Skip to content
 

Skepticism on Alibaba and on our new war

You gotta marvel at Jack Ma. He started Alibaba in 1999. He’s now about to IPO it for $160 billion. No one has done that.

Should you buy Alibaba? Yes, if you can get it on the IPO — because the type will push it higher.

I have no idea if you should buy it post-IPO.

You and I won’t get shares pre-IPO. Right now I can’t even get a Red Herring for Alibaba — that’s the big document all IPO-going companies produce.

Impressed though I am with the Alibaba hype — and it’s been well orchestrated — I fear for Chinese accounting. A rat’s nest if ever there was one. Google Chinese accounting and you’ll see gruesome stories of sloppy Chinese accounting practices.

Alibaba has been on an acquisition spree recently. Back in mid-August, The New York Times reported:

On Friday, the company announced that it had discovered suspicious accounting at one of its acquisitions – a Hong Kong film company that it bought control of for about $800 million just two months ago.

The film company, the Alibaba Pictures Group, formerly the ChinaVision Media Group, said on Friday that it had discovered “possible noncompliant accounting treatments” involving insufficient provision for impairments on assets, or write-downs, which were not identified. The company said that it would miss an Aug. 31 deadline to report its earnings for the first six months of the year and that its shares would be suspended from trading until its audit committee could complete a formal inquiry.

If I were a Chinese entrepreneur, I’d salivate at the Americans’ enthusiasm for Chinese IPOs and I’d get myself onto that bandwaggon, asap — even if it meant being a little sloppy with my accounting.

Am I warning on Alibaba? Yes. Will getting my hands on the Red Herring make a difference? Maybe. Certainly a little knowledge wouldn’t hurt.

Want more stuff on bad accounting practices in China? Read this New York Times piece which begins:

In China, Detecting Fraud Riskier Than Doing It

It can be very risky to do things in China that are taken for granted in other countries.

Kun Huang, a Chinese-born Canadian citizen, is back in Vancouver after spending two years in a Chinese jail. His crime was contributing to research that led his employer to recommend short sales of Silvercorp Metals, a silver producer that is based in Canada but does its mining in China.

For the full gruesome story, click here.

In our personal investing, we need to remember three words — procrastination, mulling and NO.

Procrastination sometimes costs us opportunities. I may be totally wrong with my caution on Alibaba. I do know that when God closes a door, He always opens a window. Which means the next deal comes along very quickly. Often the same day. And it’s usually better.

Mulling is also called thinking. Like what could possibly go wrong? Does this match my “risk profile?” Would I rather have yield and safety than ionospheric profits? Skyhigh profits could also fall to earth faster I can say Jack Plumpudding.

No is my favorite word. It lets me keep what I have. It gives me peaceful sleep. I don’t have to justify to Susan or the kids why I just punted their inheritance on, yet another, insanity. No lets me play tennis better.

If you want an Alibaba prospectus,call Morgan Stanley and beg. Good luck.

The New York Times has a big, adulatory piece on Jack Ma. I haven’t fully read. I can do without the hype. The article is headed:

The Jack Ma Way. At Alibaba, the Founder Is Squarely in Charge

JackMa

If you have nothing better to do, read it here.

Tips:

+ Include only one request in each email. 99.9% of people can’t respond to more than one request. That includes me.) Send an email for each request.

+ The latest scam is giving away airline tickets. Sadly, the tickets and the airlines are fake and you can’t go anywhere. But you might end up paying for the “tickets” to nowhere.

+ A solid state hard disk is the absolute fastest way to speed up your computer. SSDs are getting cheap. So cheap you can’t afford not to have one. Rakuten is selling a 480 gig Kingston SSD for $250. That ‘s very cheap. Click here.

+ More memory is the fastest way to speed up your computer — desktop or laptop. The good news is that RAM memory is suddenly very cheap. I just bought 16 gigs of Kingston memory for my laptop from Amazon for just under $200. It previously had 8 gigs. But I was bumping into “running out of memory” messsages —  what with my heavy use of imaging and zillions of windows I keep open on my browser.

+ Despite my aversion to the cloud, I’ve been using Dropbox. And yes, it works great. My son’s team uses it. He emailed “dropbox has been great. My favorite feature is that it works. It is simple and it works. You have folders on your harddrive and they just sync right to the cloud without even thinking about it. You can share those folders with all your workmates, and do other things but the simple useability is best. I now have 1 TB (terabyte) through my personal account and have around 150 gigs stored at Dropbox. My work team has 10 TBs and a bunch of data (not sure how much). Access via mobile devices is awesome too. I use it on my iPad and iPhone all the time.”

Harry’s final caution on the cloud in general and Dropbox in particular: Buy one of those one terabyte $290 external hard drives from Apricorn (see right hand column) and keep backups yourself — just in case.

 + The 15 Best iPhone Apps You’re Not Using. They include SnapGuide, Iconical, Dark Sky (a weather app, the Newton family is addicted to), Dog Whistler, WeChat, Jelly, CamDictionary, Venmo, Wikitude, TalkTo, Sleep Time, Addappt, Coast by Opera, FileThis. for the full list and explanations of what the apps do, click here.

A comedy news channel made this up. All good humor has an element of plausability.

This year, in a bid to stem taxpayer losses for bad loans guaranteed by federal housing agencies Fanny Mae and Freddy Mac, Senator Bob Corker (R-Tenn.) proposed that borrowers be required to make a 5% down payment in order to qualify for a loan.

