What a day for CCME, my comments this morning were only a pre-cursor to today's action. A firm called "Muddy Waters" either:
- sang the blues today about CCME or
- Muddied the Waters
Here are some headlines
- China MediaExpress Holdings, Inc. to Respond to Misleading and Inaccurate Allegations from Muddy Waters
- Allegations Of Fraud Rattle Chinese ADRs
- China MediaExpress: Groundwork, Research, And Videos to Disprove Allegations
The one thing that Muddy Waters is very clear about is that they are short CCME (as was Citron). So essentially, they have a ton of financial incentive to sow fear with innuendos and half truths. Could they be right? Of course they could, to some extent. But ask yourself, "why do they publish these reports several days after this headline: CCME: The Biggest Short Squeeze of 2011?"
To help the poor uninformed investor? I think not...
The day does make me understand why MagicDiligence just gave up on these stocks, they are clearly too volatile for the average investor. But I'd suggest for those with a longer time horizon and a stomach for some ups and downs and the ability to diversify a bit amongst the stocks that there are some very "satisfactory" profits to be made.
I do have my eye on a new MFI stock: CATO. I do have a chunk in cash, so I may pull the trigger in February, but I may wait for my next stock to mature in early March (KSW).