Watchdog Transparency Blog

In our Blog we take a critical look at public company disclosures and focus on issues surrounding transparency, reliability and accuracy. It you are looking for cheerleading, you have come to the wrong place. We rely on information from the best sources available to gain insight into companies and make predictions about what will happen in the future. Nothing in business is certain, so sometimes we will be wrong, but we will always be an independent voice telling you the truth as we see it. We offer Retail Investors our Research Reports for Free.

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Featuring a New “SEC Oversight” Flag in our Watchdog Reports

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In our last post we compared the relative risks of investing in China and many other countries, including the U.S. We used our Gray Swan Event Factor, which weighs the impact of a host of different kinds of adverse events like restatements, disclosures of material weaknesses, turmoil at the C-suite level, mergers, etc.… We also track these events and flag them in our Watchdog Research reports (which are free to retail investors, reporters, and curious souls).

We discovered that China had a better score than the U.S., which was shocking, but we also found out that the SEC and PCAOB had issued an extensive warning to investors in Chinese firms. This warning told investors that financial reporting in China is not consistent, that there is no effective oversight of firms in China, and that there is no enforcement to catch rule-breakers.

To ensure all the investors who rely on our reports receive this warning, we have added a new SEC Oversight flag to our report. Here is an example for Luckin Coffee:

SEC Oversight Flag.png

If you click on the flag for Luckin, it will bring you to this warning:

Luckin Warning Flag.png

We aren’t picking on Chinese companies; we also issue a similar warning for countries that are known tax-havens. If you looked closely at our summary table for country by county comparisons, you would have seen that countries classified as a tax-haven have an even lower Gray Swan Event Factor than China.

country comparison.ccp.taxhaven.png

Our new flag highlights an uncomfortable fact. Our assumptions about the overall health of an investment depends on accurate and reliable information, which is not always available. Investors need to be cautious about having companies in their portfolios that hail from countries that do not have rigorous standards promoting corporate transparency.

Watchdog Transparency Blog

In our Blog we take a critical look at public company disclosures and focus on issues surrounding transparency, reliability and accuracy. It you are looking for cheerleading, you have come to the wrong place. We rely on information from the best sources available to gain insight into companies and make predictions about what will happen in the future. Nothing in business is certain, so sometimes we will be wrong, but we will always be an independent voice telling you the truth as we see it. We offer Retail Investors our Research Reports for Free.

Sign up to get all of our blogs delivered directly to your inbox.

Featuring a New “SEC Oversight” Flag in our Watchdog Reports

by

In our last post we compared the relative risks of investing in China and many other countries, including the U.S. We used our Gray Swan Event Factor, which weighs the impact of a host of different kinds of adverse events like restatements, disclosures of material weaknesses, turmoil at the C-suite level, mergers, etc.… We also track these events and flag them in our Watchdog Research reports (which are free to retail investors, reporters, and curious souls).

We discovered that China had a better score than the U.S., which was shocking, but we also found out that the SEC and PCAOB had issued an extensive warning to investors in Chinese firms. This warning told investors that financial reporting in China is not consistent, that there is no effective oversight of firms in China, and that there is no enforcement to catch rule-breakers.

To ensure all the investors who rely on our reports receive this warning, we have added a new SEC Oversight flag to our report. Here is an example for Luckin Coffee:

SEC Oversight Flag.png

If you click on the flag for Luckin, it will bring you to this warning:

Luckin Warning Flag.png

We aren’t picking on Chinese companies; we also issue a similar warning for countries that are known tax-havens. If you looked closely at our summary table for country by county comparisons, you would have seen that countries classified as a tax-haven have an even lower Gray Swan Event Factor than China.

country comparison.ccp.taxhaven.png

Our new flag highlights an uncomfortable fact. Our assumptions about the overall health of an investment depends on accurate and reliable information, which is not always available. Investors need to be cautious about having companies in their portfolios that hail from countries that do not have rigorous standards promoting corporate transparency.

© 2020 Watchdog Research, Inc. All rights reserved.
Watchdog Transparency is a publication based on reports created by Watchdog Research, Inc.
Watchdog Research, Inc. is a financial research company providing due diligence information on public companies.

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