Month: November 2007

Categories
Stocks

GAAP is no longer mandatory

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Last Updated on November 19, 2007 by stlplace

for foreign companies listed in the US. But it IS still mandatory for US companies. Here are the news from MSNBC. Here is the Chinese version (from Caijing).

GAAP is the US General Accepted Accounting Principle, vs. the international standard (US always like to have its own standard, isn’t it). I think this could reduce the accounting expenses for many Chinese companies listed in the US. Not sure for Chinese companies, is this significant or not? So this is not good news for US educated accountants?

Just kidding. On more serious level, I think the most important thing of accounting, is to show the true status of the business of a company. Warren Buffett used an extreme example one time (in his annual report) to show exotic accounting can be used to show artificial good numbers.

As a side note, I noticed Longtop LFT has to expense 24 million USD for the shared transfered from its chairman to employees. I still think “transfer of shares” alone did not consititue an expense, but awarding of stock options does.

Categories
China Stocks

Premier Wen Talks about housing, stocks

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Last Updated on November 19, 2007 by stlplace

in Singapore, two of the most heated topics in China these days. Here is the Chinese excerpt from DFdaily.

Housing:
他在新加坡国立大学发表演讲后回答提问时说，应该说，中国改革开放30年来居民住房的条件有很大的改善，现在城乡居民住房面积人均超过20平方米，但是分布不均，特别是近些年来房价上涨较快，人民有很大的意见。

　　解决房地产问题，温家宝谈了四点考虑。他说，首先，政府的职责最重要的是要搞好廉租房，让那些买不起房或者进城打工的农民工能够租得起房、住得上房。为此，中国政府今年将安排49亿元用于廉租房建设，再加上地方财政，投入将达到几百亿。他说，明年我们将加大廉租房建设的力度。

　　其次，是建设经济适用房。他说，经济适用房大多数是面向中产阶级的，他们中有许多工资也不是很高。在中国，经济适用房户均面积90平方米是比较适当的，因为中国人多地少，“对廉租房和经济适用房，政府应提供和保障土地的需要，当然(这些)土地也要节约和集约使用”。他说，对于高档住房，主要靠市场调节，“但是也必须有国家的宏观调控，防止利用房地产进行炒作造成市场混乱”。

　　温家宝指出，要让全国人民懂得中国的国情，中国是有13亿人口的国家，要守住18亿亩耕地的“红线”才能养活中国人。中国每年新生人口要超过1000万，每年由农村进入城市需要解决住房的进城人员达到1800万，还有2100万流动农民工，也需要居住条件。所有这些问题，政府都要统筹兼顾。

　　温家宝说，这次来新加坡会有机会再看看新加坡的组屋。他说：“几年前，我曾经专门考察过，受到不少启发。”

premier wen jia bao pic

Stocks:
新华网新加坡11月19日电(记者张永兴李涛)中国国务院总理温家宝19日在这里从三方面谈了政府在股票市场应该做的事情。

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Categories
Stocks

Waiting for Longtop Financial earning

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Last Updated on November 19, 2007 by stlplace

longtop finance logo

(Update 2) Just listened to its CC, CEO Mr. Lian said fiscal 2009 (Apr 1 2008 to March 31 2009) revenue forecast is 80 m. Note they said fiscal 2008 revenue would be 58 m. I felt they are being conservative on the numbers here. The CEO was very bullish on the IT spending of Chinese banks, insurance companies and financial subsidiary of large companies. FENet will contribute 10 m revenue in fiscal 2009. Not too bad.

Just a little book keeping: CFO Derek said the fiscal 2008 earning will be 68 cents; outstanding shares will be 53 m by March 31 2008.

(Update) Just as I was writing, it reported its quarter. The number of this quarter looked OK. But the outlook for next quarter and the year were so so (45.7% YoY revenue growth).

I would be very interested to hear what CEO Mr. Lian has to say.

(Original) LFT is going to report momentarily. I still have all the shares bought since its late Oct. IPO (yes, under water now), and here are my impressions from reading its prospectus last night.

1) The revenue growth will be OK. They forecast a low 40s growth YoY.

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Categories
Fun Stocks

Chipotle Mexican Grill: 2nd visit

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Last Updated on April 20, 2023 by stlplace

We went to the Chipotle yesterday. This is my second visit (see my first visit exp here), and my wife’s first. It did not turn out to be a disaster, but it is obvious that my wife did not like Mexican food 🙁

On the other hand, the stock of Chipotle (NYSE: CMG) continued to do well in past 6 months, although they should have same “rising wheat and meat cost” issues as experienced by Panera, or (to a lesser extent), Starbucks. I think the main reason is, the consumers (black, white, Asian and hispanic) crave for the spicy Mexican food. Not the sandwich or latte from Panera or Starbucks.

