Glove Corp. said it expects to be spared from paying the maximum penalty.

Immigration officers raided a factory in Klang town, west of Kuala Lumpur, based on a tip-off and found that work permits for 2,071 of its foreign workers had expired, Immigration Enforcement Director Ishak Mohamad was quoted as saying by the New Straits Times newspaper.

Another 353 workers had no permits at all and 72 were without passports, he said. However, they were not arrested so the factory's production would not be disrupted, the newspaper said.

"The managers gave the excuse that they forgot (to renew the permits) or there were too many of them, but we don't buy that," Ishak was quoted as saying.

The Star newspaper quoted Ishak as saying it was "the first time the department has come across a case involving such a huge number of illegal workers in a single premises."

Under immigration laws, an employer can be fined up to MYR50,000 for each illegal worker.

Ishak and other immigration officers could not immediately be reached for comment.

Top Glove is the world's largest producer of rubber gloves for medical, household and industrial use.

Media reports did not identify the company, but Top Glove officials acknowledged it was their factory.

"It is an oversight on our part but we are giving our full cooperation to resolve this and to ensure it will not recur in the future," company executive director K.M. Lee told The Associated Press.

He said the fine was expected to have only a "minimal effect" on company earnings, noting that courts usually only impose maximum fines on employers who hire illegal migrants who enter the country without documents.

Lee said the company had been careless because of its rapid expansion in recent years but steps have been taken to strengthen internal monitoring. Most of the foreign workers caught were Indians, with some from Vietnam and Indonesia, he said.

Top Glove has 8,000 workers in eight factories in Malaysia, of whom 3,600 are foreigners, Lee added. The company also has two factories in Thailand and two in China.

Top Glove shares were down 3.3% at midday Wednesday at MYR8.70.

Top Glove closed at 8.65.


1. Besides the issue of fines, assuming that the fines impact would be minimal, it now appears that Top Glove had been keeping its production cost low by engaging in such unlawful practise such as hiring illegals. So what's next?

Top Glove can't have this luxury no more. Right?

Which means its production cost will increase since they have to hire 'legals'.

Which means its bottom-line will be HIT in the future in regardless of the size of the fine.

2. Integrity issue!

This will stick out like a sore thumb!


If proven guilty, it means that Top Glove is willing to engage in such unlawful activities to boost its bottom-line.

So how much can an investor trust this company?

3. How do you rate the management handling of this crisis?

The initial excuse of forgetting to renew the permits was as lame as it could get.


past blog postings:

Top Glove..
Top Glove: Part II
Top Glove: Part III
Top Glove: Part IV
Top Glove: Part V
Top Glove: Part VI
Top Glove: Part VII

eB Capital: III

On the previous blog posting on eB Capital I wrote the following. Before I start, eB Capital announced its earnings yesterday.


Quarterly rpt on consolidated results for the financial period ended 30/6/2006

New comments will be in red font.


Boyplunger raised the following issue on eB Capital.

  • I noted Redtone Technology Sdn Bhd has been accummulating EB Cap. Currently owning about 1.9m or 7% -8%.

    Why is Redtone buying the shares of this company? That is interesting. Did i miss out something on the company's history.

Yes, I do understand that Redtone International has been buying shares into this company.

Why is RedTone buying shares into a company that has real problem in making a profit?

I have no idea.

And yes, I do understand your thinking rational. Because the justification is if RedTone International is willing to buy shares into the company, surely there must be something in the company that RedTone sees as value. And surely no sane company would want to buy a company if there is no profit to be made. Right?

Hence, the argument is of course, perhaps one should follow and mimmick what RedTone does!

But if that is the case, isn't one implying that when one company or one individual purchases a share of another company, the buyer(s) reasoning to buy the share is always correct?

Here is something interesing regarding is the buyer(s) always correct issue. This blog eB Capital II was written on May 18th 2006.

Look at the stock price chart of eB Capital during this period.

Stock last traded 1.23.

On May 18th 2006, the stock was trading as high as 1.70. Peaked at 2.00 on 5th June 2006.

But do we or would we ever know the true motives or intentions in such share purchases? Would we ever have the privilege to evaluate their reasonings in their share purchase?
If no, then aren't we making one huge assumption, which is the buyer(s) of the share(s) is always deemed correct?

Can such strategy go wrong? Did one sell this stock when it hit 2.00?

Let me give some examples on what could go wrong.

Take the series of past postings on Karensoft. Well, the boss has always been constantly buying back shares in the company. So is the boss deemed correct in his actions? Well as everyone is well aware, Karensoft has just been re-classified as the first GN3 stock in the Messdaq listing. Which is rather dead serious since this classification states that Karensoft financial health is in a utter dire straits. So was there 'value' in the share purchase? Or perhaps the boss was buying for personal reasoning, which sadly is the 'value of being a listed stock'. So if one had followed Karensoft boss actions in the market, how then? See the danger?

