MGO Migao

In the wake of the Sino Forest debacle quite a number of other companies on the TSE that have similar profiles (essentially foreign operations and owned to a great extent by Chinese investors ) have dropped like a stone in sympathy. Apparently it is still important what company you keep. Migao is one of them, here is the chart;

mgo june 2011

I do not really care about this company or any of the others. However what is interesting is that all of this was reportedly started by an unknown hedge-fund by the name of Muddy Waters. The scary part , in my view, is that one after another mutual fund managers etc.etc. confess to having owned the stock without really knowing anything about it. All manner of excuses are given but in the end it is hard to escape the conclusion that hiring a monkey with a set of darts might actually yield better results.