Year: 2008

Categories
China IPO

The economy of China Economy Hotel

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Last Updated on March 14, 2008 by stlplace

In his annual letter to shareholders, Buffett said the “party is over”. He was referring to the insurance business, which is the cornerstone of Berkshire Hathaway.

It appears the party for the economy hotels in China is over too. You can read this Chinese article at Sina if you know Chinese. This is understandable because as the leader of this pack, Home Inns (Rujia, HMIN) got listed in the US in Nov. 2006, lots of money has been poured into this hot sector in China, notably the 7daysInn (fund by warburg pincus), Hanting (found by Home Inns founder Ji Qi, raised $85 million fund last year, about the same size of Home Inns’ IPO proceeds).

Now they are paying the price of over-investment and fierce competition thereafter. Let me quote the Chinese article:

锦江之星的这家店位于吴中路和桂林路口，这里并不是上海人气最高的地段。但在不足4公里长的吴中路周边，却挤下了莫泰、7天连锁酒店、上海优家旅店、上海东湖之旅虹锦酒店等超过8家经济型酒店，其中汉庭竟然在同一区段拥有两家店面！

English translation: JinJiang star hotel is located at intersection of WuZhong Rd. and GuiLin Rd., which is not a hot district in Shanghai. But along this less than 4km WuZhong Rd., there are more than 8 economy hotels including motel168, 7daysInn etc., and HanTing even has two hotels in this district!

Jinjiang Inn at ChangNing Rd.
(JinJiang Inn at Shanghai ChangNing Rd., March 2007, full size pic here.)

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Categories
Master Series

See’s Candies, Balance Transfer and Turbo Tax

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Last Updated on March 12, 2008 by stlplace

A Chinese version of the story can be read here (thanks to Shanzi for translation). You can read story (in English) from Buffett’s 2007 annual shareholder letter.

See's Candies

Why do I emphasize this story? Too many times I fall into some growth stories (hint: next Microsoft or Google), value traps (hint: Heelys and maybe Crocs), etc. This story serves as a reminder to myself: business is about making money. Less capital, more earings (not paper earning but the free cash flow), means great business. I think this story also implies not to take unnecessary risks or leverage: the recent down fall of financial firms exactly confirmed that.

Balance transfer
Also, I found this balance transfer (0% for 12 months, no fees) to be attactive.
http://www.fatwallet.com/t/52/810638/

The Turbo Tax online versions
I have used it since year 2001 (tax filing for year 2000), and I liked the product. One feature I like is TurboTax kept all the filings for previous years. A minor thing: I am going to save some money without using the State filing from Turbo Tax, because the calculation of State tax is fairly straightforward in my case (once the federal is done).

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Categories
China

Mindray buys into US market

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Last Updated on March 16, 2008 by stlplace

Mindray (NYSE:MR) continued its US market expansion today, as it agreed to buy the Patient Monitoring business of DataScope (Nasdaq: DSCP) for $202 m (see this Reuters news). My gut feeling is this is a fair deal. Mindray paid about 1.25 times sales revenue for the unit. According to Reuters: “The (DataScope) unit had total revenues of $161.3 million in calendar year 2007, approximately the same as those generated from Mindray’s home China market.”

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Categories
Business

Greed: from Enron to Sub-prime fiasco

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Last Updated on March 17, 2008 by stlplace

(Update) I started this article a few months ago. Just as I complete it today, I heard the Elliot Spitzer’s scandal (possibly criminal prosecution) regarding his involvement in prostitution ring. How ironic. I hope people don’t discount Elliot’s relentless effort to clean up the Street, no matter what comes out of his case.

(Original) When the Enron scandal surfaced in Summer 2002, I just started to learn about US stock market. But I vaguely remember many other companies such as Worldcom, Tyco also exposed their problems later on. The CEOs of those companies are all prosecuted, and corporate governence of US companies are much improved since then. The congress scrambled to come up with the Sabane-Oxly Act, which helped to make the corporate accounting books more accurately reflect the reality of companies well-beings, and strengthen the investors confidence.

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Categories
gadgets

HiPhone and iPhone new SDK

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Last Updated on March 11, 2008 by stlplace

Did you hear about HiPhone? It’s a knockoff iPhone made in China, here is one I found through Google Product search. Since US consumers are in recession (as wisely pointed out by Buffett and Bill Gross lately), this is not a bad choice if a person wants to impress his/her friends but don’t have the kind of money to buy a real iPhone ($399) or sign up the AT&T plan (starting $59.99) . In this case, the HiPhone costs $240, and no plan is required.

HiPhone photo

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Categories
Stocks

Croc-less for now

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Last Updated on March 14, 2008 by stlplace

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 🙂

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Categories
gadgets

Why I think China Mobile is a buy: I

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Last Updated on March 14, 2008 by stlplace

First a bit background.

Re-org of China telecom industry
All the big players: China Mobile 中国移动 (CHL), China Netcom (CN), China Telecom 中国电信(CHA) and China Unicom 中国联通 (CHU), are majority owned by the state. In the widely anticipated re-org plan, the goverment will try to create more competition in wireless arena (right now CHL is much bigger than CHU); and save the fixed line operators, as CHA and Netcom are losing landline subscription to mobile phones. China Unicom, currently the smaller rival of China Mobile, will sell its CDMA network to China Telecom, and meanwhile CHU (with its GSM network) will merge with China Netcom.

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Categories
Business

Why Sprint Nextel merger failed

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Last Updated on March 5, 2008 by stlplace

Last week one of the news in wireless arena is Sprint Nextel wrote down all the book values for the Nextel acquisition (about $29.5 billion, see Bloomberg). Put it in perspective, this is one of the largest fiascos of corporate merger&acquisition in recent history. The magnitude is in the league of AOL and Time Warner merger in dot com days.

sprint nextel merger pic
(Mr. Forsee, left, shakes hands with Nextel founder in 2004. Source: USAtoday)

The following is from a financial advisor’s view about Sprint Nextel stock. The original source can be found here.

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Categories
Fun

Heavy snow, RIM

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Last Updated on March 5, 2008 by stlplace

(Update Mar 05) My wife Shanzi had a nice write up (and pics) about yesterday’s snow. In Chinese.

(Original) We had a 10 inch snow (huge by St. Louis standard) today. It took me more than 1 hour to drive from my work place to home, which usually takes 15 minutes. Of course I took a different route since I don’t want to take the highway, thought that would be a huge parking lot. There are less traffic on those side roads, but I almost got stuck in snow twice when I tried to go up-hill.

After one hour struggle, I did not make it to my packing lot, because I could not drive up on my drive way, so I left my car there (see below).

IMG_6168

Lessons learned: do not take unfamilar side roads (especially roads with slopes) in snow. My car got stuck in Schultz Rd. and couple side roads along Schultz when I tried to cut across to my home. I saw other cars on the roadside, stuck in snow on the way. I should be more patient (wait on Page).

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Categories
Stocks

Crocs released 10K year 2007

Reading Time: < 1 minute

Last Updated on March 11, 2008 by stlplace

Here is some interesting stuff I read (auditor’s opinion):

“We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements as of and for the year ended December 31, 2007 of the Company and our report dated February 29, 2008 expressed an unqualified opinion on those financial statements and included an explanatory paragraph regarding the Company’s adoption on January 1, 2007 of the Financial Accounting Standards Board’s Interpretation No. 48, Accounting for Uncertainty in Income Taxes, and the adoption on January 1, 2006 of Statement of Financial Accounting Standard No. 123(R), Share-Based Payments.”

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