报告日期：2019年6月13日全英文

Muddy Waters is short TAL Education Group.Investors might recall the dark days of 2010 and 2011，during which numerous U.S.-listed China companies went down as frauds.According to the recent documentary，the China Hustle，there were approximately 400 frauds from China listed on U.S.exchanges.Out of literally hundreds of blatant frauds，almost no company chairman did any prison time.Charlie Munger is fond of saying“Show me the incentive，and I’ll show you the outcome”.Defrauding U.S.investors from China has proven to be a“heads I win，tails you lose”proposition.So，it does not shock us when we see that TAL began fraudulently creating profits as early as FY2016.Since the beginning of FY2016，the value of Chairman Zhang’s shares have skyrocketed from $900 million to close to $7.5 billion.The prospect of becoming Bobby Axelrod rich is a powerful incentive，especially when you have no downside if caught.