Fourth quarter 2007 update

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The miserable performance of CROX erased much of my 2007 gains. But thanks to the rebound of Mindray (MR), I am still be able to be above water 🙂

Some random thoughts of Q4 and year 2007 stock performance:

1) Crocs (CROX): I agree with my friend StrengthTrader, Crocs is a fashion product. It’s almost unbelievable for Crocs to become popular in much of the world in such a short time. At least it grew much faster than Nike did 20 years ago. But will Crocs be as big as Nike some day? I don’t know. The market thinks it will NOT (traded at PE of about 20, the company projected 35 to 40% revenue growth in 2008).

2) Mindray (MR): benifit from the global spending of healthcare. Although the US market did not turn out to be as successful as we like, other interntional markets especially South America made up the slack.

3) Wuxi Pharma (WX): I sold the stock because I thought its valuation was a bit rich, and I am not expert on biotech and pharma. But I do believe the contract research and other pharma outsourcing industry will grow in a healthy rate, thanks to the cost cutting in the big pharmas. Note WX is the tier one player in this arena.

By the way, I am very disappointed by the Pifer (PFE) stock. I’ve hold 14 shares of PEF for more than 3 years now. Maybe I should trade those PFE shares for WX?

4) Longtop (LFT): this one is more specular because it serves the Chinese financial industry. The plus side is the Chinese banks and insurance companies need to ramp up their IT systems (especially software side, which plays to Longtop’s strength) these days, and they got the money. So consider this is like a oil serive company, who serves the oil companies which benifit from $100 oil 🙂

5) Losers: NINE, SBUX, XFML (all realized), and GSIT (un-realized).

Not all losers are equal. I think NINE and XFML (no offense to people who hold NINE/XFML now) probablly has the worst management and I don’t think they will do well in the future. Interestingly, I got this email from NINE IR people for the new year, and it goes like this:

Dear people,

Best wishes for the year to come!
Please click here to see our greeting card, thanks.

Ninetowns Internet Technology Group Company Ltd.

SBUX: I do drink their coffee, and like the management. But it appears all the things are against them (rising oil price, rising milk price, shrinking US consumer discretionary spending, competitors like McDonald and Dokin Donuts) in the near term. The US market is satuating, as I saw Starbucks stores almost in every corner (I would imagine a Starbucks store) in my last 2 days walking around San Francisco.

But in 5 or 10 years, if they can open 5,000 stores in China, and 2,500 in India, and improve their profit margin to the US store level, maybe they will have a chance.

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