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Categories
Stocks

Old horses in China Online Game

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Last Updated on November 20, 2007 by stlplace

(Update Nov 20) Grus had a good post on trader818 explaining the online games and its competitive nature. So I can shut up.

(Original) I have traded the three old horsemen among Chinese online game companies 2 years ago(unfortunately, lost money on all three): Shanda (SNDA), NetEase (NTES) and the9 (NCTY). I paid attention to them from time to time, and I think recent developments in those 3 companies are interesting, especially from business point of view.

First, the good news from Shanda. Two years ago SNDA stock is in a downward trend, because its main revenue source: lineage II was getting old. Since then SNDA did a few things: it sold Sina stock and took a big gain; it changed its business model from making money from subscription to making money from selling stuffs used in game; it also acted more like a VC, I mean it bought some popular game in its early stage, then leverage its distribution network to make money.

NetEase, the old game (westward series) are really getting old, the new in-house games are not taking the slack from westward. Other effects such as web search is too little too late. In my mind, Mr. Ding Lei was very lucky in the past, in terms get into the right field in the right time (email service, mobile value added service, and online game). Will he be lucky all the time?

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Categories
China Stocks

China to tax stock real estate gains?

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Last Updated on November 17, 2007 by stlplace

There are conflicting news about this hot topic. The initial news, according to Hexun, the Chinese tax bureau is going to collect tax on the gains made from stocks and real estate for people earn more than 120,000 Yuan per year. Note in China 120,000 Yuan is the threshold for people to file personal income tax.

personal income tax(source: xazr.com)

But according to Xinhua and Netease, the Chinese tax bureau is not ready to collect capital gain tax from stock sales yet.

My take: the personal income tax and especially the filing of personal income tax (for person earn over 120,000) are still fairly new. The Chinese stock market is also fairly new (compared to western markets). It IS good for China to align the tax system, encourage investing (in stocks) while keep the fairness of society (people from different income level). But keep this balance and how to accurately calculating taxes will NOT be easy for the goverment, and brokage firms.

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Categories
Fun Stocks

Do not touch the stocks

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Last Updated on November 17, 2007 by stlplace

I usually have a weekly call with my parents. My mom knows I investing in stocks. On today’s call she suggested I touch less on stocks. I think this sums up the sentiment of Chinese stock market very well. After recent drop of the A share market, people are weary of what the goverment will do (further) to cool down the market.

do not touch sign (source: online-sign.com)

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Categories
China Stocks

Starbucks, Panera

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Last Updated on November 15, 2007 by stlplace

Yesterday morning when I went to Panera (St. Louis) Bread to get morning bagel, I noticed they raised the price from 89 cents to 95 cents. I can fully understand the pressure they are facing: the rising wheat, diary, and energy cost.

Today Starbucks came out with earning, and understandablely a disappointing outlook (bloomberg).

SBUX and PNRA are hit on two sides: the rising costs of raw materials; and shrinking pockets of US consumers.

Long term, I do believe Starbucks will do very well in China, and other emerging markets; but right now, the sales from China is just too small to overcome the difficulty in the US…So I will NOT try to be hero at this time.

Categories
Stocks

Homework

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Last Updated on November 15, 2007 by stlplace

I resumed my homework on stocks today. By homework I mean the research I did on stocks, basically I copied the financial numbers, such as revenue, earning, company own forecast to a Google spreadsheet, and do some simple calculation such as growth rate, price sales ratio (market cap divide by the revenue). This is very rudimentary but notheless it does give me a feeling whether the stock is expensive or not. On reflecting the mistakes on CROX, I think one reason is I did not keep the speadsheet up to date 🙁

Actually on my spreadsheet for CROX (last updated on July 26), I had a few lines like: “sell some before Q1 earning”, “sell some before Q2 earning”? I did sell some on early May (before Q1 earning), but I did not cash out any before Nov. 1 melt down. I am not saying “had I did the homework, things would be different”. In stock market there are no “had I”, or “would be”. But one thing I can make sure is sit tight, and do the home work.

Now back to the homework for Mindray (NYSE:MR) and Longtop (NYSE:LFT).

Categories
401k and Personal Finance

New 401k plan

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Last Updated on November 15, 2007 by stlplace

No I haven not changed my employer or anything, but my company was acquired by a global 50 company this year, and from next year we will have new 401k plan. Currently my 401k is in Vanguard and I am happy with them so far. One advantage with Vanguard is they have the lowest fees in the industry. If all other things are equal (in the long run, I do believe the performance of most large cap stock funds tend to converge), lower fee means better performance for investors.

nest egg pic

(Picture from Money Magazine)

That being said, I also found some interesting things about my new 401k plan: the new funds categories by the investment regions; and the company stock.

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