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No. of Recommendations: 7
I was a shareholder of CFSG from the very beginning, having purchased the first half of my position when the company still traded OTC and the second right after it was listed on the NASDAQ. I loved how it was knocking the cover off of the ball, to use an analogy that is appropriate for the season, with its revenue and earnings numbers. I further appreciate how this is a real company with a real market for the goods that it produces. The fact that Bill and the team physically visited China Fire and toured its facilities is very comforting.

Here's why I sold my shares (fortunately at a small gain because I got in so early). I started to get a funny feeling about the company after Tim Hanson spoke with its CEO, Brian Lin, at the Roth Conference, http://boards.fool.com/Message.asp?mid=26420216. Brian really turned me off with the way that he kept talking about the stock's price and how to manage it rather than just focusing on the performance of the company. This may be just how the Chinese think, I don't know, but it still bothered me.

The Sharesluth article was the last straw for me. Regardless of whether the site over sensationalized some of the issues surrounding the company so that its owner, Cuban, could make money by shorting the stock, it uncovered some seriously shady things that really bothered me. I tried to ignore them and say, "so what, this is just a short trying to make a quick buck, this is a legit company with real operations." Issues like the ones that the article brought up are probably very common with smaller Chinese companies. Still, my personal confidence in the China Fire's management has been destroyed. If they have already been caught in a number of small lies, have been connected with shady people in the past, and are so concerned about their stock price, what's to stop them from lying about or manipulating their results? I'm not saying that they will or ever have, I just despise being tricked or lied to. As the saying goes fool me once shame on you, fool me twice shame on me. After my 10 day TMF waiting period for talking about this incident on the first day was over, I decided to sell my stake in the company. The waiting period was actually a good thing because the stock bounced back quite a bit during that period.

Bill obviously is an incredible investor and stock picker who knows what he is talking about. China Fire will probably be an outstanding investment that brings subscribers excellent returns for years to come. However for me, with so many great companies out there to invest in that don't have issues like these, I just can't bring myself to invest in them. I would rather stick my money in this month's "Best Buy" Telkom Indonesia or some other company.

Deej
No position in CFSG
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