Author Topic: BUR.L - Burford Capital  (Read 46602 times)

Normax59

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Re: BUR.L - Burford Capital
« Reply #330 on: August 12, 2019, 08:15:18 AM »
Just lol at the short apologists in this thread. Muddy Waters basically covered his entire short on the day that the report was "officially" released. As for the conspiracy claims, if you don't think that a lot of these guys are acting in concert, you're completely naive about how many of these hedge funds work.

Muddy Waters probably had his report well lawyered, but it's still a scumbag move and wholly hypocritical with how he presents himself as a truth crusader who fights for the regular joe investor against the villanous corporation. He's completely full of shit and I still marvel how a lot of these guys get so much press.

Did they manipulate every single one of their bonds too? 


frank87

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Re: BUR.L - Burford Capital
« Reply #331 on: August 12, 2019, 09:39:56 AM »
Just lol at the short apologists in this thread. Muddy Waters basically covered his entire short on the day that the report was "officially" released. As for the conspiracy claims, if you don't think that a lot of these guys are acting in concert, you're completely naive about how many of these hedge funds work.

Muddy Waters probably had his report well lawyered, but it's still a scumbag move and wholly hypocritical with how he presents himself as a truth crusader who fights for the regular joe investor against the villanous corporation. He's completely full of shit and I still marvel how a lot of these guys get so much press.

Did they manipulate every single one of their bonds too?

I don't understand your question. He made inflammatory remarks with little basis in fact, he doesn't have to be specifically involved in the buying and selling of a security to manipulate market behavior. Now you can say that it's the holders of said securities who should be at fault for panicking, which I agree with. But I don't think it's good for the integrity of markets when someone can say practically anything about a company, whether it be malicious insinuations or outright falsehoods, with very little repercussions to manipulate the market for its securities.

Schwab711

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Re: BUR.L - Burford Capital
« Reply #332 on: August 12, 2019, 09:50:50 AM »
What exactly did MW get wrong? BUR doesn't actually refute much of MW's report
« Last Edit: August 12, 2019, 09:54:23 AM by Schwab711 »

Normax59

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Re: BUR.L - Burford Capital
« Reply #333 on: August 12, 2019, 10:05:36 AM »
Just lol at the short apologists in this thread. Muddy Waters basically covered his entire short on the day that the report was "officially" released. As for the conspiracy claims, if you don't think that a lot of these guys are acting in concert, you're completely naive about how many of these hedge funds work.

Muddy Waters probably had his report well lawyered, but it's still a scumbag move and wholly hypocritical with how he presents himself as a truth crusader who fights for the regular joe investor against the villanous corporation. He's completely full of shit and I still marvel how a lot of these guys get so much press.

Did they manipulate every single one of their bonds too?

I don't understand your question. He made inflammatory remarks with little basis in fact, he doesn't have to be specifically involved in the buying and selling of a security to manipulate market behavior. Now you can say that it's the holders of said securities who should be at fault for panicking, which I agree with. But I don't think it's good for the integrity of markets when someone can say practically anything about a company, whether it be malicious insinuations or outright falsehoods, with very little repercussions to manipulate the market for its securities.

They imply in the release that it wasn't MW remarks but rather market mechanics being manipulated for the share price to fall before the report even came out.

"On 6 August, in the several hours following the 13:30 release of the Muddy Waters tweet about a forthcoming short
attack, almost £90 million of sell orders were placed and cancelled without being filled - for a stock whose average
trading volume for an entire day was less than one-fifth that amount. As discussed above, that trading conduct is
consistent with illegal market manipulation."

"Moreover, during five one-minute periods on 6 August (14:17, 14:30, 14:35, 14:43, 14:45), Burford's shares fell 6%, or over £170 million in value, some of its sharpest declines of the day. During these periods, executed sell orders totaled a mere £186,000."

"A large wave of sell order cancellations arrived in the few minutes preceding Muddy Waters' first tweet on 7 August identifying Burford Capital as the target of its short attack."

