tag:blogger.com,1999:blog-30660176.post115931125395658123..comments2021-02-16T00:42:28.629-06:00Comments on My Daily Fatwa: Fighting the good fight against insider tradingM.D. Fatwahttp://www.blogger.com/profile/00111923702768768345noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-30660176.post-1159481687460248332006-09-28T17:14:00.000-05:002006-09-28T17:14:00.000-05:00The problem with China isn't that the company keep...The problem with China isn't that the company keeps the profits for itself (which it will), but it will explain this by saying that is either has no profits or that it has reinvested all its profits into R&D (which it hasn't). And you won't be able to call them a liar on it because their financial statements seem to support their position. Of course, if these financial statements were actually audited using even a semi-competent auditing standard, the charade would fall apart.<BR/><BR/>Also, volatility in Chinese and Indian markets indicate that there is always significant trading ahead of any good or bad news being made public. Arguably, this is your efficient market in action, but it's hard to see how this has lowered the cost of capital for companies on the Shanghai Stock Exchange.M.D. Fatwahttps://www.blogger.com/profile/00111923702768768345noreply@blogger.com