Money mules in 2022 - DTCC Inc and Xinjiwang Limited

We've been reporting on the Brookfield investment scam for a couple of years, and while the "company" website has now been taken taken down, the scammer are still on the loose, and now requesting further wire transfer from victims under the
Dunne and Walsh in Ireland or the Washington Fiduciary Trust Services in the US.

Those are obviously only fake companies and organizations, but they are trying to scam people through real accounts, the so-called money mules, in Hong Kong and the US.

The first company is Xinjiwang Limited registered in Hong Kong at the address:

23-38 Kwai Cheong Road,
New Territories,
Hong Kong

and using HSBC bank account number: 454385733838.

The second company is DTCC Inc registered in the US at the address:

570, Washington Blvd, Jersey City, NJ 07310

and using Bank of America account number 325128858097

This will hopefully help a few people. Stay safe are financial scammers are as active as ever.

 

Trolling the investment scammers (video)

Last month, we wrote about a new financial investment scam involving Olympus International Limited in Hong Kong. This is a real company selling ceramic and stainless plate, but victim of corporate ID theft by a group of individual trying to scam investors through escrow agents (aka money mules) by discounted shares on the NASDAQ for FireEye (FEYE) before the announcement of a yet-to-be-made public contract with Facebook, and an expected return of at least 40% within three months.

You'll find out more about the scam details in the earlier post, but today, we'll share a photo montage from an audio call with one of the financial advisor, the escrow website is reveals, a Feng Shui "incantation" is performance (just because), and we ask a few questions to validate, or in this case, invalidate the company's claims, before sharing a copy of a passport that's truly a work of art....

Fraud alert: Olympus International Limited's Facebook and FireEye (FEYE) scam

Scammers never seem to take a break with the latest fraud going through "financial advisors" claiming to work for a small Hong Kong based company called Olympus International Limited. They are using the same expats database as the Brookfield Investment Funds Plc scam, and call potential investors telling them about inside information about FireEye (FEYE) having signed a large contract from Facebook, yet to be publicly announced, and expect the stock to go up at a minimum of 40% in three months.

Getting a call from an investor survey company

It all start the same way as the Brookfield scam, with a cold call from an investor survey company asking some details about you and your investor profile that takes about 5 minutes. Shortly later you'll received an email summarizing your answers from "clientform@www.dq-datamanager.com".

They ask about your job, experience in investing, budget to buy stocks, and whether you could be interested in opportunities if they present themselves.

First Olympus International Limited Calls

Then a couple of weeks later, you may received a call from an investment company in this case: Olympus international Limited based in Hong Kong.

 

The financial advisor may speak your native language or English, and they'll offer you short term investment opportunities with close to guaranteed returns. The offer we were made aware for FireEye, listed in the NASDAQ with the sticker FEYE, and claims of inside information about a contract having been signed with Facebook. They claim to be an institutional investment firm, but also work with individual when opportunities arise. They also explain they can purchase the stock as a cheaper price since they buy in large blocks, and ask you to confirm over the phone.

The call we were told about involved Ms. Olivia Martel, Senior Financial Advisor. That's likely a fake name. The website is https://olympusintltd.com/ and telephone: +852 5803 7265. 

 

Olympus International Limited is real... 

 

 Hong Kong keeps a company registry so it's easy to check if a company exists.

 

The company was registered in 2003, so it's been doing business for over 17 years. The company registration number is 0846150 and matches the number used in the emails with seen from the scammers.

 

But cracks can be found pretty quickly...

This almost looks legit, but when we look at the website WHOIS data, it was only created in August 2020, that's a long time for a company to operate without a website. 

 

They optimized their costs too by going with one of the cheapest domain registrar, and the free Let's Encrypt TLS certificate service. But at least everything is under a secure connection contrary to what's we've seen with Brookfield website...

If we look for Olympus International Limited Hong Kong on the web, we can find what types of products they offer: namely ceramic and stainless plates or other kitchen utensils.

 But who am I to judge. Time are tough, and it's possible the company decided to change the direction of the business. But if you're going to offer financial services in Hong Kong you need to register with the Hong Kong Securities and Futures Commission (SFC) which again keeps a database of registered companies.

The only registered company with "Olympus" in the name is "Olympus Partners Asia Limited". But I'm sure Ms. Olivia Martel would not have lie about her status to the face of her client.

No matched record for "Olivia Martel" or even just "<artel"? How is that possible? That's because it's a total scam, and a group of individuals likely using fake names are using the name and CR number of a real, completely unrelated company.

Let's invest in FireEye/Facebook scam!