Muddy Waters did not publicly reschedule its announcement to 08:53 or otherwise provide any public indication of the actual timing of the report's release. The LSE data show that an unusual flood of sell-side cancellations began to arrive in the three minutes immediately preceding this tweet. Specifically, from 8:50am-8:53:47am, sell orders totaling over 578,000 shares were cancelled - approaching Burford's entire regular daily trading volume in less than four minutes. In fact, during those three minutes and forty-eight seconds before the tweet, there were 578,112 shares worth of cancelled sell-side orders as compared to only 36,597 shares sold in actual executed sales, a ratio of 15.8 to 1. We currently see no nonmanipulative explanation for that market phenomenon. Given that Muddy Waters made no public announcement about the actual timing of the release of the report, we do not see why a legitimate market participant without knowledge of the actual tweet's expected release time and content would be placing and cancelling a large number of sell orders in the three minutes before the release of the tweet."

They provide no data to back-up the tweet claim because if the key to making a stock fall 60% was to just tweet its name along side the words "insolvency" and "liquidity crisis" we'd all be billionaires.

I suggest you actually read what Burford said.
« Last Edit: August 12, 2019, 10:26:09 AM by Normax59 »

Gregmal

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Re: BUR.L - Burford Capital
« Reply #334 on: August 12, 2019, 10:28:11 AM »
Once again I'd say this is just another sign of their inexperience. They likely mean well, with their intentions being in the right place; to defend the company and its shareholders, but they're wasting their time.

What occurred was a sleazy, unethical, piece of shit, etc, move. Absolutely. Was it illegal? Probably not. Tough way for these guys to have their "welcome to Wall Street" moment. Just get back to work and keep making money for shareholders and if they do that, things will be fine.

Normax59

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Re: BUR.L - Burford Capital
« Reply #335 on: August 12, 2019, 10:29:53 AM »
Once again I'd say this is just another sign of their inexperience. They likely mean well, with their intentions being in the right place; to defend the company and its shareholders, but they're wasting their time.

What occurred was a sleazy, unethical, piece of shit, etc, move. Absolutely. Was it illegal? Probably not. Tough way for these guys to have their "welcome to Wall Street" moment. Just get back to work and keep making money for shareholders and if they do that, things will be fine.

They really should just move on it's just going to make people want to dig deeper.

Foreign Tuffett

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Re: BUR.L - Burford Capital
« Reply #336 on: August 12, 2019, 11:09:06 AM »
What exactly did MW get wrong? BUR doesn't actually refute much of MW's report

I think some of your recent responses are overreaching.

Writing "Seriously, it's a fraud" on 8/7 was needlessly inflammatory and misleading, and you later had to walk that statement back, albeit after waiting four days to do so ("I didn't mean to write fraud to suggest that "I know BUR commits criminal fraud" in an earlier post. I only meant fraud in the sense that BUR's management seem like con artists to me. I should have been much clearer.").
---------------------------------------------------------------------------------------------------------------------

Anyway, I think even those very critical of Burford can recognize that recognize that Burford's response directly addressed much of Muddy Waters' report. A few examples:

1) MW presented the Napo case in an oversimplified, misleading way. Here are the most relevant two sentences from Burford's response:

"Thus, Burford structured its financing agreement with Napo so that its recovery could come from not just Napo’s dispute with Salix, but from other litigation as well."

"As it transpired, a litigation matter other than the Salix matter resolved first, and resulted in an entitlement for Burford. That is the figure shown in Burford’s 2013 reporting."

2) MW fails to mention that the Gray estate's litigation against Burford was stayed and sent to arbitration in 1/2019.

3) MW referenced the wrong case # for the Neptune situation

4) MW implies that case # 154586 was acquired with Focus Intelligence Limited, but Burford says "The investment cited in the report is a post-acquisition matter; it did not exist at the time of the acquisition"

5) MW misleadingly references a typographical error made by a 3rd party (Jaguar Health) relating to the address of a Burford subsidiary as if it is indicative of some kind of conspiracy between Burford and Invesco.


frank87

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Re: BUR.L - Burford Capital
« Reply #337 on: August 12, 2019, 11:13:07 AM »
Just lol at the short apologists in this thread. Muddy Waters basically covered his entire short on the day that the report was "officially" released. As for the conspiracy claims, if you don't think that a lot of these guys are acting in concert, you're completely naive about how many of these hedge funds work.

