Year: 2007

Categories
China Stocks

Buffett and PetroChina

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Last Updated on October 10, 2007 by stlplace

These days “Buffett sold PetroChina stocks” are all over the news, especially in the Chinese news media. After all, Warren has the best track record among stock investors in our time. But, what should we, average investor, read from this news? Or (on the other hand) can we simple ignore this news?

First let me correct the news headline. I think we should say “Buffett reduced his stake in PetroChina H shares”, from about 11% to 5.5% of floating PetroChina H shares. Second we should not discount Buffett’s move here. Unlike Greenspan and many others, he is the guy does real investing, and beat the market (S&P 500) consistently. Of course I’m not saying we should go to another polar: follow him blindly.

PetroChina gas station pic

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Categories
Stocks Technology

Hard disk pioneers won nobel

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Last Updated on October 9, 2007 by stlplace

From Reuters, Hard disk pioneers won Physics nobel: France’s Albert Fert and Germany’s Peter Gruenberg won the 2007 Nobel Prize for physics on Tuesday for a breakthrough in nanotechnology that lets huge amounts of data be squeezed into ever-smaller spaces.

My take: Hard disk has changed the way we live and work, as we can find it in MP3 players or computers. But hard disk makers are not good investments in general. One can look at Seagate (STX), Western Digital (WDC) long term chart (5, 10 years) to see its so so performance. I think this industry is just too competititive and chronic price cuts makes the profit too thin.

Good technology does not necessarily translate into (very) profitable business. I think Google is a rare specie in the tech arena, with its unique business model and almost monopoly postion in the market, and the ever lower cost of hard drives to store its data 🙂

hard disk pic

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Stocks

Ping An and China Life bid shares from each other

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Last Updated on October 9, 2007 by stlplace

PingAn insurance logo

This is what I heard from a guest at “Market today” (China-CBN). Here is how it works: China Ping’an insurance (601318, 2318.HK) and China Life insurance (601628, 2628.HK, LFC) holds significant shares (more than 3%) from each other. Now they are buying shares from each other in the market, which will drive their stock prices higher. This in turn, will bring more profit (unrealized investment gains) to each company, according to the new accounting rules being effective this year in China. As a side note, investment gains exceeded many public companies’ original (main) business profit this year. For instance, Youngor (600177), the famous apparel maker, makes more money from the investment in Citic Securities (600030) than from shirts/jackets.

I’m not accounting expert, nor have I researched how similar things are counted in US GAAP. But my gut feeling tells me China new accounting rule is one reason for the China bubble right now. Because at the end of the day, those paper profit will be gone as fast as they come.

BTW, I’m just curious, when China Life (LFC) reports to SEC, what kind of accounting do they use?

Categories
China

Got visa, air ticket

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Last Updated on October 16, 2007 by stlplace

Our visa applications finally came through, and I booked air ticket for my wife’s trip (PVG to STL, same itinerary as mine).

I already got the round trip ticket for myself, so the question is find a same ticket for her. I checked out flychina.com, aa.com and China-sss 春秋航空旅游网 (travel agency) and they all gave me a quote of about $1000. That’s not cheap consider my round trip ticket from STL to PVG cost about $1250.

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Business China

Introducing Vanke

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Last Updated on October 11, 2007 by stlplace

Vanke is No. 1 home builder in China. Today. Vanke A share (000002) went up 10% in Shenzhen, after it moved sideways for about two months. Note today is the first trading day after China national holiday break.

Real estate companies in China don’t get much respect these days. No matter how many new homes they built, how much tax they pay and how many jobs they create. This is similar to the US big oil companies. In this case it’s because the housing prices in China cities spiked again. The hot topic in China these days are “why the new home prices increase so fast”, “why those guys bid the land at such a high price (down the road, they will sell the homes at price even higher”. The “conclusion” is the developers must make good money off home buyers. This is certainly not accurate. I’m not saying the banks are making all the money, while the real estate companies are getting nothing. They certainly get a fair piece of the pie so that they can feed their families.

Front sign of Vanke Baima garden in SH:
Vanke_BaiMa_3

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Categories
Stocks

Another typhoon

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Last Updated on October 8, 2007 by stlplace

This one is for real. Here in Shanghai it started to rain yesterday afternoon; today the heavy wind sometimes make it impossible to walk. I saw numerous people flipped their umbrella. Just as I was thinking I’m lucky, my umbrella did the same thing.

Zhongshan park (Kaixuan Rd.)
IMG_5487

Zhunyi Rd. & Changning Rd.
IMG_5486

Categories
China

Shanghai south railway station

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Last Updated on October 9, 2007 by stlplace

We went to the new (new to me) Shanghai south railway station yesterday. I was very impressed by the structure. It’s in deep constrast to the older Shanghai railway station (built in 1980s). The lights and landscape around the station are also very nice. Since I did not bring the camera, here are some pictures I found on the web.

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China Stocks

Buying house in Shanghai Series: II

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Last Updated on October 7, 2007 by stlplace

First a little background. Like the Chinese stock market, the Chinese real estate market has a brief history and I talked it a bit in my previous E-House post. Also, China is a big country and the real estate market varies by region, for instance, the Shenzhen market is cooling down lately while Shanghai market is becoming hot. Very much like in the US we could see Dallas and Seattle are still doing ok, while California, Las Vegas etc. are cooling down now.

Vanke_BaiMa_1

The picture above is taked from Vanke White Horse Garden in Shanghai (courstey of soufun.com, for more pics click here).

With that in mind, I am talking about my understanding the Shanghai housing market, in Q&A style.

1) Why the price went up so much lately?
It’s mostly supply and demand. The new supply is very limited in 2005 and 2006 because: the prevailing prices did not spur interest from developers to build new homes; the new supply of land is very limited.

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Categories
Stocks

Holiday reading etc.

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Last Updated on October 6, 2007 by stlplace

The Chinese market closed for a week during this national holiday. The HK and US market is still open. There are lots of actions of Chinese stocks in those markets. From the blue (red) chips (such as LFC), to more speculative ones (such as EFUT). It appears to me the valuation of FXI, LFC etc are no longer attractive anymore. But at the same time we can not ignore that the new money is continuing pour into those hot stocks.

My job is not to predict the market, nor am I an expert on FXI and LFC (although I did talk about those two a while ago). I picked up Philip Fisher “common stocks and uncommon profits” instead*. Phil wrote the book more than 50 years ago, but the 15 points to find the great stock still holds: product service, R&D, profit margin, sales, management,…

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China Stocks

National day holiday

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Last Updated on September 28, 2007 by stlplace

National Day (the birth date of PRC) Oct 1 is coming. I saw lots of flags on the street. Pretty neat, huh?

IMG_5426

Seriously, this is a good time for the travel industry to cash in. Because people will have a week off. Many people are doing some tour: from Sanya, Li Jiang to Bali or Bangkok…This is also a big test for the airline and railway system, because they need to move millions of people: some go on tour; some visit family. We will be the latter group.

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