100 Baggers: Stocks That Return 100-to-1 and How To Find Them
Reading this book. Lots of valuable info on investing. A quote from the book on auditors and auditing:
... audits are not “clean bills of health” and do not detect fraud. In fact, in the Sino-Forest case, Ernst & Young (the auditor) was Sino-Forest’s best friend. ... E&Y wrote: “The majority of the accounts receivable arising from sales of standing timber are realized through instructing the debtors to settle the amounts payable on standing timber and other liabilities denominated in Renminbi.” Can you make heads or tails of that? ... it means the company never collected the cash. Put another way, “95%+ of the company’s reported gross profit in 16 years of being public never went into the company’s bank accounts!!!” Messy, indecipherable disclosures are clues to stay away.
