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How a 25-Year-Old Investor Spurred Lumber Liquidators’ Plunge

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Re: How a 25-Year-Old Investor Spurred Lumber Liquidators’ Plunge

#21

Post by joezydeco »

fnordfnordfnord wrote: post #14
jordan0day wrote: post #5

Earlier quoted context omitted.

On the one hand, I'd love to believe that people were rational and would actually examine the data before rushing to follow some advice they got on a site like seeking alpha, so that bad actors wouldn't be able to profit by spreading false accusations. Not having to rely on a drawn-out (and sometimes unreliable) legal process would be great. On the other hand, we have plenty of evidence that people are really bad at…

The trend in measles cases is troubling, but to call it a "roaring" comeback is hyperbole. http://www.vox.com/2015/1/29/7929791/measles-outbreak-2014 tl;dr Measles was imported to a group of unvaccinated Amish by a resident returning from a missionary trip. The Amish accounted for a large portion of those infected in the US. The good news is that many Amish opted to take the vaccine after seeing the effect of measles…

I prefer this graph:

http://www.washingtonpost.com/wp-apps/imrs.php?src=http://im...

Re: How a 25-Year-Old Investor Spurred Lumber Liquidators’ Plunge

#22

Post by Qworg »

sk5t wrote: post #19
Qworg wrote: post #11

Earlier quoted context omitted.

This exists - many manufacturing companies get hit up by chemical engineers who discover something in their product, backed by a lawyer. They get damages + fees and the product gets a "This is known to cause cancer in the State of California".

Are you sure you mean chemical engineer and not chemist? Chemical engineers are usually more concerned with, e.g., how to produce something to a certain level of purity, designing a process or plant to work effectively, etc.

When a company I was working for received these, they were generally from chemical engineers (by title), but chemists showed up sometimes too.

I think the engineering part comes in from the testing for a battery of things.

Re: How a 25-Year-Old Investor Spurred Lumber Liquidators’ Plunge

#23

Post by Someone1234 »

mindslight wrote: post #18
Qworg wrote: post #11

Earlier quoted context omitted.

This exists - many manufacturing companies get hit up by chemical engineers who discover something in their product, backed by a lawyer. They get damages + fees and the product gets a "This is known to cause cancer in the State of California".

To be fair, everything gets "This is known to cause cancer in the State of California". The only thing that label tells you is that the state of California likes to pointlessly sacrifice lab animals.

Everyone loves to give California a hard time, but they've done more to bring US product safety into the 21st century than any other US state. I'd describe California and the EU as being similar, and the rest of the US to be worse than either (some by far).

Fortunately since international companies want to sell all over the US and Europe, it has meant that this is the new baseline most of them shoot for. "Legal in California" means legal in the US (and likely EU).

It is better for everyone. It really is.

Re: How a 25-Year-Old Investor Spurred Lumber Liquidators’ Plunge

#24

Post by basseq »

parfe wrote: post #2

The idea of private citizens both being able to investigate companies for wrong doing and earn income for their work appeals to me. No lawsuit, no legal process. After doing some investigations, just some quick transactions on a trading account, and a blog post later.

I'm going back and forth on this kind of activity and profit driver. Two points of view (ignoring spam artists and other bad actors):

1. It's bad because it's not objective. Reporting organizations tout themselves as objective. Very often in financial reporting, you see a disclaimer: "Author does not have an interest in Company." Having a financial stake in the news biases the author towards findings that support his position, rather than seeking the truth.

2. It's good because it encourages accuracy. In the era of clickbait headlines and mantras of "publish first, verify later", the idea that the author could have something riding on the accuracy of his investigation is appealing. It rewards writers in more than reputation.

Re: How a 25-Year-Old Investor Spurred Lumber Liquidators’ Plunge

#25

Post by pavel_lishin »

koenigdavidmj wrote: post #20
parfe wrote: post #2

The idea of private citizens both being able to investigate companies for wrong doing and earn income for their work appeals to me. No lawsuit, no legal process. After doing some investigations, just some quick transactions on a trading account, and a blog post later.

