Member Info for mickymix

Wondered how long it would be before the Yanks took an interest. Here we have it. Won't be long before others follow.

We are told ESG stands for; Environmental, Social & Governance.
The truth is, it stands for; Extremist, Sociopathic & Gestapo-esque

Forget the verses, it's the chorus...

https://www.youtube.com/watch?v=LODkVkpaVQA

Yep, as mentioned before and worth mentioning again, I believe...for a relatively modest investment with relatively little downside risk, especially considering all the other sites/assets, there's a yacht in this or whatever else you'd like to spend your gains on.

Since I'm not prescient, I don't know Mr008. What do you think? Why don't you tell us all. Go on, we know you're itching to.

What's the matter? Has your spread bet gone south?

That's the bunny right there ST, back then it was there but costing more to get out than it was worth. Now we have a higher gold price and modern, more efficient (and therefore cheaper relatively) extraction processes. They would not order the processing plant before the assay results were in unless they were mighty confident of extractable and profitable reserves. It would be like buying all the materials to build your house before you had got planning permission. You'd have to be a complete idiot to do it unless you KNEW it would be passed. So, does anyone seriously think the BOD would risk looking that idiotic, knowing that if the reserves aren't confirmed by assay they are going to be facing demands to know why the hell they bought a processing plant before getting positive proof of the results?

Couldn't agree more Unc Doug. Already have a substantial holding but like you say, this could do 15-25% in the blink of an eye. With more positive pr (which I feel sure is coming) it's going to be lovely seeing it back towards £4.00 and well over where it justifiably deserves to be which is why I'm so heavily invested and in my opinion will get there in the not too distant future (never mind early or mid next year), I'm looking at this side of Christmas.

Just watched webinar where mention thinking EY are in the frame as auditors. I know that's suspected anyway but further fuel towards that end.

Yep, interesting validation there both on research methods and NBrown. They've done more than just take the fact that older people are becoming more tech savvy, they know they're the ones with the most to spend and they're more loyal and less likely to switch brands as long as satisfied. This is a grower and a keeper. Like I mentioned on here a while back, there are a fair few more mature ladies where I live and I know for a fact they have been having a field day online with JDW.

Good, some sense and balls from Jupiter there. That's a big, fat busted nose for Little Miss Whiney Pants and a warning to other virtue signalling hypocrites to wind their necks in because we're not gonna capitulate to the likes of your largely unfounded hysterics, screaming abdabs and totally unreasonable demands for change. So go jump Kendall. Good on Jupiter!

Morning all, and a very good morning I wish you all too. I was contemplating Alba yesterday evening and a realisation REALLY began sinking in. I think it must have been there prior but became glaringly obvious last night. Why would anyone make a substantial investment purchasing a processing plant before the assay results are in? Surely, if you were unsure of results you would wait for the assay results first and then, if the results are positive enough to justify the expenditure, buy the processing plant. By default then, unless you are insane, you must be pretty damn certain of the yield to actually buy a processing plant before the assay results are in. Yep, even more convinced now, almost to the point of absolutism, there is gold and lots of it. Another top up has to be in order. I think a Sunseeker is truly on the cards at some point with this.

Here I tend to think this is not important but note that "tend" there. This is reputation management by those large firms. I do not think there's some large hole in the boohoo accounts. They're not a complicated enough company for there to be such holes to be honest. They're not dealing - not massively at least - in offshore havens, their cashflow inwards is terribly easy to check given that it's all online sales.

It's that connection to the local, UK, rag trade that's putting the accountants off. I expect this to get sorted by one of the second ranking - but still large enough to manage the business - auditors to take on the work.

My view
This isn't about the underlying fundamentals of boohoo which haven't changed since those two earlier pieces linked above. Rather, it's trading these newspaper stories. High flying stocks, those that are priced for continued growth and success, are prey to falls if that reporting turns negative. But such falls only last until that underlying growth shines through again. In other words, this too shall pass.

The investor view
Buy into boohoo again and ride the correction. Stories of VAT shenanigans, cash payments against fake invoices, in the supply chain, these simply don't affect boohoo in any material manner. The price drop is overdone.

Thus the danger is the reputational damage - what does the customer base think about all of this. And to be honest I don't think the people who buy £5 jeans worry overmuch about such things. After all, companies like Primark are equally popular and they're buying in stuff from Bangladeshi factories paying £80 a month to the staff - yes, I have been there, have direct experience of it all.

So, as of July 13th I recommended buying at 230.00 (that's two pounds thirty, £2.30 GBP) as I thought this would all blow over.

As it happens it did and on 29 September I said take the profits at 390.00 (£3.90 GBP).

My real point here though is that last time I looked at boohoo it was a strong buy. Now? I don't know. So, take the profit you made at least.

Now it's all happening again. Or at least that is my case for another go around at this speculation.

The current news
Currently:

boohoo

(boohoo stock price from London Stock Exchange)

As we can see there's been something or other that has damaged that share price since that 29 September call to sell. It's the big drop in the past couple of days that is the point here:

The National Crime Agency (NCA) is investigating companies that supply the fast-fashion giant Boohoo on suspicion of money laundering and VAT fraud.