Muddy Waters probably had his report well lawyered, but it's still a scumbag move and wholly hypocritical with how he presents himself as a truth crusader who fights for the regular joe investor against the villanous corporation. He's completely full of shit and I still marvel how a lot of these guys get so much press.

Did they manipulate every single one of their bonds too?

I don't understand your question. He made inflammatory remarks with little basis in fact, he doesn't have to be specifically involved in the buying and selling of a security to manipulate market behavior. Now you can say that it's the holders of said securities who should be at fault for panicking, which I agree with. But I don't think it's good for the integrity of markets when someone can say practically anything about a company, whether it be malicious insinuations or outright falsehoods, with very little repercussions to manipulate the market for its securities.

They imply in the release that it wasn't MW remarks but rather market mechanics being manipulated for the share price to fall before the report even came out.

"On 6 August, in the several hours following the 13:30 release of the Muddy Waters tweet about a forthcoming short
attack, almost £90 million of sell orders were placed and cancelled without being filled - for a stock whose average
trading volume for an entire day was less than one-fifth that amount. As discussed above, that trading conduct is
consistent with illegal market manipulation."

"Moreover, during five one-minute periods on 6 August (14:17, 14:30, 14:35, 14:43, 14:45), Burford's shares fell 6%, or over £170 million in value, some of its sharpest declines of the day. During these periods, executed sell orders totaled a mere £186,000."

"A large wave of sell order cancellations arrived in the few minutes preceding Muddy Waters' first tweet on 7 August identifying Burford Capital as the target of its short attack."

Muddy Waters did not publicly reschedule its announcement to 08:53 or otherwise provide any public indication of the actual timing of the report's release. The LSE data show that an unusual flood of sell-side cancellations began to arrive in the three minutes immediately preceding this tweet. Specifically, from 8:50am-8:53:47am, sell orders totaling over 578,000 shares were cancelled - approaching Burford's entire regular daily trading volume in less than four minutes. In fact, during those three minutes and forty-eight seconds before the tweet, there were 578,112 shares worth of cancelled sell-side orders as compared to only 36,597 shares sold in actual executed sales, a ratio of 15.8 to 1. We currently see no nonmanipulative explanation for that market phenomenon. Given that Muddy Waters made no public announcement about the actual timing of the release of the report, we do not see why a legitimate market participant without knowledge of the actual tweet's expected release time and content would be placing and cancelling a large number of sell orders in the three minutes before the release of the tweet."

They provide no data to back-up the tweet claim because if the key to making a stock fall 60% was to just tweet its name along side the words "insolvency" and "liquidity crisis" we'd all be billionaires.

I suggest you actually read what Burford said.

I wasn't referring to what Burford said. I was talking about how ridiculous it is that these short and distort attacks go on in plain view with little regulatory opposition to deter them. The media is always complicit as well but of course they're in the business of drawing eyeballs, and controversy and sensationalism pays a high dollar.

Schwab711

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Re: BUR.L - Burford Capital
« Reply #338 on: August 12, 2019, 12:18:53 PM »
What exactly did MW get wrong? BUR doesn't actually refute much of MW's report

I think some of your recent responses are overreaching.

Writing "Seriously, it's a fraud" on 8/7 was needlessly inflammatory and misleading, and you later had to walk that statement back, albeit after waiting four days to do so ("I didn't mean to write fraud to suggest that "I know BUR commits criminal fraud" in an earlier post. I only meant fraud in the sense that BUR's management seem like con artists to me. I should have been much clearer.").
---------------------------------------------------------------------------------------------------------------------

Anyway, I think even those very critical of Burford can recognize that recognize that Burford's response directly addressed much of Muddy Waters' report. A few examples:

1) MW presented the Napo case in an oversimplified, misleading way. Here are the most relevant two sentences from Burford's response:

"Thus, Burford structured its financing agreement with Napo so that its recovery could come from not just Napo’s dispute with Salix, but from other litigation as well."

"As it transpired, a litigation matter other than the Salix matter resolved first, and resulted in an entitlement for Burford. That is the figure shown in Burford’s 2013 reporting."

2) MW fails to mention that the Gray estate's litigation against Burford was stayed and sent to arbitration in 1/2019.