Or how about the infamous purchase of a controlling stake in the huge congolomerate, DRB-Hiccom? How much was the share purchase back then? Wasn't it around 3.50 or so? Ahh.. I am sure that you are aware that some argued that because since the controlling stake was sold at such a high price valuation, then surely there must be value in the stock since the stock was selling around 2.00 back then. And what's the price of DRB-Hiccom today? Would a follow you, follow me strategy work in this case?

On the other hand, there were success stories in stocks like Transmile.

Ah, I am sure you understand what I am trying to say.

There's simply no gurantees in such strategy.

Sometimes it works but sometimes it can be dead wrong.

So how?

What's the best gauge?

Look at eB Capital.

eB Capital supposedly specialises in wireless broadband technology.

There'e 2 things one can gauge it on since it's listing. Look at these past compilations I had made on EB Capital .

The first news clip.

  • With a current local market share of 0.54% in terms of broadband subscription, more efforts would be devoted to marketing its products and services to enlarge its share, he added.
    Meanwhile, eB Capital's historical earnings demonstrate its strong growth.
    The company registered a pre-tax profit of over RM1mil last year and an after-tax profit of RM560,000.
    Revenue increased to RM8.3mil in 2004 from RM2.5mil in the preceding year

And the next article...

  • Wireless Internet broadband provider eB Capital Bhd (eBCap) expects its subscriber base to grow in multiples of 10,000 over the next two to three years as it embarks on an aggressive recruitment drive after its listing on Mesdaq.

See how b4 listing, eB Capital boasted about its great potential and its track record.

After listing, eB Capital showed it true self.

How do you value such a company?

Secondly, take a look at eB Capital last reported earnings. Do you like what you see?

If you don't then... should you be bothered with what RedTone does?

And if I have to guess, perhaps RedTone wants to go into the wireless broadband industry.

By the way, based on current price of 1.70, do you reckon that eB Capital business is worth what the market is pricing it?

eB Capital reported a paltry sales revenue of only 2.730 million with a net loss of 236k, bringing half fiscal loss to 1.81 million.

So listed on 2nd Aug 2005. The company has yet to make a single sen of profit!!!

Now consider this, at the peak price of 2.00, eB Capital was valued at a mind-boggling 49.814 million!!!!!

Yes, the whole idea of creating MessDaq as a platform where small companies can raise capital for their business is a grand idea BUT companies like eB Capital is showing precisely the dark side.

Where on earth can such company be worth 49.814 million as eB Capital was worth back recently in June 2006?

Ah, the market has so far corrected eB capital insane pricing.

eB Capital last traded at 1.23.

Only 1.23.

Excuse me but this price is STILL INSANE!!!!!!!!!!!!!!!!!

Based on this price eB Capital is worth some 30.635 million!!!!!!!!!!!!

Look at the following snapshot of eB Capital's balance sheet obtained from its quarterly earnings yesterday.

See the piggy bank cash!!!

Think that is bad?

You haven't seen nothing yet babe!

Look at the company's borrowings!


See why I said that it's so insane that eB Capital is worth a whopping 30.6 million??????????????

Tuesday, August 15, 2006

Huge Wall Street Bonuses. Do they deserve it?

CNN carried an article from Reuters on Wall Street bonuses set to soar

Here is the bottom-line mentioned by the article:

  • Bonuses for bankers will probably jump 25 percent, and equities traders may take home 20 percent to 25 percent more, according to the study by Johnson Associates Inc., a New York compensation consultant.
  • Investment banking bonuses often comprise the bulk of overall pay. A top banker or trader can receive seven- or even eight-figure bonuses after a stellar year.
  • "A lot of people are already making an enormous amount of money" before bonuses, Johnson said. "Now they can make twice as much of an enormous amount of money."
Do you ever wonder if these are really INSANE money being paid?

Do you reckon if these bankers really deserve so much money?

And oh, where and how do you reckon these investment bankers make their money from?

Care to share your views and opinions?

Thursday, August 10, 2006

DVM: Part IV

Saw this article posted on

SC rejects DVM's placement
10 Aug 2006 8:37 PM
The Securities Commission (SC) has rejected DVM Technology Bhd's proposed placement of up to 35.2 million new shares of 10 sen each, representing up to 20% of its current paid-up capital

==> the SC rejected the exercise as "the SC is of the view that the proposed placement does not represent an adequate/comprehensive long-term solution to increase the company's operational profitability and liquidity".

Good job SC!!!

past blog postings on DVM:

DVM: Part II

Is the US housing market slowing?

Is the US housing market slowing?

Well Chris Puplava has some great graphic illustrations to prove his point in his Market Wrap:

The slowing seen in housing is beginning to trickle through the economy as real GDP in the 2nd quarter was only 2.5%, with GDP revisions reducing nearly 25 basis points from annual real GDP growth during the nearly five-year expansion since 2001. Here are a few further sources of a slowing housing market. Home sales are off 10% from their peak last summer, unsold inventories have soared to a new record, construction spending is decelerating after peaking in early 2004, and the national median home price has decelerated sharply from the peak seen in 2005 (see charts below).

