Values and value

Integrity is a virtue that is often celebrated in religious dogma. The basis of trust and integrity is the foundation block for human civilization as well as the financial markets. However, boring messages based on integrity can hardly sell in a competitive market, and people often have to dress up their products and ideas in flowery language as well as marketing hype to drive revenue and sales. 

Greed can act as a powerful motivation tool to drive people to put in extra hours, innovate on new products and ideas, and inspire people to think out of the box to achieve excess returns. However, poorly designed incentive schemes can influence the best to commit the worst misdeeds, to justify their actions for short term immediate needs, and crowd out those with moral fiber, to be replaced with the morally ambiguous whom are more eager to [change with the times]. 

Active stock picking based on fundamental analysis is a immensely difficult task. Basing your analysis on accounting knowledge and reporting standards is difficult, considering the ample room to maneuver for the respective CFOs and accountants, and sometimes a reported competitive advantage of a company could be simply dressed up by accounting fraud. Scuttlebutt analysis act as a control to discern whether the impressive results in the company books are facts rather than fiction.

Although I will not engage in short-selling due to the risk and costs involved, short sellers act as a monetary incentivized watchdog, as auditors, bookmakers, directors as well as managers have immense conflicts of interests to honestly represent what is true and fair for the financial state and performance of the company. Two of my stocks in my watch-list is flagged out in short seller report and one man salesmanship is another investment certainty.

Best World
https://www.theedgesingapore.com/best-world-hit-damning-report-short-seller-bonitas-research-shares-down-9

https://www.bonitasresearch.com/company/best_world/?fbclid=IwAR20JP4J8_K61lTdyvVOwdEeCM92bfMKWeO9wbndpxETmtq9rjppzHROYtA

Hengan international
https://www.bonitasresearch.com/company/hengan-hkex-1044/

One of the reasons I do stock research analysis independently is that most people are too anchored by the most recent and loudest headlines, rather than reports that details on facts and numbers that relate to business reality. Peter Lynch diary approach and Keith from Investment Moats influenced me to properly document my investment process and thesis so that i will know what to do when the market goes up or down and not get too tilted by fickle market sentiment. 

To conclude this wall of text. I will not know where the market is going tomorrow thereafter, but I must know where I stand. There might be a margin of safety created from the short seller reports on the companies. If I can discern I have a competitive edge in evaluating the businesses in distress, i may consider positions into the stock. If not, staying in the sidelines wont hurt as I build up my cash position.