Tuesday, October 6, 2015

Exact Sciences (EXAS) Fails to Impress U.S. Preventative Task Force (USPTF), EXAS Shares should Slide...

mtsDNA (Stool DNA Plus FIT)

The mtsDNA test (Cologuard®), concurrently approved by the FDA for marketing and by CMS for coverage in August 2014, combines the results of a FIT and DNA marker assays. It is the most expensive of stool tests, reimbursed by CMS at $493 per test.307 In comparison, the cost of FITs is generally much lower, with a CMS reimbursement of $23 and a mean commercial reimbursement of $21 per test.308 In one large study (n=9989), mtsDNA was statistically significantly more sensitive for CRC at 92.3 percent than OC FIT-CHEK (73.8 percent) using a recommended single stool sample for each test. In other included FIT studies, OC FIT-CHEK had higher estimated sensitivity than observed in this study, when multiple samples or lower assay cutoff was used. However, comparison of test performances across studies is difficult due to differences in study design and population characteristics. In all cases, increasing sensitivity was accompanied by decreasing specificity. Specificity for the mtsDNA test (84.4 percent), for example, was lower than all FIT assays, resulting in the highest false positive rate

The high rate of unsatisfactory samples for the mtsDNA test (6.25 percent) was concerning when compared to these rates for FITs (0.3 percent). Excluded samples in this study were in part due to leakage in shipping, which the manufacturer reported has since been fixed, as well as a study quality control measure that authors indicate would not be encountered in clinical practice.166 At a programmatic level, information is lacking on patient adherence and the appropriate screening interval, as well as the impact of false positives as a result of lowered specificity.


Sunday, August 16, 2015

The Timing of Goldman Sachs's analyst Terence Flynn's Sell rating on Ophthotech (OPHT) was not Coincidental

Dear Terence Flynn and All Readers,  

On Friday, August 7, 2015, Terence Flynn PhD issued what we interpreted to be an extremely lukewarm Sell rating on Ophthotech (OPHT). Then just 6-days later news broke from Avalanche (AAVL) which weakened part of his fundamental thesis of competitive threats. Since the Sell rating OPHT has pulled back 17.9%, but now that we know more details we expect shares to rally back above $60/share sooner than later. Flynn's Sell rating was rendered somewhat obsolete in less than 1-week and now poses a greater risk to Traders who followed him and shorted the stock. Fasten your helmet as we attempt to debunk Flynn's downgrade to Sell and shine some Educational light on the fuzzy tactics some analysts use and always get away with; perhaps this time we have a high-profile tuna, hooked.

After certain facts hit the wires on Thursday, August 13, 2015, the probability of a bidding war for OPHT has increased by roughly 33% by year-end as there are no drugs either on the market or in any clinical trials, that we know of, with the stellar pharmacological profile of Fovista.

OPHT's Fovista is a drug currently in Phase III trials for the treatment of wet age-related macular degeneration (AMD). Fovista marked much better results as measured by reading acuity in Phase IIb trials than Roche's Lucentis which has been FDA approved and rings in Sales of roughly $2 billion per year.

Even after the broad pullback in biotechs of late and Flynn's very aggressive downgrade, OPHT's chart since its IPO 2-years ago is in tact -bullish- and in our opinion the current technical pullback offers Traders and aggressive Investors a very attractive Entry point, right-here right-now.

OPHT's market cap at $51.00/share = $1.77 billion, that's < 1X of yearly Sales of Lucentis for AMD. Just based on that fundamental metric we are convinced Flynn will be proven wrong literally within days as OPHT rallies back closer to $60.00/share than $50.00/share. And we will admit defeat IF shares trade down to Flynn's Price Target of $45.00 any time from this day forward. 

In Phase IIb trials Fovista showed benefits beyond improving reading acuity or simply halting the damage to blood vessels. There was some science that pointed to the drug's ability to Reverse some of the blood vessels damaged by AMD. This data was in no way definitive since Phase IIb was not designed to test or achieve that goal, yet Phase III is extremely exciting since there is no drug on the market with that unique quality and the patients who have a more aggressive form of AMD often go blind. OPHT will issue a press release updating this monumentally important data in Q4, 2015.

Flynn did mention the Buyout risk scenario but argued it was small since Fovista is in Phase III . His Sell opinion focused more on valuation (technicals) and competitive threats. But now we know that just 6-days after his report 1 of the competitive threats has been erased

Here are some insights from Jerry Helzner just before AAVL went public 13-months ago. Flynn mentioned REGN in his Sell report so we're nearly 90% sure that he knew about the partnership with AAVL that was forged more than a year ago. "Fish still on."

