July 25, 2007 – stlplace

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Last Updated on July 26, 2007 by stlplace

Today Bill Miller must be very happy, as his fund (Legg Mason Value Trust) core holdings Amazon (5% of $20 b, roughly $1 b) went up more than 20%, this is the second time AMZN came out with a blockbuster quarter this year, and the stock has been up more than 100% in the past 6 months. I think his AMZN made more than $1 b for his clients in a year or so. Last year, largely due to the underperformance of AMZN, Bill Miller’s fund did not beat the market. Many people laughed at him, but he believed in himself.

Would like to talk a little more about AMZN. I believe most people know they are the largest online retailer, they sell things from books to mobile phones.

But in recent years they have used their experience in building online store, and information technology to expand in related areas. They build stores for other retailers, as we can see the “other” options when look for things, in some cases Amazon’s price may not be lowest. This is OK because they still collect money from their partners when customers buy from the partners. Arguably their profit margin on the “3rd party store” is higher than their own store.

They have this “Amazon Marketplace”, which is similar to eBay, and is gaining popularity lately. Their developer program and other web services also bring values to small retailers. Just like I talked about “what exactly is Google, Apple or MasterCard”, we are still trying to figure out what exactly is Amazon.

But when we all figure out what it IS (and its potentials), maybe it’s time to sell the stocks. I’m glad I don’t need to worry about that, it’s bill’s problem 🙂

Ineresting article about Mindray

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Last Updated on July 30, 2007 by stlplace

I found this one from China Business Feature. Some of the interesting paragraphs:

How they started the R&D of medical devices?
“But unlike other distributors, Xu Hang, who holds a degree in medical engineering, started independent innovation of some products in 1992. Mindray’s first products included China’s first single-parameter blood oxygen saturation monitor. “At the time, as China’s hospitals had never used Chinese-made devices, they preferred the imported multi-parameter monitors. So our products did not sell well,” says Xu. Customers didn’t try Mindray’s equipment until 1995 because of problems in technology, quality and sales service. In the early stages of its development, Mindary was basically an opportunist. It hadn’t gone deep in researching the industry. It would generally sell anything that appealed to the market. It even sold products that had nothing to do with medicine.”

Market acceptance:
“Despite its success, Mindray still faces “discrimination” on international markets. In the Middle East, for example, American products are always chosen in the first place, and then those from Japan and Korea. Chinese products are given a very low priority. But the situation has been slowly changing since Mindray was listed. “Agents that we couldn’t contract with before are now coming to us,” claims Xu. The listing made Mindray more popular and trustworthy in overseas markets. Xu hopes to build on that trust with an international brand image for Mindray – that’s why he chose the NYSE instead of the NASDAQ.”