Weekend thoughts w/e Apr 19 2008

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Currency effects
While we are heading to $4 gas (partly thanks the weak dollar), not all are victims of this trend. Think Google or IBM. Google (GOOG) and IBM reported blow out earning, while cell phone maker Nokia (NOK) reported so-so earning (or outlook) last week. One key difference is the reported currency, Google and IBM reported results in USD, while NOK reported in Euro. We all know Dollar lost a lot ground to Euro in past year, since GOOG and IBM did a lot business in Europe (and internationally), their earning and earning growth is exaggerated by the depreciation of dollar. Nokia is hit by the opposite force. A more important question to ask is: can the dollar continue to slide vs. other currencies? Personally I would not bet on GOOG or IBM if their growth is mostly from the currency effect

ICBC, Goldman Sachs, China Invest Co. and Blackstone

According to news report, Blackstone (BX) is sued by people who claimed the company mis-represented in its IPO prospectus. China Invest Co., which paid $4 billion for about 10% stake shortly before BX’s high profile IPO, did not join the suit. I guess those guys very much like to sue because they have paper loss of more than 1/3 in less than 1 year. Although publicly they said it’s a long term investment and they don’t care about short term performance.

On the other hand, as I said in the other day “ICBC released 2007 results”, Goldman Sachs snatched 5.75% stake of the biggest Chinese bank (ICBC) for meager $2.6 billion in early 2006, now the investment went up more than 400%. Guys at China Invest Co, learn from the Goldman Sachs guys 🙂

Let it be
I learned this Taosim from Xiao Ke, my bro in law. He suggested this 无为 (not do anything), when he heard I was teaching my wife about driving. I think this could apply to investing in stock market as well. I am not saying “just buy and hold”, I am thinking not to “tape reading”, or “紧盯大盘” all the time. Maybe I should apply “let it be” to the China Invest Co. BX fiasco, and Goldman Sachs steal of ICBC, because after all, I am just a little migrant worker.

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