July 1, 2014
The new collaboration covers novel gene therapy vectors and proprietary molecules, discovered jointly by Avalanche (Menlo Park, Calif.) and Regeneron (Tarrytown, N.Y.), and developed using the Avalanche Ocular BioFactor, an adeno-associated virus (AAV)-based, proprietary, next-generation platform for the discovery and development of gene therapy vectors for ophthalmology.

The collaboration covers up to eight distinct therapeutic targets. Regeneron will have exclusive worldwide rights for each product it moves forward in clinical development. In addition, Avalanche has the option to share in development costs and profits for products directed toward two therapeutic targets selected by Avalanche.

As part of the agreement, Regeneron has a time-limited right of first negotiation for certain rights to AVA-101, Avalanche’s gene therapy product targeting vascular endothelial growth factor currently under development for the treatment of wet AMD, upon completion of the ongoing phase 2a trial. 

Credit to Jerry Helzner, Senior Contributing Editor of Ophthalmology Management magazine and online. 

Here's a look at the 27.6% selloff AAVL suffered last Friday, 1-day after the company pulled their lead AMD candidate AVA-101 stating that the drug will not proceed to the next Phase but return to their labs for further analysis after they took a closer look at the data. 


Though this blog is mainly an Educational outlet for us as well as Traders and Investors who appreciate reading market analysis that uses a combination of techniques often sprinkled with a lot of common sense and behavioral psychology in an attempt uncover the Truth. 

Flynn's Timing of issuing a Sell on OPHT we believe was not coincidental but calculated, based on public information that AAVL was going to have a live conference call regarding earnings as well as a progress update on AVA-101. Flynn was hoping that the update on AVA-101 would be bullish but it backfired bearish.

Our thesis is that Flynn was worried about a positive update regarding AVA-101 so he took a Defensive leap 6-days before AAVL's press conference by downgrading OPHT to a Sell.  

Please note that Fovista, currently in Phase III trials, showed better efficacy in reading acuity not only versus Roche's Lucentis but also REGN's Eylea in Phase IIb trials where an very large group of 499 patients suffering from AMD were studied. 

The two drugs known as Eylea and Lucentis are the standard treatment for AMD today as both have been approved by the FDA several of years ago. And since the threat from AAVL's AVA-101 is now at least delayed, a bidding war for OPHT could occur sooner than Flynn hypothesized in his report.   

Do you agree with our psychology that Goldman's Sell rating was really a Defensive call just a few days ahead of public knowledge that AAVL was set to release earnings and a progress update on AVA-101, a drug which REGN backed as part of a collaborative agreement. 

We believe that Flynn's Sell rating was motivated by the potential of positive data breaking regarding the pharmacology of AVA-101 that was set to go public on August 13, 2015, yet he made no mention of this catalyst in his report. 

We believe that our thesis carries more weight due to the enormous difference in Price Targets from Oppenheimer's Ling versus Goldman's Flynn with main focus being on when these Price Targets went public. 

Aug 7 - Flynn, Sell OPHT, Price Target $45.00
Aug 13 - AAVL's drug AVA-101 fails
Aug 14 - Ling, Outperform OPHT, Price Target $95.00

It's crystal clear that Ling's report was issued hours after news of AVA-101's failure while Flynn issued his report 6-days before the AVA-101 facts were known. 

We believe Flynn's downgrade was rooted less in valuation but the competitive threat from AVA-101 that lied ahead. We very much question the Timing of his actions and it's difficult for us to overlook that he simply didn't know or care about the AAVL press conference scheduled for August 13. 

Flynn did nothing unethical but we give him a 'D' for lack of transparency in addition to the fact he was missing in Manhattan on Friday, the day after the AVA-101 news as well as the $50.00 Higher Price Target from an Oppenheimer analyst armed with more timely facts.

Will Flynn update his Sell opinion to at least a Neutral sooner than later or will he just hope either nobody figures out his fuzzy tactics or that the broad Biotech pullback affects OPHT

With AAVL's AVA-101 back in the lab we feel certain that the previous results were staged and therefore not scientific. We believe AVA-101 has < a 10% chance to ever win an FDA approval.

