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Comment by markdown | Hacker News Reader

Why is this shit still legal?

I mean, for basic goods, there are laws against false advertising and selling defective goods (lemon laws in the US).

But at this level, these bastards can put a fresh coat of paint on a rust bucket and sell it as a Ferrari... and get away with it? Infuriating.

On a personal level... When I was growing up, it was goldmine of electronic components, DIY kits, etc. I visited a Dick Smith a few years ago and it was terribly disappointing... computers, televisions, phones. The DIY stuff that was a makers dream was gone. I believe a parallel in the US is what happened to RadioShack.

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I worked at dickies during the last of the components era. I know that makers like to fantasize about it, but the reality is it was gotten rid of because it was a dog.

As a section it made basically no money, very few people were actually buying components, maybe one in 50 customers. Most people came to the store for batteries, chargers, step down converters, antennas etc, and I believe they were the real loss when dickies moved into the TV era.

However, despite the lack of traffic, it was the highest maintainence section of the store. It took three times the effort to maintain, because people would pull out 5 different strips of resistors and three different strips of caps, go back to their color chart and circuit diagram and figure out which two they actually needed, and then shove the six other strips into a random drawer and walk off, and it was the staff that had to go through 300 tiny drawers with a resistor chart figuring out what went where. You'll notice jaycar keeps most of that shit behind the counter.

It's a small point, but actually Jaycar only keep semis, LEDs and similar parts behind the counter. Resistors are on tape in groups of 8 with cardboard or plastic envelopes, and capacitors are free floating. I believe Jaycar selling all sorts of other rubbish helps them keep their component side going, plus besides Aztronics they're generally the only bet for people off the street to get parts these days.

I remember buying parts from DSE back up to when they moved out of this market, and managed to score a bunch of stuff cheap. It's a sad day for the company, although ironically the maker and DIY electronics scene seems stronger today than ever. Too bad they never worked out a way of capitalising on it.

Your career should be ended for working at dickies because they are known to have done bad things (even if you were not personally involved).

Well, in investing there is the concept of the sophisticated investor, where you're supposed to be capable of determining all by yourself if you're being had, provided all of the relevant information is being provided. Caveat emptor and all of that, so typical consumer protection type laws don't apply. I believe the idea behind this is to allow investors to make risky decisions, because that's kind of what professional investors are supposed to do. Still sucks when your superannuation disappears because a so-called sophisticated investor proves to be anything but.

There are laws about how you do accounting. They're not perfect. They can tweak their operations such that they can say "we made $40m in profit this year", and it's very hard to make that illegal. Investors need to go into the details rather than just assuming that whatever they did to make a profit is indefinitely sustainable.

> Investors need to go into the details rather than just assuming that whatever they did to make a profit is indefinitely sustainable.

If the institutional investors (experts in the field like Commonwealth Bank) couldn't smell a rat, mom and pop investors had no chance!

The interesting question is if this was intentional neglect, unintentional neglect or incompetence.

Mom and pop investors should not be buying single-name stocks. Leave that to the pros. (It would probably be beneficial for small investors for it to be illegal, but that would look like rigging things in favour of the big players, so it's politically impossible)

Try Jaycar instead!

Also, for those interested, RadioShack was called Tandy Electronics in Australia.

The argument is that investors who purchase shares should do their due diligence before investing.

Was anything falsely advertised? If the Australian market is like the U.S. (and I think it's fairly similar), then all the financial information used in this post would have been available to investors prior to their investment in the float.

Now, if the private equity firm falsified their financial reports for Dick Smith, that would be a serious crime. But that's not what this post is alleging.

It's possible that large investors knew this might not work, but decided it was worth a small investment anyway, just in case it did.

> If the Australian market is like the U.S. (and I think it's fairly similar), then all the financial information used in this post would have been available to investors prior to their investment in the float.

This is what the authors of the article wrote in the comments of their article:

> We were talking about this yesterday. The problem is that they only have to provide you with a balance sheet at one point in time. We knew it was fishy at the time of the float but there was no way of working all of this out until you can see a time series (and, importantly, they had to give you the old balance sheet as part of the business combinations note). The $170m of inventory in the prospectus was roughly two months sales, about the same as JBH. Looks low but you wouldn’t think only half of what is usually required.

try http://littlebirdelectronics.com.au/

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