There was a case study of short selling on NPR's Planet Money a few weeks ago: http://www.npr.org/2015/01/30/382587945/winning-at-short-sel... Basically, the guy discovered a Chinese test prep company (think College Board) that had recently started to be listed on American stock exchanges, and discovered that their payment system returned an error. He emailed their support address, and it bounced. He hired a guy on C…

Odd, it doesn't appear to be on their podcast :/

Re: How a 25-Year-Old Investor Spurred Lumber Liquidators’ Plunge

#26

Post by DavidAdams »

pavel_lishin wrote: post #25
koenigdavidmj wrote: post #20

Earlier quoted context omitted.

There was a case study of short selling on NPR's Planet Money a few weeks ago: http://www.npr.org/2015/01/30/382587945/winning-at-short-sel... Basically, the guy discovered a Chinese test prep company (think College Board) that had recently started to be listed on American stock exchanges, and discovered that their payment system returned an error. He emailed their support address, and it bounced. He hired a guy on C…

Odd, it doesn't appear to be on their podcast :/

I heard the story on the podcast, so I'd think it's still available.

Re: How a 25-Year-Old Investor Spurred Lumber Liquidators’ Plunge

#27

Post by mindslight »

Someone1234 wrote: post #23
mindslight wrote: post #18

Earlier quoted context omitted.

To be fair, everything gets "This is known to cause cancer in the State of California". The only thing that label tells you is that the state of California likes to pointlessly sacrifice lab animals.

Everyone loves to give California a hard time, but they've done more to bring US product safety into the 21st century than any other US state. I'd describe California and the EU as being similar, and the rest of the US to be worse than either (some by far). Fortunately since international companies want to sell all over the US and Europe, it has meant that this is the new baseline most of them shoot for. "Legal in Ca…

So, because they've done good they are immune from criticism?

Off the top of my head, I've witnessed this label at parking garages and Starbucks drink counters. For public locations, if the label's concern were legitimate wouldn't it be appropriate to fix the situation instead of just fostering an environment of ignored signage and faux consent?

Re: How a 25-Year-Old Investor Spurred Lumber Liquidators’ Plunge

#28

Post by burger_moon »

mc32 wrote: post #3
parfe wrote: post #2

The idea of private citizens both being able to investigate companies for wrong doing and earn income for their work appeals to me. No lawsuit, no legal process. After doing some investigations, just some quick transactions on a trading account, and a blog post later.

Yeah this is pretty great. Good work and good result. My only caveat would be unscrupulous people spreading unfounded rumors or uninformed opinions passing as fact which could result in innocent companies suffering from lack or rigor on the did of citizen investigators. At least it appears sixty minutes did son of their own investigation --althouh I imagine they went in with guilt in mind, which worked out in this ca…

Without fact finding you end up with results like this http://en.wikipedia.org/wiki/Jonathan_Lebed

Kid used message boards to pump and dump stocks until the SEC intervened.

Re: How a 25-Year-Old Investor Spurred Lumber Liquidators’ Plunge

#29

Post by drzaiusapelord »

Someone1234 wrote: post #23
mindslight wrote: post #18

Earlier quoted context omitted.

To be fair, everything gets "This is known to cause cancer in the State of California". The only thing that label tells you is that the state of California likes to pointlessly sacrifice lab animals.

Everyone loves to give California a hard time, but they've done more to bring US product safety into the 21st century than any other US state. I'd describe California and the EU as being similar, and the rest of the US to be worse than either (some by far). Fortunately since international companies want to sell all over the US and Europe, it has meant that this is the new baseline most of them shoot for. "Legal in Ca…

The cancer argument California politicians follow is based on non-scientific or non-conclusive research. The legislation that dictates this is Proposition 65 and its considered a public policy failure. Its the anti-vax and holistic crowds dictating policy.

It also has the secondary effect of making REAL cancer warnings seem trivial. "Oh cigarettes are bad? So are electric cords and pepsi according to California!"

Re: How a 25-Year-Old Investor Spurred Lumber Liquidators’ Plunge

#30

Post by downandout »

parfe wrote: post #2

The idea of private citizens both being able to investigate companies for wrong doing and earn income for their work appeals to me. No lawsuit, no legal process. After doing some investigations, just some quick transactions on a trading account, and a blog post later.

In a perfect world, this would be as positive as you make it sound. However, short sellers as a group are a particularly vicious breed of cutthroat trader looking to inflict as much damage to their chosen stocks as possible as quickly as possible. Many of their targets aren't nearly as deserving of these attacks as Lumber Liquidators was here.
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