Where was Goldman's Terence Flynn on Friday to address his thesis of 'competitive threats'? His 10-day old Sell thesis on specifically mentioned the potential for 'competitive threats' from Regeneron (REGN) and Roche, and to be fair there was no mention of AAVL in the write-up. 

We believe Flynn's Timing was not coincidental but calculated
  1. Flynn knew that AAVL scheduled an earnings report and AVA-101 progress update for Thursday, August 13, 2015, 
  2. Flynn's Sell rating on OPHT was disseminated on Thursday, August 6, 2015, exactly 1-week ahead of AAVL's earnings and progress update on AVA-101,
  3. In his Sell report Flynn mentioned the potential for competitive threats and REGN who we know was a backer of AAVL,
  4. If AAVL issued a positive update on AVA-101 that would have caused OPHT to suffer a technical selloff since they are partnered with REGN, a stock highlighted in Flynn's Sell thesis on OPHT

REGN's executive team saw promise in AVA-101 because they gave AAVL an undisclosed upfront payment and the potential for a whopping $640 million in milestone monies. 

REGN is an extremely respected and high-profile biotech that has been 1 of the best performers on the Nasdaq since 2011. REGN's due diligence regarding AVA-101 had to be thorough since they forged a partnership and took a financial interest in the company. Though AVA-101's failure was not a binary event for REGN we believe it boosted psychology of OPHT's executives and shareholders as now 1 'competitive threat' has been removed. 

Oppenheimer's Ling Wang sprung to action on Friday, August 14, 2015, by issuing an Outperform rating on OPHT and price target of $95.00. Though the iShares Biotech ETF (IBB) Closed down 0.64% last Friday, OPHT bucked that downdraft and Closed Up 0.41% at $51.02.  

We have no way of knowing all the facts and assumptions behind Ling's bullish thesis and $95.00 price target we know that just 15-hours prior to his report a huge setback occurred for AAVL

Which analyst's rating on OPHT do you feel is more credible?

  • Goldman Sachs's Terence Flynn who acted ahead of the AVA-101 update with a Sell rating and $45.00 target, or
  • Oppenheimer's Ling Wang who acted after the AVA-101 update with an Outperform rating and $95.00 target.

Oppenheimer's Ling Wang's opinion copied and pasted
OPHT's lead asset, Fovista, a PDGF inhibitor, is being evaluated in three pivotal phase III trials in combination with approved VEGF inhibitors in with AMD. We see the phase III programs significantly de-risked by the positive efficacy and safety data from a large-size, similarly designed, phase IIb trial. We also view a strong MOA and the anti-fibrotic activity observed in retrospective analysis of the phase IIb trial as supportive of the disease-modifying activity of Fovista, which could expand the market substantially (not in our model). Key catalysts for shares include interim data from a phase II fibrosis trial by YE15 and phase III trials readout by YE16."

We welcome anyone to email us with questions and comments: Psychologyofthecall@gmail.com

Thank You,

Monday, May 11, 2015

Yelp Take-Under the Only Possibility Today, STOP and Look Both Ways Please! May 11, 2015

After digging for credible information regarding Yelp's 'For Sale' sign we called and spoke with 3 employees at Amazon, Yahoo!, and Priceline. 

The Amazon contact said that 'Yelp's public disclosure was the exact opposite of what a Co does if they want to negotiate fairly. He said 'the stock's 25% rise will not last because of the ridiculous tactic used in announcing a potential sale'. 

Our contacts at Yahoo! and Priceline had slightly different opinions on interest in buying Yelp but the guy at Yahoo! also expressed concern with the recent stock spike which he blamed on Goldman.

The conversations we had on Friday could be a clue that Yelp's market-cap must be closer to where it was before the spike, $38.00 - $40.00. And then just 1 out of the 3 companies could become more serious in tucking what was described as a 'struggling asset with strained leadership'.

