Croc-less for now

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I sold the remaing few CROX shares today. Not because I was scared of the bad news from mortgage and banking industries, and general worsening US economy. It’s because I think the Crocs story is over, for now.

Lessons learned (this is related to my previous Stock Lessons series…)
1) When someone claims some new company is going to be next Microsoft, Google, etc. Run, not just walk away from it. On May 26 2007 our friend “expert” Georges Yared wrote a piece saying Crocs is the next Nike. Well, it looks more likely Crocs is the next Heelys 🙂

2) Cramer is actually right on this one. He said CROX is a trade. And he also said “massive short interest, plus lots of hype” means disaster down the road.

3) Last but (certainly) not least, our real expert Buffett said in his year 2007 annual letter to shareholder: his worst investment in his 40+ years of investing, a shoe company called Dexter.

A few random question for myself:
1) Which is harder, invest/speculate in the US market or the Chinese market?

2) With this week’s drop of Mindray, CHL and RIM, which one is more attractive? I need to consider both the risk/reward, and co-relation (diversification) of the stocks. Both CHL and RIM are wireless play; Mindray and CHL has 50% and 100% exposure in China, respectively.

3) I started to invest in the US in year 2002, so the last bear market in my memory is 2002. I remember in summer 2002 Enron/Worldcom accounting scandals are all over the news, and everybody is skeptical of all the corporate earnings. The assumption of “guilt”, just like a few bad apples could spoil the whole basket of fruits.

It looks like the world credit market (banks, hedge funds) are in a very similar situtation now. When will things cleared up? I don’t know. Last bear market touched bottom in March 2003 when US launched Iraq war. Unfortunately US is running out money this time, and China won’t lend this time, so we have one fewer indicator this time 🙂

Seriously, the root cause of last bear market was the dot com crash and the accounting scandal. The market rocovered only after the dot com bubble went away, and the Sabane-Oxly law to enforce better accounting control got passed.

This time the problem is a little different: an important piece of economy, financial institutions (banks, insurance companies, hedge funds etc.) are sick. The goverment is trying to inject something to keep them going. I think it will take a while for them to stand on their own feet and keep the economy growing again.

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