Tuesday, 23 June 2020
SMOL: Trust But Verify??? (2)
Read? SMOL: Trust But Verify???
Read? Hin Leong forged documents to mislead banks, has 'no reasonable prospect of being restructured on its own': PwC
Evidence further suggests that Hin Leong may have fabricated fictitious derivatives gains and trading profits to conceal accumulated derivatives trading losses of about US$808 million over the past 10 years. “On this assumption, it follows that the cumulative overstatement of profit in the company’s financial statements in the past decade amounts to US$2.1 billion,” PWC wrote.
Hin Leong was audited by Deloitte & Touche. Deloitte said in April that it stands behind the quality of its work. Hin Leong is also under investigation by the police.
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Hin Leong's case reminded Uncle8888 of late Guru's wise words!
Respect!
This was how late Guru would counter back and Uncle8888 learned something from him.
Trust; but You can't really verify!
Late Guru's counter argument.
We trust audited statements from the Big Four. Right?
But it doesn't mean auditors have verified there is no uncovered fakes or fraud! We have seen some audited and listed companies have been faking or fraud so well until one day they were uncovered and start failing.
Trust is far more important than audited statements?
Have faith and trust your Gurus!
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Arthur Andersen & Enron & Worldcom
ReplyDeleteE&Y & Wirecard & Luckin coffee
Deloitte & Hin Leong
KPMG & Carrilion UK
PWC & AIG & Northern Rock UK
What to do ... diversify & position sizing lorr.
Or pray to tua pek kong LOL.
Lol.... True... Or just keep money in cash... Maybe those with "weaker" balance sheet are more "honest" and conservative.
DeleteI was told by a accountant trained friend and someone in the management that the books need not even be cooked or falsified to give an accurate picture
Same same but different for credit rating agencies?
DeleteCW,
ReplyDeleteWell, so much for "superficial" fundamental investing...
For eg, if someone tells me he earns more than $10K per month as a salesman selling home appliances on the selling floor in a shopping mall, I would smell something is "fishy".
Of course can hit $10K and more, but not EVERY month. Once in a while during boom time Charlie sales periods believable. But EVERY month???
Just like some years back a taxi driver boasted he can earn $6-7K per month easy... Straightaway kenna exposed by other fellow taxi drivers.
Similarly, if you are working in an industry and the usual net profit margin is around 5-10%, and all of sudden this listed company says its making 30-40%...
But if you outsider in that industry, how to do fundamental analysis if you can't read BEYOND the numbers?
Of maybe do what Spur suggests instead?
He must be a 4D player with his tua pek kong....
I'm more a waterloo street Kwan Im Ma guy ;)
LOL!