Most sane people who figured out this was a scam, would just block the number of ignore. So are we still interested? You bet! One Ms. Martel called back, our source said due-diligence was done, and he/she was ready to go ahead with the proposal start with a small $5,000 investment. Once the number of share was agreed upon, price (around $1 cheaper than live quote at the time), and it was explained payment would have to be made through an escrow company and was due within 3 working days. A call from an "SEC compliance officer" called Mr. Michael Winters soon followed double-checking the transaction details and requiring an audio signature by simply saying the full name. 

The purchase was confirmed the following day, and the investor was given a receipt, an account opening form, and a W8 form for US taxes. 

 

 

 

The procedure is pretty similar to the one used by Brookfield Investment Funds Plc so far, but there's a twist as this time around a proof of address and copy of address is being asked first, before the payment details of the escrow company are provided. That's probably to avoid all those leaks that have happened on this website and others in the past. The escrow company (aka money mule) takes a central part in the scam so they only want to limit the distributions of the information to the minimum. Since our source did not use his/her real name, the use of a fake passport copy and proof of address, and filling a W8 form with falsified information would have been required. We did advise against it.

If you've been scammed, or managed to obtain the money mule information, please let us know in the comments section.

GMO Forecast July 2020 - Emerging Value is the Only Game in Town

 GMO published their latest 7-year forecast for July 2020, and most asset classes have dismissal expected returns over the next seven years from US large stocks to emerging stocks and large and small international stocks. Let's not even get started with bonds that are just as bad.

While we would consider gold, silver and other so-called real assets to be a potentially good long term investments at this point in time, those are not tracked by GMO, but we've noticed one exception in GMO chart: Emerging value.

9.2% yearly returns over seven would be an excellent investment in those days and age, but as we can see GMO separates emerging and emerging value, so we can't just buy any emerging stocks trackers.

But what's a value stock exactly? Here's Investopedia definition:

A value stock is a security trading at a lower price than what the company’s performance may otherwise indicate. Investors in value stocks attempt to capitalize on inefficiencies in the market, since the price of the underlying equity may not match the company’s performance.

They are often opposed to Growth stocks, often referring to stocks in the Technology and Biotechnology sectors with very high P/E ratios.

 Investopedia main takeaways:

• Common characteristics of value stocks include high dividend yield, low P/B ratio and/or a low P/E ratio.
• A value stock typically has a bargain-price as investors see the company as unfavorable in the marketplace.
• A value stock typically has an equity price lower than stock prices of companies in the same industry.

So value stocks may be dividend stocks with low price-to-book and low price-earning ratio. This includes utilities, banks, consumer staples, and some commodities producers.

So our best bet would be to find value stocks in undervalued emerging markets, which last time we looked included Russia, China, Turkey, Hungary, and South Korea. With Russia, it's easy as most stocks are value stocks, and we could just add a Russia ETF to our portfolio such as MSCI Russia Capped Index (3027.HK) in Hong Kong and VANECK VECTORS/RUSSIA ETF (RSX) in the US.

China is more complex since the stock indexes include highly priced technology company such as Tencent, Allibaba and Baidu. One such option is Value China ETF (3046.HK) whose top holdings include Chinese banks, real-estate companies and insurances.

All companies are listed in the Hong Kong stock market. Alternatively, there's also Value China A-Share ETF (3095 HK) with companies listed in China, and more of a Chinese consumers story with 35% Consumer Goods, 34% Financials.

Note that while Google Finance shows there's no dividend paid out, you'd get ~2% dividend paid out yearly.

I had more of a struggle finding a China value stock in North America, and one of the closest would be Horizons China High Dividend Yield Index ETF (HCN.TO) listed in Canada.

The funds distributed dividends every quarter. The current is 6.77% based on info from Yahoo Finance.

I will not look into Turkey due to geopolitical risks at the moment, nor the smaller Hungary market, and complete this post by checking out South Korea. If you want to invest in South Korea, there's limited choice when it comes to South Korea ETF, and most people will not be able to purchase stocks on the KOSPI exchange.

That means we'd have to accept getting some experience to technology stocks like Samsung Electronics (PE: 17.49, DY: 2.53%), Naver (PE: 64.40, DY: 0.12%),  or  SKHynix (PE:22.3, DY: 1.34%) through South Kora ETF such as iShares MSCI South Korea Index Fund (EWI). 

 

In any case, I'm uncomfortable purchasing stocks in the September-October months due to the high-valuation in the US stock market, and a stock market sell off in the US, may lead to a rise in the US dollars, and a sharp drop in emerging stock markets. If it does happen, it will certainly be an interesting buying opportunity. 