3) MW referenced the wrong case # for the Neptune situation

4) MW implies that case # 154586 was acquired with Focus Intelligence Limited, but Burford says "The investment cited in the report is a post-acquisition matter; it did not exist at the time of the acquisition"

5) MW misleadingly references a typographical error made by a 3rd party (Jaguar Health) relating to the address of a Burford subsidiary as if it is indicative of some kind of conspiracy between Burford and Invesco.

To be fair, it's unlikely anyone would have ever called me out on what I wrote and I still preemptively corrected it, despite that correction making me look bad. Burford got upset when someone pointed out their misleading reporting of their investment results. Two very different ways to handle similar things, no? I'm also not a lawyer and I don't run a publicly-traded company.

I think one of the things ignored is that before MW's report, much of what was reported was disputed by many investors. The sentiment and narrative of BUR one week ago was vastly different from today. MW was able to pierce that narrative by simply stating publicly known information with additional detail.



1. BUR does not dispute that in their Investment Data presentation (at 12/31/2018), the Napo case included non-cash recoveries that were already written down on the balance sheet.
BUR does not dispute that the Napo case was marked "concluded" before it was fully concluded. The case was included in the single case segment, thus MW's interpretation was quite reasonable without greater disclosure by BUR.
BUR does not dispute that one of their largest investors helped restructure Jaguar to avoid having to write-down the $30m of debt in Jaguar.

BUR states "The Napo investment was not introduced to Burford by Invesco, and at the time Burford had no relationship with Mr. Barnett, whose fund did not hold any
Burford equity", but this was never claimed by MW. This raises the natural question, did BUR introduce Invesco to Napo/Jaguar?

BUR stated "Finally, Burford has been transparent about this investment, commenting on it more than once in its public disclosures...", but the only public comments about this case were in 2019. Previously, BUR acknowledged Jaguar stock, but did not provide enough disclosure to link that specific case with the Jaguar stock.


2.
BUR stated "Burford has explained many times before that while most of its investments resolve for cash, some involve other kinds of consideration. While we do not routinely disclose this information, we can say at present that we have virtually no such non-cash recoveries awaiting monetisation (i.e., less than $1 million), and only around 4% of our litigation finance investment recoveries are represented by investments that have yet to pay in full."

Did you know a few months ago, that "virtually no such non-cash recoveries" stat would have been a material amount of money again?

On 6/30/2019, unpaid investment recoveries was nearly 10% of litigation finance investment recoveries.

BUR disputes the Gray example because Gray was successful, missing the purpose of MW pointing it out (that it was a contingent recovery but included in "recoveries", a potentially misleading term)


3.
Can you match any of the case numbers with specific cases? It's pretty hard to confirm BUR's reported figures. I'll give you this, MW made a mistake. It seems to be an honest mistake.

4.
Seems like a reasonable mistake, no?

5.
Where do you see that BUR says it is a typo?



Others:
BUR stated "To begin, the report goes to great length to point out a basic and consistent feature of Burford's accounting that we have ourselves described to investors and is a tenet of IFRS. That does not stop the report from suggesting that Burford "misleads" investors. The accounting feature is that when Burford recognizes a realized gain, it also reverses prior unrealized gains associated with the realized gain. This is straightforward accounting and, as the report itself admits, occurs to "avoid double-booking". A recent example of us describing this process in depth was in our 30 May 2019 RNS concerning our Teinver investment."

But BUR does not dispute that the example of 'misleading' that MW provided was a table from BUR's investor day.

BUR responded to the "ex-Petersen" analysis with "what if you exclude Google from Sequoia". Obviously, cobf has had this same conversation. The point always was, are you willing to pay 3x BV to invest in Sequoia just because they once invested in GOOG early? Probably no.

The point of MW's effort to point out the operating expenses as a % of the investment portfolio, ex-FV adjustments, is that BUR's 33% ROIC ex-outlier cases would result in roughly breakeven operating results given the average duration of cases. BUR blames MW for spinning but then also spins on the topic.

MW stated that BUR "was at high risk of financial stress". BUR stated "Burford is simply not in any financial stress". Do you see the difference? Since BUR is using the at-cost investment portfolio figure in their 'capital' calculation, there is an implied assumption of ex-Petersen. If Petersen does not work out, BUR is in fact at high risk of financial stress.

