08.04.07
Can you trust the Stocklemon? Part 4
Well, I confirmed a bit more about Andrew Left of StockLemon (noted short seller and basher of bad microcap companies). He (or someone with the exact same name who lives in the same county, not likely) was convicted (in a civil case) of theft by double-cashing a check. I downloaded the original documents from the LA Superior Court website (case #bc269050). Since I am too lazy to put them up, you can see a copy of the writ of execution on the horrid StockLemon bashing site StockLemonAide.
Of course, when it comes down to it, you shouldn’t trust anyone, except maybe your mother (although don’t trust her for stock picks!). You shouldn’t even automatically trust me (although I am trustworthy). When it comes to investing especially, no one acts in a completely disinterested fashion. The kind of losers that praise a company such as HSOA on Yahoo’s message boards are long (or short) the stock and only want to pump (or deflate) it. Management of most every company wants to pump their company–sometimes this is just dumb, such as with CRMT or WHI, two stocks where I suffered losses after I trusted some bad management predictions–and sometimes this is fraudulent, such as in the case of Enron or Xybernaut. Short sellers (such as StockLemon) will try to bash a stock to get it to go lower.
The problem is that we cannot trust anyone. We need to verify the facts. Sometimes it will turn out that a company that looks to be failing or fraudulent will turn out to be a good company. Sometimes the short seller bashing the stock will turn out to be right (such as with Chanos and Enron or Andrew Left and GTX Global). What matters is the facts. Ironically, people like Andrew Left actually benefit the rubes that invest in fraudulent (or just bad) companies by ending the companies’ lives before they can obtain more money from investors.
See the previous posts in this series: Part 1, Part 2, Part 3
Disclosure: I am no longer long CRMT or WHI. I have no position in any other stocks mentioned. See my disclosure policy.
J Kahler said,
September 26, 2007 at 12:45 pm
I generally agree with what you have said about stocklemon. I have been following their site for over two years. I am a professional investor, CPA and former corporate CFO. My conclusions:
-Probably not altruistic in motivations. I agree with you- they would be honest if they posted their positions, but I just assume that everyone has a position on the side of their argument unless otherwise stated.
- Many of the companies profiled are dogs.
- They are not always right about a company, but they are right much more than they are wrong.
-Many of the companies profiled can not be shorted (I’ve tried) so it is not simply a dump on to short site.
-It is wise to consider what is posted on Stocklemon.
-They often target companies that are major promoters with serial press releases that are hype. These follow the same pattern of releases that include vague transactions or “strategic alliances” (hah!).
Steve Sloan said,
August 4, 2008 at 1:58 pm
I note in Part 1 that Left is mentioned in conjuntion with Manuela Assensio.
Manny is a true dirtbag. He was arrested on the grounds of a company called Polymedica (PLMD) aka Liberty Medical (Wilfred Brimley does their ads) trying ot gather dirt on the company. PLMD was later acquired by Merck fot $53/share.
Furthermore Assensio, a broker dealer once testified and a SEC hearing that he did not know the name of his only employee. Manny lost his broker dealer license.
We’re talking a couple of major league scum in Left an Assensio
michael said,
August 4, 2008 at 2:07 pm
Steve — you didn’t note that. Left is not connected to Asensio any more than I am. Furthermore, I cannot find any evidence that Asensio was actually convicted of any crime in the PLMD sleuthing incident. He was questioned by police after Polymedica complained:
http://www.usatoday.com/money/markets/us/2003-02-17-short-sell_x.htm
Asensio losing his broker-dealer license was due to the rather mundane flaw of misrepresenting (in a relatively minor way) the performance of his short picks.