Always watching out for the Individual Trader's Best Interests,

Sunday, April 19, 2015

2 Modern-Day Goons Nudge Greece towards Collectivism and Collapse~

Luis de Guindos, Advisor for Lehman Brothers Europe and Director of the their banks in Spain and Portugal in 2006 -where he remained until the collapse and bankruptcy in 2008- is now pressuring the Greeks to go down Bailout Road with his Collectivist crony U.S. Treasury Secretary Jack Lew. Both are urging Greece to strike a deal with creditors ASAP warning that a default will 'create immediate hardship' and damage the world economy.
Capitalist Pig Bob argues that this bailout circus of keeping Greece stuck in the failed European Union will merely be a short-term fix with long-term consequences that will cause the world's 1st Democracy to eternally lose its Sovereignty. Sad. 
What do these modern-day Collectivists not understand, or perhaps they do understand and their Endgame is to eventually strip Greeks of their Flag and Country. Do you agree?
Spain's Economic Minister Luis de Guindos
 U.S. Treasury Secretary Jack Lew

Capitalist Pig Bob adamantly disagrees with both of the above anti free-market Pushers and asks every person reading this to share it with as many friends and relatives as humanly possible. 
Perhaps we only need former U.S. Treasury Secretary Paulson to join this twisted global propulsion in favor of Big Govt to forge a fast lane to extinct Darwinian Capitalism.

Sad days indeed as the most astute Risk-Taker/businessman has never been so frustrated, confused, and concerned about the current Monetary headlock Central Planners have placed us in.
Pig Bob thinks the regimes today have strayed off-course and are too extreme. There stand to be far worse fallouts post-bailouts than if we allowed organic Economic forces to right themselves.

Long live Wall Street, long live Winners and Losers, Economic  Peaks and Troughs, Booms and Busts, Fear and Greed, Capitalists over Collectivists, all necessary elements for a more organic free-market system to flourish.
What caused the U.S. to become the envy of every country over the last 100-years and what enables healthy market-cycles are less government intrusion, not more.
Though the 2008 Financial Crisis was more psychologically painful than any in the past, we realize that nearly every generation endures some Economic crisis that causes them to feel that things will never be as good as they were in the past.

Yet history has proven that thinking is wrong since today's average person has never been so productive or witnessed so many technological advancements, but especially in Biotech
The horsepower of Darwinian Capitalism must be rooted in the ability of Individuals Pursuing their Self-Interests. No government should allow its citizenry to be gypped by burdensome Agencies and Central Planners who believe Political Self-Interest is somehow more Noble than Economic Self-Interest like Guindos and Lew.

Strip the Risk-Taker's Trust of an Economic system -butt especially due to global Monetary manipulation we have today- and the chances of organic business cycles making a comeback are many times more difficult to envision.


April, 19, 2015:
Greece is in negotiations with the International Monetary Fund and European authorities to receive the final 7.2 billion euro ($7.8 billion) installment of its financial bailout. Creditors are demanding that Greece produce credible reforms before releasing the money.
The country has relied on loans from the international community since 2010. Without more bailout money, Greece could miss two debt payments due to the IMF in May and run out of cash to pay government salaries and pensions.
“It’s something that the European and global economies don’t need — to have another crisis,” Lew told reporters Friday.
Fears that Greece could default and abandon the euro currency group sent shockwaves through global markets Friday. After being down nearly 360 points, the Dow Jones industrial average recovered a bit to finish down 279.47, a drop of 1.5 per cent.
Lew said he stressed in a series of one-on-one meetings, including discussions with Greek Finance Minister Yanis Varoufakis, that it was urgent that the debt negotiations be resolved quickly.

Greek Finance Minister Yanis Varoufakis

The status of the Greek debt talks was a prime topic on the sidelines at the spring meetings of the 188-nation International Monetary Fund and its sister lending organisation, the World Bank. Those meetings were scheduled to conclude Saturday with financial officials addressing a variety of issues — from the weak global economy to a stalled effort to overhaul IMF voting procedures.
The negotiations over Greece’s debt have proved contentious. Greek officials said they planned to meet with creditors Saturday in a search for “common ground.”
Some finance officials expressed their frustration with Greece’s new left-wing government, elected in January. Luis de Guindos, Spain’s economy minister, said the Greek government had sent “contradictory” signals regarding the negotiations.
“We have wasted very precious time over the last three or four weeks,” de Guindos said in an interview with The Associated Press. “The communication of the Greek government has not been great. They have not made a lot of friends,” he said, while adding, “I expect and I hope that the communication will improve.”



Thursday, April 2, 2015

May We Continue to Recognize and Support Good Technologies...

