March 14, 2008 – stlplace

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Last Updated on March 20, 2008 by stlplace

Bear Stern (NYSE:BSC) spoiled the market today. There was some confusion about Citic Securities recent agreement. As far as I know, according to Bloomberg, there was a small stock swap deal and potential JV. But lately they are under a talk to revise the deal. So nothing like the China Invest Co. Blackstone IPO fiasco.

Liquidity in my little portfolio
Interestingly, I found when market is in panic selling, big name stocks such as China Mobile (CHL), Research in Motion (RIMM) usually got down, and small name stock such as GSI Technology (GSIT) did not go down too much, sometimes it even went up. How come small stock got the power to fight against the market? Well, the answer lies in liquidity. When the big guys got panic, and decided to sell, they will usually sell the Microsoft, the Google, the Pizer,…because those stocks are traded millions of shares a day, and they could find buyer easily, without too much discount. This is not the case for GSIT, which trades about 50,000 shares a day. It takes a few buyer for my 500 shares.

Soft Commodity

My accounting homework on MON and SYT

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Last Updated on March 14, 2008 by stlplace

The following was done a while ago. Why I have not followed it in last two years, and missed this great agri boom? Because I followed all the hypes: Home Inns, Heelys and Crocs 🙁

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Dec. 14, 2005

Dear Mr. John,
Both Monsanto and Sygentia are leaders in the agriculture business. Their financial fundamentals are solid. Both are profitable and have an R&D expense of about 10% of their annual sales. Since we are long term investors, we will look at the following ratios for year 2004 at first.

PE ratio: Monsanto’s 36.4 is significantly higher than Sygentia’s 6.3, which means the investors are more optimistic about Monsanto’s earning growth. We need to examine the expected growth is organic or will be materialize.