Asensio Exposed!                                                     
       Warning: may contain loud, rattling skeletons


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Welcome to Asensio.CoN    Asensio.CoN Part Two  (7/06)                       

   12/28/07  Revised & Updated Asensio FAQ
  03/18/06  The Elgindy Files (new items 2/07/06; 3/19/06; 3/22/06; 07/14/06; 12/18/07)                              
 05/05/04  Appeals Court Upholds Fraud Verdict Against Asensio
   04/04/04  Asensio Charged Again
 01/11/04  Bill Wexler Update
12/24/03  How Asensio Duped Regulators                                                                            

Site Updates
He Tries to Silence Us
RIP Integral Securities
Asensio.CoN Website
Asensio.Con Part 2
"Barred" from Industry
NASD:Unfit to Regulate
Unfit to Regulate Pt 2
NASD Plot Thickens
Is NASD Corrupt?
Is NASD Corrupt Pt 2
How He Duped NASD
1989 Fraud Verdict
2002 Fraud Verdict
Hedge Fund Flack
Hedge Fund Flack Pt 2
Asensio FAQ
Asensio FAQ #2
Who Writes the Script?
Review of Sold Short
His Clients
Long/Short Strategy
Asensio Under Oath
Dissing the Courts
Who is Bill Wexler?
Who is Bill Wexler Pt 2
Bill Wexler Update
His Doctored Record
Reading Room
Contact Regulators
Reader Comments
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Doctored Track Record?

In the fall of 2000, Asensio found himself in hot water with securities regulators.    According to the NASD, his website had been using a variety of deceptive tactics to inflate his track record.   Asensio accepted a censure and fine of $75,000 to settle these and other charges.  Alas, the experience does not seem to have deterred him from spinning a few more yarns about his investing prowess.

His website recently added a chart entitled Activist Shorts.  According to his description, it shows:

publicly traded companies that Asensio & Company researched and about which it then published its research opinions [emphasis added].  The list includes the date on which Asensio issued its opinion and the stock price on that date.

The chart says that Asensio recommended PolyMedica (PLMD) for short-sale in July 2001, at a price of $39.90.   However, his list of published reports shows otherwise.  Asensio did not issue a formal opinion on the company until October, 2001, when it traded at less than $17. 

PLMD has more than doubled since then--and declared a dividend.  Obviously, these are not numbers that make Asensio look good.  Which perhaps has something to do with his failure to use them.

How to Cook Numbers

Other stocks have also posted gains after being attacked by Asensio.   But you would never know it from his chart.  Although he claims that the chart provides the "subsequent stock price after varying periods" for his picks, there is a catch.  Subsequent price has been surreptitiously redefined to exclude increases in selling price.  Which all but insures that Asensio will appear infallible. 

As used by Asensio, the "subsequent price" is actually the lowest price recorded at any time after he issued an opinion--even if many years later.   Excerpted below are the values shown in his chart for some of his best-known picks.

  Stock    Recommended   Initial Price  Subsequent
(Lowest) Price   
 Hemispherx      09/22/98        8.00       0.74     91%
 Parkervision      09/28/99      26.38       5.65     79%
 PolyMedica      07/26/01      39.90       9.50     76%
 *Biovail (per Asensio)      09/13/96      31.38      16.19     48%*
 *Biovail (corrected)      09/13/96        7.84        5.81     26%
 General Nutrition      01/19/96      20.00      13.25     34%

* Biovail has split several times since 1996.  Asensio appears to have used a pre-split value for the initial price and an inaccurate post-split value for the subsequent price.  This creates the appearance of a far larger decline than actually occurred.  Corrected values compiled by this site take all splits into account.

The Missing Ingredients

Absent from Asensio's chart is the highest price attained after he attacked, and the increase that it represents over his initial price.   Had such numbers been included, visitors to his site would see that gains posted by these five picks exceeded the declines that Asensio touts.

  Stock    Recommended  Initial Price   Subsequent
   Highest  Price
 Hemispherx      09/22/98        8.00       19.00    138%
 Parkervision      09/28/99      26.38       56.44    114%
 PolyMedica***      10/25/01      16.61       43.40    161%
 Biovail  (split-adjusted)      09/13/96        7.84       57.18    629%
 General Nutrition      01/19/96      20.00       41.25    106%

*** initial price adjusted to reflect date when first research report was actually issued

Covering up this part of the story saves Asensio from having to concede that a nimble trader could have done very well with long positions in these stocks.  And  that long positions in Biovail probably outperformed short ones.

Asensio's ruse also conceals the risk taken by those who shorted these stocks.  If unable to accommodate margin demands created by rising prices, they may have incurred considerable losses.   In fact, within months of Asensio's attack on Hemispherx, the stock surged in price, causing one Asensio client with a large short position to lose about $3 million in a single month

Thinking About Performance

For evaluating performance, the "subsequent price" approach is misleading even if highest prices are included.   The primary reason is obvious:  Asensio (or anyone) may have covered long before the most extreme price was reached.  It's the price paid to cover that really matters when calculating return on a short pick.  Asensio does not provide it.

Another problem with this approach is that it fails to consider the time factor.  How long it took to achieve a particular change in price greatly affects return.  

Asensio's targets also tend to be heavily shorted.  Borrowing such stocks often means paying a surcharge based on a percentage of current price.  (Brokers may not incur these charges, but retail investors do).  But the approach here makes no allowance for such costs.  Nor does it adjust for the long positions that Asensio and his clients often take in stocks they short.  As described on the page called long-short strategy, such positions are often sold at a loss.

Obviously, Asensio selectively presents facts (and sometimes fabrications) designed to put him in the best light.  No doubt this allows him to impress those who do not see through such tactics. 

But how much more impressive it would be if he would tell us the whole story of his short picks--and career.  Warts and all.

Page Created 5/03/03