CHICAGO, April 2, 2015 PRNewswire -- One night, several months after a motorcycle crash paralyzed him from the chest down in 2012 and ended his U.S. Army special-ops career, Roosevelt "R.J." Anderson Jr. had a dream: he could walk again.
The very next day, he saw a paralyzed friend using an exoskeleton device to walk at the Rehabilitation Institute of Chicago (RIC), where Anderson also was receiving treatment. He decided then and there that he would one day walk again, too.
Today, Anderson is the first person in Chicago to receive a ReWalk Robotics Personal exoskeleton device, which he can use at home and throughout the community.
An anonymous benefactor donated the ReWalk Personal system to Anderson through RIC, citing the hospital's reputation as the national leader in physical medicine and rehabilitation. RIC operates the largest rehabilitation enterprise in the world; it receives the most National Institutes of Health award grants; and, it has been ranked as number one in rehabilitation by U.S. News & World Report for 24 straight years.
Arun Jayaraman, research scientist at RIC, said that Anderson, from the beginning of his rehabilitation at RIC, has worked with therapists and doctors to push himself to reach his goals, including participating in the national Wounded Warrior Games and earning a medal at the international Invictus Games. Boosted by his participation in RIC's innovative physical medicine and rehabilitation research, Anderson now is eyeing a spot on the United States Paralympic team for 2016.
"RIC worked with the benefactor to select R.J., a veteran patient who demonstrates the spirit and determination needed to successfully regain ability," said Jayaraman. "When R.J. sets his mind to something, he can't be stopped. It's our job to help him achieve his dreams, employing RIC's integrated approach to patient care along with cutting-edge research and technologies, including ReWalk."
Taking the Next Step
ReWalk is a wearable robotic exoskeleton that provides powered hip and knee motion to enable individuals with Spinal Cord Injury (SCI) to stand upright and walk. The system provides user-initiated mobility through the integration of a wearable brace support, a computer-based control system and motion sensors. The system allows independent, controlled walking while mimicking the natural gait patterns of the legs. ReWalk is the only exoskeleton system cleared by the FDA for both personal use and use in a rehabilitation setting in the United States.  
"ReWalk is thrilled to be able to facilitate this donation for R.J. and to work with RIC in expanding data about everyday life using the ReWalk," said ReWalk Robotics CEO Larry Jasinski. "The grit and determination R.J. has demonstrated is inspiring, and we are proud to have him as our first ReWalker with a Personal system in Chicago."
RIC will study Anderson's ReWalk use for one year – with quarterly check-ins – to determine the long-term clinical health benefits of regularly using an exoskeleton at home. This device gives Anderson, and other patients with SCI, the ability to stand upright and walk, engage in eye-level conversations and gain increased independence and social connection.
"I've trained at RIC for nearly three years, using exoskeleton devices for a year and a half and this ReWalk device for several months," said Anderson. "Thanks to RIC and ReWalk, I'm ready to take the next step toward independence."
Additional findings from the new research could become the foundation for future, larger studies and may impact insurance reimbursement for exoskeleton devices.
About The Rehabilitation Institute of Chicago
The Rehabilitation Institute of Chicago (RIC) is the nation's leading provider of comprehensive physical medicine and rehabilitation care to patients from around the world. Founded in 1954, RIC has been designated the "No. 1 Rehabilitation Hospital in America" by U.S. News & World Report every year since 1991. RIC sets the standard of care in the post-acute market through its innovative applied research and discovery programs, particularly in the areas of neuroscience, bionic medicine, musculoskeletal medicine and technology transfer. For more information, go to www.ric.org.
About ReWalk
ReWalk Robotics (formerly Argo Medical Technologies) develops, manufactures and markets wearable robotic exoskeletons for people with lower limb disabilities, such as paraplegia. ReWalk's mission is to fundamentally change the health and life experiences of individuals with spinal cord injury.  ReWalk is proud to offer the only FDA cleared exoskeleton systems in the United States, for rehab and personal use respectively. Founded in 2001, ReWalk Robotics is a global company with headquarters in the US, Germany, and Israel. For more information on ReWalk Robotics and the ReWalk Systems, please visit http://www.rewalk.com.
SOURCE Rehabilitation Institute of Chicago

Sunday, March 22, 2015

U.S. FDA's Drug Approval Process is Long, Expensive, and often Political

  • Phase I
Patients: 20 - 100 healthy volunteers
Length of Study: On average 1 year.
Purpose: Safety and Dosage.
Percentage of Drugs that make it to Phase II: 70%

  • Phase II
Patients: Up to several hundred with the disease.
Length of Study: 1 - 2 years.
Purpose: Efficacy and Safety (monitoring side-effects).
Percentage of Drugs allowed to proceed to Phase III: 33%

  • Phase III
Patients: 300 - 3,000 volunteers with the disease.
Length of Study: 1 - 4 years.
Purpose: Efficacy and verifying any adverse reactions.
Percentage of Drugs that win FDA approval: 25% - 30%

The above 3 Phases do not include the Discovery and Pre-Clinical processes every co must complete before meeting with the FDA for a Phase I trial.