That's one of the two stories at issue. And it's entirely a nothing burger. Wholly:

Leicester clothing factories with links to Boohoo and Select Fashion have been involved in a “multi-million pound” money laundering and VAT fraud scandal, an investigation has found.

Firms based in the city’s garment manufacturing district, some of which were suppliers to the fast fashion retailers, were revealed to have been involved in fraudulent activity relating to fake invoices and shell companies.

The finding is that some of the people who sometimes supplied boohoo were faking invoices, dealing in cash and stealing VAT payments. This isn't even to do with making supplies to boohoo, this is just a general finding of tax fiddles among that wider diaspora of the supply base. Again, without even the allegation that this is to do with actual supplies to boohoo.

The money laundering part is not actually an allegation of managing cash flows for drugs dealers and the like, rather than the definition of money laundering has become so wide these days that tax fiddles in cash are now money laundering.

This really is nothing to do with boohoo even as it makes certain investors nervous. We should take advantage of their fear.

The other bit
This is potentially a bit more serious.

Boohoo Group Plc shares fell the most since August after the U.K. fast-fashion retailer caught up in a labor scandal said it’s seeking a new auditor to replace PricewaterhouseCoopers.

As far as we know the major accounting firms don't want the work either.

Time To Pile Into boohoo Again
Oct. 22, 2020 11:23 AM ET | About: boohoo group plc (BHHOF), Includes: BHOOY
Tim Worstall
Tim Worstall
Tech, Banks, gold & precious metals, natural resources
Continental Telegraph
(2,097 followers)
Summary
The boohoo share price has crashed again and again, it's over press reports of problems in the supply chain plus, interestingly, some problems with auditors.

We had a similar problem earlier in the summer and riding that recovery was most profitable.

Time to do the same again. The press worries are trivial even if they've spooked other investors.

A little history
boohoo (OTC:BHHOF) (OTCPK:BHOOY) (yes, no capital) is an online fast fashion retailer that has, for whatever reason, managed to tap into the desires of the younger generation in Britain and increasingly in Europe and the United States. That's the business to concentrate upon.

However, there's more than a little upset about the very model that fast fashion works upon. Cheap clothes to be worn only a few times for that younger generation does also mean intensive pressure upon costs in the supply chain. As well as the usual whining about resources being used, why can't we all just buy less but better and so on.

I do actually know quite a lot about the people doing the whining and it's the same thing we've been seeing for centuries with such things as sumptuary laws. If the young and poor can look good in new and fashionable clothes, then what's to stop them being mistaken for nice upper middle class folks like those complaining? Sumptuary laws never did work and they're not going to now either. At least in my estimation they're not.

So, I tend to think that the social background to the business is sound.

The actual business itself, well, that's subject to all the usual caveats of course and we can look at the accounts here.

This is not, though, about those accounts. It's about a short-term drop in the share price as a result of press interest. Sure, expecting recovery does mean assuming that the base and underlying business is sound but then I think that is true.

Four months back
We had something similar four months back. Then it was the announcement that certain factories perhaps two or four levels down in the supply chain had been paying people under the national minimum wage. This is not, directly, boohoo's problem but it could be a reputational one. As I said at the time:

However as a legal responsibility the impact here is going to be trivial. A likely lad walking in off the street and working - illegally - for less than minimum wage without a work permit is not going to make the legal heavens fall in upon Boohoo. It won't even impact all that much on the subcontractor in fact. This is simply not the same as the sort of compulsion the Act is against.

Covered in vomit. I thought they'd be covered in something else!

Yeah, yeah, so what, old news.

£2.3 million in the bank
Sat on estimated £1billion in Welsh gold throughout the Dolgellau gold belt
Not to mention all the other sites
Yet, a market cap of just £28 million
So go figure as it's a no brainer imo

Because there largely are no problems Wyn, it's been blown out of all proportion. I'll wager if you were to take a microscope to any of Boo's competitors, any listed Company, you'd find the same or similar sort of thing going on and very possibly much worse, although perhaps hypocritically concealed under the cloak of "virtue". I mean, ask yourself, Asos and that anti-slavery thing when they are having their garments manufactured in countries where slavery is the name of the game. I wonder how much the workers in China, Bangladesh, Vietnam etc are getting paid per hour. It won't be £3.50, that's for sure. But hey, come on, it's over there, not over here. Oh, so that's okay then? I suppose one life isn't as valuable as another, after all. Capitalism produces as much as it can for as little as it can and sells as much as it can for as much as it can get. Always has been, always will be, until man truly WAKES UP, and I mean that in the true sense of waking up, not pontificating on probity and virtue. Of course, you can dress it up and try to ease your conscience with platitudes towards ESG etc, etc, but it's all BS. The only reason companies are jumping on the ESG bandwagon is again, essentially a marketing thing, ooo look at us, aren't we goodie goodies doing our bit and so buy from us so you can claim the same. It's all rot and patently dishonest and no one would do it unless they thought they could make a buck from it or were forced (by legislation aka more money for the govt through fines and compliance etc - yep, they're at it too, riding on the back of it), not to mention all the ESG consultancy firms etc. Just sayin'

Can always be certain of uncertainty from our friend Wyn.