Long Term Charts - Thai Stock Market (Thai SET) Update - July 2020

It's been a long time since I've not provided an update to long term charts of the Thai stock market. More exactly over 5 years, because to be honest nothing much happened during those years, but we've got a bit more action this year, so it might be a good time to have another look.

The Thai stock market peaked at around 1,830 in February 2018, and it dropped to under 1,200 in March following the politician answers and lockdowns due to COVID-19. It's back to around 1,350 since them It was a sharp, but let's check more long term charts to find out more about valuations.

One metric is the price earning ratio, and never really went under 10 that historically is a buying opportunity. Getting to 5 or under would be a lifetime buying opportunity, but obviously it does not happen often. We should also expect earnings to drop significantly, and I'm not convinced they'll recoever that quickly so the PER should soon go higher, unless the average price of stocks in the Thai SET goes down as well.

The price to book value ratio is fairly affordable, so that's one metric where the Thai SET looks fair valued or even slightly inexpensive.

From the chart above, a dividend yield of just under 4% look attractive considering current interest rate on fixed deposits are under 1%. Buying large stocks for dividends might be a good way to be paid to wait with limited downside. That would remain true as long as dividends are not cut, and that's not guaranteed considering the environment we live in.

But no buying on my side for now, so I'll be patient, and since I expect the market to move again this year, I'll likely post an update in December.

S&P 500 Analysis: Valuation, Sentiment and Technicals - June 2020

It's been a very long time since I have done an S&P 500 analysis with valuation, sentiment and technical indicators taken into account. So let's get an updated picture for June 2020.

S&P 500 Valuation

One way to look at value is to check out the CAPE 10 ratio (Cyclically Adjusted
Price Earnings Ratio over a 10-year period). It now stands at close to 30, and that's before "COVID-19" earnings are released.

That's historically very elevated and similar to the 1929 stock market bubble. Expect the number to shoot with earning announcements if the stock market does not correct first.

Corporate earnings tend to revert to the mean over time.

It's a lagging indicator, as Q2 earnings have not been announced just yet. But the chart shows earnings were way above the historical trend before the crisis. July will be interested as earnings announcement will mean this number possibly goes negative.

AAII Sentiment

The stock market is all about people's feelings, and AAII members are not buying the rally, as they have still 48.9% bearish.

We can see the 8-week moving average bullishness chart is still very low.

The AAII sentiment survey used to be a contrarian indicator, but I'm not sure it's still the case. This would mean stocks have further gains, but in this case I suppose AAII investor believe the market will go down in the next six months, and did not really participate in the rally..

Technical Indicators

The RSI-14 (14-day relative strength index) can help us find out if a market is oversold or overbought.

The RSI-14 is now at 54 or close to neutral. This compares to close to 80 in January/February when markets were clearly overbought in the short term.

The NYA200R (percentage of stocks over their 200-day moving average) can be used to determine if only a few stocks participated in a rally.

The current chart shows only about 25% of stocks are above their 200-day moving average meaning the elevated S&P 500 stock market level may be due to some  larger capitalization, while smaller stocks are still suffering, or not participating in the rally just as much.

Conclusion

Apart from the US stock market valuation metrics to which we could add the stock market to GDP ratio, we are not really at extremes while looking at sentiment and technical indicators. So I would be very wary of going long, but at the same time the rally may not be over. Another important metrics for investors in 2020 will also be the Federal Reserve assets purchases, but it's pretty hard to forecast what a small group of people will do, especially during a presidential election year.

The Most Important Chart for Stock Market Investors in 2020

I'm so old I can remember from fundamentals and technical analysis were relevant, but this is 2020, and the most important for stock market investors may well be the chart representing the total assets of the federal reserve.

Back in September and October 2008, the federal reserve reacted promptly to the bankruptcy of Lehman Brothers, but it was not until March 2009 before the market bottomed out. Since the the balance sheet has gone up with QE 2, QE 3 and operating twist, and it's only when the Federal Reserve Bank started to tamper in 2018 that the stock market become much more volatile, and the FED had to reserve course. The response to COVID-19 sent the assets into the stratosphere, so let's see how it correlates to the S&P 500.

The FED assets purchase started the week of March 17th, soon after the stock market bottomed out on March 24th, and the S&P 500 went up as long as the FED was purchasing assets. Since then the FED has mostly stopped purchases, and as soon as they started to lower their assets, the S&P 500 followed through.

That means the stock market is highly correlated to the FED's actions, and the rally we've seen since March 23rd may be entirely due to the FED. We should then closely follow the actions of the FED and other central banks for the future direction of the stock market. However, if they overdo it, there may eventually be a currency crisis of some sort. We live in interesting times.