It requires a very long length of time to get 1 drug approved and the average cost from beginning to end is between $1.5B - $2.5B.

And then unethical examples of mega-cap Pharmaceutical cos stymieing more effective drugs to treat and even cure specific diseases by buying out a company and simply halting the trials or designing the studies to fail the FDA's approval vote.


Saturday, September 20, 2014

Did You Sell Research in Motion (RIMM) Short in 2010?

Selling a stock you do not own creates a 'short' position, allowing you to profit if the Price falls. Since stocks sway Up and Down, some more than others, shorting can result in some handsome gains if your Timing (Entry & Exit) are managed correctly. Yet attempting to short any stock is a Dangerous proposition as it exposes our portfolio to Unlimited Losses

POTC identified a very high-profile tech stock was in trouble back in 2010 before its fall began, it was Research in Motion (RIMM) known as BlackBerry (BBRY) today.

BBRY is trading at $10.89 and appears to have reached some point of stability. We have No Opinions on individual stocks for readers of the blog anymore, we are strictly an educational spot for interested minds to visit. 

RIMM was a perfect example of analysts "falling in love" with a heavyweight type of stock, the 5th Commandment teaches us to never behave that way. Then we witnessed their frustrations as they raised price targets after RIMM missed the quarter. The 6th Commandment states, "never accept excuses from management", except for Goldman's Ms. Simona Jankowski, most of the analysts stayed bullish on RIMM.

POTC predicts the stock begins closing below $70 shortly, and June expiration is many weeks away; hold the RIMM Puts and enjoy the technical control as share price erodes under the all important 200 day line. We are very satisfied shares broke our way, realizing the last 8 Wall Street firms either Upgraded or Initiated coverage with Buy ratings in the past several weeks:
Mar 26, '10 JP Morgan Upgraded to Overweight
Mar 25, '10 Rodman & Renshaw Initiated Mkt Perform
Mar 19, '10 Wunderlich Initiated Buy
Mar 8, '10 BMO Capital Markets Upgraded to Outperform
Feb 23, '10 Stifel Nicolaus Initiated Buy
Feb 12, '10, RBC Capital Mkts Upgraded to Outperform Top Pick
Feb 12, '10 Wedbush Morgan Initiated Outperform
Feb 1, '10 Standpoint Research Upgraded to Buy

*DJ (Dow Jones) Research In Motion Cut To Sell From Neutral By Goldman Sachs (GS)

Research In Motion Ltd. (RIMM, RIM.T) was cut to sell from neutral by Goldman's Ms. Jankowski cut her price target from $73 to $65:
"its products will increasingly lose differentiation as the focus shifts from email, where RIM leads all competitors, to applications, where RIM lags both the iPhone from Apple Inc. (AAPL) and Android, an operating system of Google Inc. (GOOG). With its North American business already in decline, the broker doesn't expect international strength to be enough of an offset."
-By Steve Goldstein, 415-439-6400;

In closing, a high short-interest in any stock must be treated with caution as our 1st paragraph explained. 

Short sellers are never perfect and have been proven wrong from time to time. Whitney Tilson's Netflix (NFLX) short and Bill Ackman's Herbalife (HLF) are 2 high-profile examples of how individual investors with limited capital could destroy their aggressive portfolios by attempting to sell short.

Thank You,


Wednesday, September 10, 2014

Carson Block should be Investigated by the SEC for Criminal Behavior..

Carson Block of Muddy Waters on 500.com (WBAI): 
  • The company has a complex tax system, apparently 70% of last year’s income was attributable to a tax benefit.
Carson's wording is misleading and designed to excite bears and scare bulls. Why doesn't he explain why he believes 500.com's 2013 and 2014 *10% tax rate is a 'complex' tax 'system'

If you ran a completely Transparent firm you would have mentioned the reason why WBAI was awarded a favorable tax rate status by certain Chinese Ministries, you'd even address the Time element. 

It's possible that Carson did enough digging and chose his words carefully enough not to be caught in a blatant lie. We're fairly certain that Carson lined his pockets with easy loot on Tuesday, we'll explain below.  

