View Full Version : My friend is trying to get me to put some money into Joshua Tree

12-08-2005, 02:24 AM
But I'm having a hard time finding out anything about it and the info he's giving me is a bit shady. Anyone know anything about them?

12-08-2005, 11:02 AM
Is it Joshua Tree Construction? If so, they haven't filed any reports with the SEC in three years, and the last one they filed is very scary. (http://www.10kwizard.com/filing.php?param=cnn%3Djoshua%2Btree-ind%3D-1-smonth%3D12-sday%3D08-syear%3D2004-emonth%3D12-eday%3D08-eyear%3D2005-hpage%3D1-repo%3Dtenk-cik%3D1130481-st%3D2&repo=tenk&ipage=1956289&g=&type=&trad=&prin t=&attach=on&doc=1&co_item=1)

12-08-2005, 09:25 PM
I don't think it's Joshua Tree Construction. He said they do a lot of insuring companies CEO's.

12-09-2005, 11:02 AM
Well it's not publically traded (as far as I can tell). If it's a private company, ask to talk to their lawyer so you can get audited financial statements and an offering prospectus. If they can't provide this, that's a big red flag.

Are you an accredited investor? (http://www.investopedia.com/terms/a/accreditedinvestor.asp) If you aren't, and they are trying to raise money from you, that's a red flag. They are taking more risk of being sued for misleading you if you aren't accredited, so you need to ask why they are taking that risk.

Lastly, insurance companies can be very difficult to value. Insurance is often a business where a bunch of cash comes in the door first to pay for polices. Then over time, a bunch of it goes back out to pay for claims. Whether it's a successful business depends on whether management is competent at pricing the insurance, and reserving for the future outflows. Depending on the length of the contracts, you may not know for years whether they did their job or no, and by the time you find out, it's too late, they are bankrupt. Of course, if mgmt is good, you can have a great business. It just takes a good deal of research to figure out if they are good or bad. And if you have any doubts about mgmt's honesty, run. It's too easy to hide bad mistakes for long periods in insurance.

Case in point. GE is getting out of the insurance business. Fortune just reported they are going to have to take a huge ($3.5B+) charge as they sell their re-insurance company. Essentially it appears that the last CEO (a revered guy) was hiding insurance losses to make GE look much more profitable during the end of his tenure.