To further the point of BUR being misleading, BUR responded to the financial stress by pointing out 'they' have $400m of cash currently. But that $400m is held by the consolidated BUR Group. BUR itself has a little less than $300m in cash. BUR had just finished criticizing MW about misleading readers with BUR Group and BUR itself when they themselves confused readers about $400m in cash.

BUR concludes "Burford produces high operating margins, 84% for fiscal year 2018. It seems churlish to complain about those margins."

Those margins are predominately due to unrealized gains. That's basically the point of MW's section 7.

In aggregate, MW wasn't inaccurate, BUR just disagreed with the importance of the analysis. Where BUR claimed MW was misleading, they themselves engaged in misleading statements. Pot, kettle.


BUR criticized MW for using qualifying language but they themselves used qualifying language with regards to MW's report and the alleged market manipulation. Again, pot, kettle.

Foreign Tuffett

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Re: BUR.L - Burford Capital
« Reply #339 on: August 12, 2019, 01:12:00 PM »
What exactly did MW get wrong? BUR doesn't actually refute much of MW's report

I think some of your recent responses are overreaching.

Writing "Seriously, it's a fraud" on 8/7 was needlessly inflammatory and misleading, and you later had to walk that statement back, albeit after waiting four days to do so ("I didn't mean to write fraud to suggest that "I know BUR commits criminal fraud" in an earlier post. I only meant fraud in the sense that BUR's management seem like con artists to me. I should have been much clearer.").
---------------------------------------------------------------------------------------------------------------------

Anyway, I think even those very critical of Burford can recognize that recognize that Burford's response directly addressed much of Muddy Waters' report. A few examples:

1) MW presented the Napo case in an oversimplified, misleading way. Here are the most relevant two sentences from Burford's response:

"Thus, Burford structured its financing agreement with Napo so that its recovery could come from not just Napo’s dispute with Salix, but from other litigation as well."

"As it transpired, a litigation matter other than the Salix matter resolved first, and resulted in an entitlement for Burford. That is the figure shown in Burford’s 2013 reporting."

2) MW fails to mention that the Gray estate's litigation against Burford was stayed and sent to arbitration in 1/2019.

3) MW referenced the wrong case # for the Neptune situation

4) MW implies that case # 154586 was acquired with Focus Intelligence Limited, but Burford says "The investment cited in the report is a post-acquisition matter; it did not exist at the time of the acquisition"

5) MW misleadingly references a typographical error made by a 3rd party (Jaguar Health) relating to the address of a Burford subsidiary as if it is indicative of some kind of conspiracy between Burford and Invesco.

To be fair, it's unlikely anyone would have ever called me out on what I wrote and I still preemptively corrected it, despite that correction making me look bad. Burford got upset when someone pointed out their misleading reporting of their investment results. Two very different ways to handle similar things, no? I'm also not a lawyer and I don't run a publicly-traded company.

I think one of the things ignored is that before MW's report, much of what was reported was disputed by many investors. The sentiment and narrative of BUR one week ago was vastly different from today. MW was able to pierce that narrative by simply stating publicly known information with additional detail.



1. BUR does not dispute that in their Investment Data presentation (at 12/31/2018), the Napo case included non-cash recoveries that were already written down on the balance sheet.
BUR does not dispute that the Napo case was marked "concluded" before it was fully concluded. The case was included in the single case segment, thus MW's interpretation was quite reasonable without greater disclosure by BUR.
BUR does not dispute that one of their largest investors helped restructure Jaguar to avoid having to write-down the $30m of debt in Jaguar.

BUR states "The Napo investment was not introduced to Burford by Invesco, and at the time Burford had no relationship with Mr. Barnett, whose fund did not hold any
Burford equity", but this was never claimed by MW. This raises the natural question, did BUR introduce Invesco to Napo/Jaguar?

BUR stated "Finally, Burford has been transparent about this investment, commenting on it more than once in its public disclosures...", but the only public comments about this case were in 2019. Previously, BUR acknowledged Jaguar stock, but did not provide enough disclosure to link that specific case with the Jaguar stock.