The whole truth regarding the 'complex tax system' and why 70% of last year's income was attributable to a tax benefit awarded with the designation of 'Nation Key Software Enterprise', so the co received a preferential tax rate of 10% in 2014 and retroactive to 2013. So what could be so complex about the co's tax system now?

Carson hand gesturing half-truths to the masses that continue to get juked by his manipulative and sometimes self-serving strategies. 

Net income was RMB75.4 million (US$12.2 million), compared with a net income of RMB11.7 million during the second quarter of 2013 and RMB27.5 million during the first quarter of 2014. The increase in net income was in-line with the increase in total purchase amount and was also attributable to the Company's designation as a  *'Nation Key Software Enterprise' by several government ministries which reduces the Company's applicable tax rate to 10%.

Non-GAAP net income attributable to ordinary shareholders excluding share-based compensation expenses was RMB83.2 million or U.S. $13.4 million, an increase of 156.8% sequentially.

But Carson Muddied the Waters and presented half-truths about WBAI in a closed door private investor meeting last Monday in New York. He said WBAI is a candidate to sell short. 

The issue we have is that Carson made these bearish comments very late in the day on a September Monday as organic volume at that point was nonexistent. His masses reacted instantly by taking to their dumbphones, shorting WBAI, and Tweeting their friends caused shares to collapse, suspicious?


An underhanded short-seller can do it behind closed doors and simply has to hoodwink a wealthy group of Traders to rake in a lot of cash overnight:

  • he establishes a position ahead of a wealthy investor meeting,
  • schedules the meeting 30-minutes or less before Market Close and or during a low volume summer day,  
  • throws the word fraud around often with no proof, then he reveals his new short candidate,
  • tells half-truths and uses code words to instill fear and phrases that hint at trouble, like 'complex tax system'.
  • mainly targets Chinese cos where the time difference is 12-hours and Executives are asleep,
  • schedules an investor meeting during a Chinese holiday when no Executives are around to defend their co 
On a very bearish Tuesday for stocks, September 9, 2014, and 1-day after his New York meeting where he bashed WBAI, shares actually closed up $1.00.  
We're confident that at least a single 4%+ late-day stock drop on very high volume and then next day rally of 2%+ has left enough rat droppings to vindicate our feelings about highly suspicious actions taken by Carson Block on Monday, September 8, and if correct then the following day would be that much easier to verify.
It's obviously possible for short-sellers to Game the system but it requires a multi-pronged approach and a heartless individual to carry it out. 
When we called Carson at 'Muddy Waters' it was exactly what we expected, his name wasn't even on the phone list. Carson works so hard that he needs a PR firm to answer his calls. As soon as we asked a question about Carson's accusations against WBAI some 20-something hung up the phone on us twice, pathetic that you can't even ask questions and challenge Carson's bogus research regarding 500.com.  
500.com trades under the NASDAQ ticker symbol WBAI, it is an online and mobile Internet Sportsbook and Lottery business that's never been found guilty of wrongdoing. But since it operates in China we believe it is misunderstood and it's future Sales and Earnings growth is being underestimated.
What Carson Block did on Monday, September 8, just minutes before close cannot go unnoticed and undocumented by the Securities and Exchange Commission (SEC).

We think Carson Block is an Underhanded short-seller flying under the SEC's radar. Hopefully more wise people will take note of his dirty actions on September 8, 2014, as well as his bad track record over the last several months. 

Thanks for Reading, Communicating, and Educating,

Saturday, August 30, 2014

'I knew it all along ... didn't I ?' -- Understanding Hindsight Bias

Psychology of the CallThe situation may be different each time, but we hear ourselves say it over and over again: "I knew it all along." The problem is that too often we actually didn't know it all along, we only feel as though we did. In a new article, psychological scientists explore existing research on "hindsight bias," identifying the factors that make us susceptible to the phenomenon and identifying some ways we might be able to combat it.
Source: Association for Psychological Science
The fourth-quarter comeback to win the game. The tumor that appeared on a second scan. The guy in accounting who was secretly embezzling company funds. The situation may be different each time, but we hear ourselves say it over and over again: "I knew it all along."

The problem is that too often we actually didn't know it all along, we only feel as though we did. The phenomenon, which researchers refer to as "hindsight bias," is one of the most widely studied decision traps and has been documented in various domains, including medical diagnoses, accounting and auditing decisions, athletic competition, and political strategy.

