Shopping Clothes and Stocks
By stlplace on May 27, 2007 in Stocks, Fun
I went to mall again during this weekend. There are many malls in St. Louis, the closest (to my home) also the most expensive one, is the Plaza Frontenac. When I first visited there years ago, I was amazed to see the price tags of stuff there, things such as Boss, Gucci, stores like Saks Fifth Ave., and Nieman Marcus. It made me think St. Louis is not a small town. The shopping experience is in deep contrast to other malls such as Galleria, which is meant for average people.
Anyway I only buy stuff at one store at Frontenac, that’s J. Crew., and I only buy when things are on sale and I found they fit me well. For instance, today I bought a broken-in zip fly chino for 14.99 (plus 1.14 sales tax), the listed price was 64.50.
I think same principle can be applied to investing in stocks. We should buy quality stocks that we can understand (just like the clothes fit us), and we should have the patience to wait sometime (e.g., Memorial Day sales), before pulling the trigger. That way we will not over pay for the trendy or hot stuff.
Inpulsive buying, especially buying the new items when they come out, usually means over pay. In some cases, we could buy the stuff that does not fit us. Unlike clothes, you can not return the stocks to the broker when you found you made a mistake 
feiyi | May 28, 2007 | Reply
I came across to your blog two weeks ago when I was looking for the information related to CHINA CITIC BANK .I found what you said is really instructive and enlightening. On top of that, I learned English from it. But I wonder since you’re an software engineer why are you so interested in finance especiall stocks and china stocks? I’m a student major in finance, and now I’m studing at RUC the third year. I love you blogs.
stlplace | May 28, 2007 | Reply
Feiyi,
Thanks for your nice comments. Yes it may seem a bit weird that a software guy will have some ideas about finance and stocks. But we all have some kinds of hobbies, my main interest is stocks these days. Also, one person’s interest (hobby) could change over the time. I used to be a big fan of cars and electronics gadgets (spending the money), but I am much more interested in “making money” nowadays.
I believe one can learn much faster if he/she is really interested in some topics.
Regarding Chinese stocks, I think it’s more interesting than the US stocks because they have more potential both in near and long term.
That’s just my view, so what’s your thoughts about China Citic Bank?
feiyi | May 29, 2007 | Reply
Regarding Citic, I think the stock price is beyond its fundemental.I don’t think it’s worth that high.Maybe I am biased,however, I insist. Buying the stock is buying the company behind. Compared to China Merchants Bank, I prefer the latter. Most of my friends have at least one credit card, but none of these cards is issued by Citic.Doesn’t he think we are the most dynamic consumers in the near future? I haven’t seen the branch of Citic in my hometown which is a fast-growing city located between Nanjing and Shanghai.(maybe you know it. 常州) what’s more, enen the technical analysis doesn’t support its price. Its PE ratio is 111times which is the highest in the listed banks. But I can’t understand why do people still buying its stock.
stlplace | May 30, 2007 | Reply
Feiyi, I agree with you on valuation analysis. I think Citic Bank and China Merchants Bank are different kinds of banks (there are some overlap): Citic bank makes money from lending money to big companies; CMB is the best retailing bank in China, it makes money from consumers, credit cards, etc. It is the No. 1 credit card issuer in China. I think I like the growth in the consumer credit card side. It’s also easier for a guy like me to measure (because I am a consumer too).
BTW, I think 2nd tier city like Chang Zhou has more growth potential compared to Shanghai.