2.
BUR stated "Burford has explained many times before that while most of its investments resolve for cash, some involve other kinds of consideration. While we do not routinely disclose this information, we can say at present that we have virtually no such non-cash recoveries awaiting monetisation (i.e., less than $1 million), and only around 4% of our litigation finance investment recoveries are represented by investments that have yet to pay in full."

Did you know a few months ago, that "virtually no such non-cash recoveries" stat would have been a material amount of money again?

On 6/30/2019, unpaid investment recoveries was nearly 10% of litigation finance investment recoveries.

BUR disputes the Gray example because Gray was successful, missing the purpose of MW pointing it out (that it was a contingent recovery but included in "recoveries", a potentially misleading term)


3.
Can you match any of the case numbers with specific cases? It's pretty hard to confirm BUR's reported figures. I'll give you this, MW made a mistake. It seems to be an honest mistake.

4.
Seems like a reasonable mistake, no?

5.
Where do you see that BUR says it is a typo?



Others:
BUR stated "To begin, the report goes to great length to point out a basic and consistent feature of Burford's accounting that we have ourselves described to investors and is a tenet of IFRS. That does not stop the report from suggesting that Burford "misleads" investors. The accounting feature is that when Burford recognizes a realized gain, it also reverses prior unrealized gains associated with the realized gain. This is straightforward accounting and, as the report itself admits, occurs to "avoid double-booking". A recent example of us describing this process in depth was in our 30 May 2019 RNS concerning our Teinver investment."

But BUR does not dispute that the example of 'misleading' that MW provided was a table from BUR's investor day.

BUR responded to the "ex-Petersen" analysis with "what if you exclude Google from Sequoia". Obviously, cobf has had this same conversation. The point always was, are you willing to pay 3x BV to invest in Sequoia just because they once invested in GOOG early? Probably no.

The point of MW's effort to point out the operating expenses as a % of the investment portfolio, ex-FV adjustments, is that BUR's 33% ROIC ex-outlier cases would result in roughly breakeven operating results given the average duration of cases. BUR blames MW for spinning but then also spins on the topic.

MW stated that BUR "was at high risk of financial stress". BUR stated "Burford is simply not in any financial stress". Do you see the difference? Since BUR is using the at-cost investment portfolio figure in their 'capital' calculation, there is an implied assumption of ex-Petersen. If Petersen does not work out, BUR is in fact at high risk of financial stress.

To further the point of BUR being misleading, BUR responded to the financial stress by pointing out 'they' have $400m of cash currently. But that $400m is held by the consolidated BUR Group. BUR itself has a little less than $300m in cash. BUR had just finished criticizing MW about misleading readers with BUR Group and BUR itself when they themselves confused readers about $400m in cash.

BUR concludes "Burford produces high operating margins, 84% for fiscal year 2018. It seems churlish to complain about those margins."

Those margins are predominately due to unrealized gains. That's basically the point of MW's section 7.

In aggregate, MW wasn't inaccurate, BUR just disagreed with the importance of the analysis. Where BUR claimed MW was misleading, they themselves engaged in misleading statements. Pot, kettle.


BUR criticized MW for using qualifying language but they themselves used qualifying language with regards to MW's report and the alleged market manipulation. Again, pot, kettle.

You wrote "What exactly did MW get wrong? BUR doesn't actually refute much of MW's report." I provided 5 example of MW getting things wrong. You reference a myriad of other issues, ignoring the question (which you yourself posed) that I was responding to.   

1) Nothing you wrote here takes away from my point that MW presented an over simplified version of the Napo case.

2) All that is only tangentially relevant to my point about the Gray litigation.

3) No comment necessary

4) No comment necessary

5) Burford's management was asked about this on the call and said it was clearly a typographical type error, which MW interpreted in the least charitable of all possible ways.

I'm not going to even attempt to address your other points as, since you neglected to provide much organizational structure in the second half of your post, it would take me too long to decipher and respond to your word potpourri.

Finally, you see to operating with the belief that I wrote something to the effect of "MW is completely wrong and Burford is a great investment." But of course I didn't say that. I actually think there are serious questions about Burford's long term prospects. It's an interesting situation.