His proposal was rejected 57-42 on a straight party-line vote because, as Senator Dick Trickle (D-Conn) explained, “Passage of such a requirement would restrict home ownership to only those who can afford it.”

HarryNewton
Harry Newton who notes with sadness that our President is committing us to another war in the Middle East. And sadly doing it without Congressional approval. We can’t win this one.  It’s a mess over there. We can’t fix it. Better to concentrate on becoming energy independent at home and depriving them of the revenues they use to fund terrorism. Think Saudi Arabia (it supports the Taliban, al Qaeda, etc.). Think Iran (it supports Hezbollah.) Think  Qatar (it supports Hamas).

Barry Merchant, a reader, left a very prescient comment ton his blog yesterday. It’s worth reading:

I think someone should bring up the fact that our government’s account of the horrific events of 9-11 is ludicrous. Either they were involved in bringing down the 3 WTC Buildings or at the very least, they had foreknowledge of the attack and let it happen. Anyone who dares to question the official version is dismissed as a conspiricist. But the most outrageous conspiracy theory of all is the one concocted by our government. They told us 19 illiterate men armed with box cutters, who couldn’t even fly small Cessna planes, managed to hijack commercial airliners and fly them around for over an hour before crashing them into the WTC Towers and the Pentagon Building at 500 miles an hour defeating the most sophisticated air defense network in the world without any jets being scrambled to confront them. Then the third WTC building, a 47 story steel frame building also came down on that day in 7 seconds at free-fall speed on its own footprint just like the towers even though it wasn’t hit by a plane and only had small fires. Our government said they had no prior knowledge of the attack (even though they had been warned by the FBI) but somehow immediately knew Osama Bin Laden was responsible. Although the site of the WTC was a crime scene, the evidence was quickly hauled away and no investigation was done until the 9-11 Commission was formed to assuage public pressure. Even members of the Commission have said that investigation was a sham and a cover-up.

And as a result of 9-11 we instigated an ongoing war on “terror,” a tactic, not an entity. It resulted in two wars; against Afghanistan and Iraq that killed some 5,000 U.S. soldiers, wounded ~45,000 more, killed over a million Iraqis and Afghans, devastated their countries and cost us $trillions. It has also changed our American way of life for the worse including: the TSA, the NSA, warrantless wire tapping, unlimited detention without a trial, the extensive use of torture, secret gulags around the world, a presidential “kill list”, National Security Letters to individuals and companies requiring compliance and prohibiting disclosure to anyone, the militarization of our police forces, and on and on. And as comedian George Carlin used to say…….”And nobody seems to notice, nobody seems to care. The American dream is still alive……you just have to be asleep to believe it.”

I used to wonder how the German people could have gone along with Hitler’s nefarious regime. Now I know. God bless America.

Watch this C-Span interview with Richard Gage of Architects and Engineers for 9-11 Truth. Click here.

Funny that Alibaba is out of China, not Arabia. God bless Hollywood.

8 Comments

  1. bruuno says:

    Good for you for being open minded, Harry. I don’t know which “theory” rings true. The government narrative is odd, as odd as the crew in charge at that time. Both the official story and alternative get the spotlight but most of the damage here and in the world is done day to day while we go about our routines. Many 9-11s worth die every year from gun violence, just to look at one example. And how many innocent in the Middle East have died as “collateral” to the response to 9-11..which has done exactly what to improve our quality of life and security?

  2. Cliff says:

    Harry,
    For all of your investing faults, for your promotion of stocks that go nowhere, of your friends’ proclivity for “going to cash” at precisely the wrong time or “buying vigorously” at the wrong time, for all of your silly photos of Taylor Swift & endless, dull stories about power outages @ your country home, I never took you for a 9-Eleven denier. To give that nut-case an ounce of credibility for implying the U.S. government was behind 9-Eleven – on the anniversary of 9-Eleven no less – you should be ashamed.

    • laughnow says:

      Ha. Harry finally got one right..Merchant is on point..as it pertains to people like you, that are govt sycophants, that no light of truth will ever prevail in their reasoning. The facts he presented have been validated by multiple sources. Only fools dont duck when the punch comes at their face.

      • Cliff says:

        You’re probably a holocaust denier too. Same thing. Oh, and JFK wasn’t killed by Lyndon Johnson’s grandma, either, conspiracy nut. “Validated by multiple sources,” yeah, and everyone of these sources live in a home on top of a big hill where they’re tended to by men in white coats.

    • pahowley says:

      You’re right, Cliff.

  3. WestBeach02 says:

    Barry Merchant’s comments are as funny as Senator Dick Trickle’s. All good humor has an element of plausability.

    • pahowley says:

      Comedians both. And in the Senator’s case, dangerous.

      • WestBeach02 says:

        I actually watched the C-Span interview with Richard Gage. He really departed reality when he said with a straight face that it would take tons Thermite to bring down building 7, but he says that’s what happened. He insists it’s not possible to hijack 3 planes with box cutters and bypass NORAD. It was actually pretty easy with surprise on their side. Here’s a theory, Harry, how building 7 fell: The World Trade complex was built by mob-run unions in cahoots with corrupt John Lindsey, Abe Beam, and David Dinkins administration criminals, and they ripped off the funding by putting one bolt in each steel beam instead of 10 bolts, never dreaming they would ever be caught. Mr. Gage even admits they will not release the architectural designs for the building. You know how things work in New York, Harry, and my theory is more plausible than Gage’s tons of Thermite smuggled in by the CIA.