In a new article in the September 2012 issue of Perspectives on Psychological Science, a journal of the Association for Psychological Science, psychological scientists Neal Roese of the Kellogg School of Management at Northwestern University and Kathleen Vohs of the Carlson School of Management at the University of Minnesota review the existing research on hindsight bias, exploring the various factors that make us so susceptible to the phenomenon and identifying a few ways we might be able to combat it. This article is the first overview to draw insights together from across different disciplines.

Roese and Vohs propose that there are three levels of hindsight bias that stack on top of each other, from basic memory processes up to higher-level inference and belief.
  1. The first level of hindsight bias, memory distortion, involves misremembering an earlier opinion or judgment ("I said it would happen").
  2. The second level, inevitability, centers on our belief that the event was inevitable ("It had to happen").
  3. And the third level, foreseeability, involves the belief that we personally could have foreseen the event ("I knew it would happen").

The researchers argue that certain factors fuel our tendency toward hindsight bias. Research shows that we selectively recall information that confirms what we know to be true and we try to create a narrative that makes sense out of the information we have. When this narrative is easy to generate, we interpret that to mean that the outcome must have been foreseeable. Furthermore, research suggests that we have a need for closure that motivates us to see the world as orderly and predictable and to do whatever we can to promote a positive view of ourselves.

Ultimately, hindsight bias matters because it gets in the way of learning from our experiences.

"If you feel like you knew it all along, it means you won't stop to examine why something really happened," observes Roese. "It's often hard to convince seasoned decision makers that they might fall prey to hindsight bias."

Hindsight bias can also make us overconfident in how certain we are about our own judgments. Research has shown, for example, that overconfident entrepreneurs are more likely to take on risky, ill-informed ventures that fail to produce a significant return on investment.

While our inclination to believe that we "knew it all along" is often harmless, it can have important consequences for the legal system, especially in cases of negligence, product liability, and medical malpractice. Studies have shown, for example, that hindsight bias routinely afflicts judgments about a defendant's past conduct.
And technology may make matters worse.

"Paradoxically, the technology that provides us with simplified ways of understanding complex patterns -- from financial modeling of mortgage foreclosures to tracking the flow of communications among terrorist networks -- may actually increase hindsight bias," says Roese.

So what, if anything, can we do about it?

Roese and Vohs suggest that considering the opposite may be an effective way to get around our cognitive fault, at least in some cases. When we are encouraged to consider and explain how outcomes that didn't happen could have happened, we counteract our usual inclination to throw out information that doesn't fit with our narrative. As a result, we may be able to reach a more nuanced perspective of the causal chain of events.

The above story is based on materials provided by Association for Psychological Science.
Note: Materials may be edited for content and length.

Thursday, July 17, 2014

Paradox of Bullet-Proof Banks in the Eurozone is Anti Free-Market since many Individual Risk-Takers will be Denied Credit while Large Cos will be Favored and continue to get Larger

Capitalist Pig Bob: When will the Germans say 'enough is enough' and rebel against the ECB? 

FRANKFURT—Banks in the euro zone will have little advance notice concerning the results of the European Central Bank's review of their balance sheets before the results are publicly communicated in late October, the ECB said on Thursday.

"Banks will be informed of the full and final results only shortly before they are communicated to the markets," the ECB said, although the ECB and national regulators will discuss partial findings with banks ahead of time.
The asset review, and separate stress test on how balance sheets of 128 banks in the euro zone respond to different economic scenarios, are central planks of the ECB's preparations to become the single supervisor of the region's banks in November.
ECB officials hope the reviews will provide more clarity on the state of European banks and address shortfalls where they occur. If the results are deemed credible by financial markets, then banks may be more willing to extend new credit to households and businesses.
"As we finalize this tough and rigorous exercise, we are doing our utmost to prepare for a smooth disclosure process," said Daniele Nouy, chair of the supervisory board, said in a statement.
Previous stress tests by European regulators failed to restore confidence in the banking sector. The ECB has added a new wrinkle to beef up its review: the results of the balance sheet review will be incorporated into stress tests.
"When assessing banks' own data and the outcomes of their internal models, the ECB-led teams will challenge them with calculations of their own," the ECB said.
"This is to ensure the credibility of the comprehensive assessment and will apply to both the (asset quality review) and the stress test," it said.
Once results of the tests are known, banks must submit their capital plans to the ECB bank supervisory body in November.
Write to Brian Blackstone at brian.blackstone@wsj.com and Todd Buell at todd.buell@wsj.com