Figure 3

Source: Dismal Scientist

Figure 4

Source: Asha Bangalore, The Northern Trust Company
Daily Global Commentary 08.07.2006

Figure 5

Source: Dismal Scientist

Figure 6

Source: Dismal Scientist

Homebuilder optimism has been falling for nine straight months, with July’s reading of 39 marking the lowest level since December of 1991.

Figure 7

Source: Dismal Scientist

Wednesday, August 09, 2006

Smoke And Mirrors!

Gary Dorsch of Sirchartsalot wrote an interesting piece: Central Bankers Operating behind "Smoke and Mirrors".

Here is a snippet of what he is saying:

The synchronized phase of monetary tightening by the world's three largest
central banks, the Federal Reserve, the Bank of Japan (BoJ), and the European
Central Bank (ECB), appears to be fizzling-out almost as soon as it started. The
Fed is widely expected to wind down its rate hike campaign on August 8th, less
than a month after the BoJ raised its overnight rate for the first time in five

The Fed is moving to the sidelines to join the central banks of
Canada and Korea, which declined to raise their overnight loan rates last month.
That might encourage other central banks to keep their interest rates on hold. A
residual quarter-point rate hike by the BoJ to 0.50% in the fourth quarter, and
two quarter-point rate hikes by the ECB to 3.50% are expected, before the big-3
tightening spree flickers out.

Central bankers are utilizing a strategy
of "Smoke and Mirrors," mesmerizing the traders with baby-step rate hikes, but
falling far short of the levels needed to shrink their money supply. Whether the
central bank is printing money to maintain an artificially low exchange rate, or
flooding the banking system with money to peg an artificially low interest rate,
the net result is the same - monetary inflation.

Is Investing In Defensive Stocks A Good Strategy?

This is something I always find so amusing.

When we invest in a stock, it's only commonsense because we find that the stock represent a truly wonderful business and we are given an opportunity to invest in it a great price.

Defensive stocks? LOL!

What about Offensive stocks?

Do you reckon investing in defensive stocks just because they are 'defensive' stocks a good, 100% safe strategy during a bear market?

Anyway I am writing this post because of the comments written by Frank Barbera posted on FSO market-wrap. What is truly great is that he came up with hard facts to back what he is saying.


link to article

Tuesday, August 08, 2006

Titan: Part VI

Titan's 2Q net profit down 70% to RM30m
By Alfean Hardy, 08 Aug 2006 7:04 PM

Titan Chemicals Corporation Bhd's net profit plunged 70% to RM30.26 million for the second quarter ended June 30, 2006 from RM102.21 million a year ago, but it expects a better second-half performance due to tightness in the Asian market supply for its polymer products.

Quarterly rpt on consolidated results for the financial period ended 30/6/2006

Titan last traded at 1.18!

This pictures says it all... err...

past blog postings:

Titan: Part II
Titan: Part III
Titan: Part IV
Titan: Part V


So here is Titan's earnings since listing:

2005 Q1 net profit 159.3 million (not listed yet)
2005 Q2 net profit 111.326 million.
2005 Q3 net profit 71.924 million.
2005 Q4 net profit 19.282 million.
2006 Q1 net profit 37.070 million.

2006 Q2 net profit 30.262 million. (announced today)

Out of those blog postings, this one says it all.

Titan: Part V

TITANic Bull Again?

Titan Chemicals announced its earnings yesterday. And this is how Titan has performed since listing.

2005 Q1 net profit 159.3 million (not listed yet)
2005 Q2 net profit 111.326 million.
2005 Q3 net profit 71.924 million.
2005 Q4 net profit 19.282 million.
2006 Q1 net profit 378.070 million.

The earnings look rather decent and it got some of the local news all excited. The Business Times has this header: Titan Chemicals Q1 net more than doubles; while the Star Business has this header: Titan first quarter profit up 149% to RM378m

Now the issue is 'the inclusion of a RM341mil non-recurring income from consolidation of its acquisition of PT Titan' which is nothing but mere accounting profit.

And if you minus this 341 million out, this is how Titan did since listing.

2005 Q1 net profit 159.3 million (not listed yet)
2005 Q2 net profit 111.326 million.
2005 Q3 net profit 71.924 million.
2005 Q4 net profit 19.282 million.
2006 Q1 net profit 37.070 million.

Which isn't all that bad but what irks me the most was mentioned in my initial blog on Titan

Now this is a company which sold itself to the investing public based on a repeated promise that it would earn some 604 million for its fiscal year 2005!

And how is Titan doing?

Oh, for those who like figures, let me be really cynical. Say we give Titan a helping hand, yeah spot the bugger a handicap of one extra quarter earnings. Guess what? If we add up these 5 quarterly earnings, Titan only earned 398.902 million. How? Can you imagine that with one extra quarterly earnings, Titan earnings is still no where close to the 604 million it promised during its IPO!!!!!!

Oh and the trailing earnings is a mere 239.602 million!

Yes, it is not easy making an earnings projection but when the projected earnings is so way off as in the example of Titan, it really makes you wonder. And worse still, those poor ipo investors bought Titan based on these incredibly optimistic earnings projections!

So how about the SC coming down really hard on buggers who make such incredibly optimistic earnings projections

How brown cow?