Author: stlplace

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Stocks

Heelys one month after crash

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I normally don’t participating in stock discussion forums. But this one titled “company and stock did not connect” at Google Finance caught my attention a month ago. So I went ahead and commented:

Original comment: why is the good performance of the company disconnected from the horrible performance of the stock? When a company is more profitable than its previous quarter in the previous year, the company is more valuable. Anyone have any ideas?

My comment on Aug 16: The problem with Heelys is its prospect. In stock we not only look at its past, more importantly, we look at its future. With Heelys, the future is not clear (at best), not so good (in reality).

The inventory issue is not isolate problem. Their sales people may have pushed too agressively with the retailers for the “back to school” season. Now their typical strong Xmas sales is at risk.

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China Stocks

Secular growth, Mindray, New Oriental

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I was looking for a secular growth stock in China. By secular growth I mean the business grows continously without the normal business cycle. One benifit of secular growth is it usually does not go up or down a lot as economy cycle does. A side benifit of this is we (investors) can sleep better in the night 🙂

The opposite of “secular” is “cyclical”. For example, we normal think the following industries are “cyclical”:

1) Oil, metals and other commodities;

2) Real estate (we have seen the downturn in the US housing market lately);

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China

Bracing the typhoon

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It is said the largest typhoon in a decade, will hit Zhejiang province and Shanghai on tomorrow evening.

Heavy rain already came today.

IMG_5401

Categories
Fun Stocks

Landlord change and a Haigui blog

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The apartment we rent has experienced ownership change. The current owner can not resist the offer given by new owner (more than 15,000 Yuan per sqr meter), and she sold it. The apartment is about 20 years old, and near Zhongshan park. From my observations newer apartments (5 or 6 years old) in the area can easily fetch 20,000 Yuan. This is the status of Shanghai housing market. Hot, very very hot.

I also found an interesting blog written by a Haigui (I believe). This is westernford at blogbus. I like some of the pictures and words there.

Finanlly I am reading something not about finance, stocks,…

Categories
Stocks

Charlie Munger

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Charlie Munger is the Vice chairman of Berkshire Hathway, and chairman of West Co. Financial. He has background in law, real estate, and investing. I found his recent Q&A on the West Co. Financial’s annual stock holder meeting to be interesting.

Here is the Chinese excerpt translation by Deng Hang; and here is the original PDF file in English, it’s 22 pages long.

BTW, the Q&A is not just about finance and stocks. It talked other things in life too.

Categories
China Stocks

One dollar is 7.50 Yuan

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Week in review 09/09 to 09/15

1) One dollar is 7.50 Yuan. This is the rate I got from China Construction Bank ATM today, using my BoA debit card.

2) The China People’s Bank raised interest rate (by 0.27%) again in the weekend.

3) Moon cake coupon: there are many “moon cake coupon” flippers these days, as mid-autumn festival is approaching. Basically they buy the moon cake coupon from people who got it from Danwei, and resell it to make a profit. The catch is most moon cake coupons will expire on Sept. 25, just like the stock options expires on the 3rd Friday of each month in the US market 🙂

4) Lots of books about stocks, investing in the book store: from Warren Buffett to Peter Lynch, and many “experts” I never heard of.

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Categories
China Stocks

Valuation of China A shares: raw materials

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Chinese stocks are becoming more and more expensive. From different statistics, average PE of the market is in 40s. This is not cheap compared to around PE 18 of US S&P 500. There are many reasons for that, and I’m not jumping into it. But I want to share an interesting phenomena here: these days the fund managers, and individual investors are looking for valuation safe haven, or in Chinese terms, 价值洼地.

What does that mean? Lately because some of the blue chips are so hot, they got PE of more than 50. For instance, Vanke (000002), is traded at 32 Yuan, the est. year 2007 earning is 0.60 Yuan, so the PE for 2007 is about 53. Note this is No. 1 weighted stock in Shenzhen Index (about 16%), and its market cap (more than 200 b Yuan, or $30 b) is more than top 4 US home builders combined. (Vanke is No. 1 builder in China and it has about 1% market share). China Merchants Bank (600036) has similar problems. By the way, I believe those are two best managed companies in China.

China merchants bank pic

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Categories
China Stocks

Ji Ming or Gu Ming?

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I remember seeing a book written by John Bogle (the founder of Vanguard) where he suggested “individual investors should buy mutual fund not stock”. I agree with some of his arguments, such as diversification. And I believe that’s also the fact in the US: where pension fund and university endowment fund invested in stocks, mostly through mutual funds. But I don’t agree with his conclusion.

Come back to China. Since the inception of Chinese stock market, invididual stock investors, or Gu Ming 股民 have been an important force. Some made money, more lost money in this process. New blood filled in when old guys got wiped out.

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Categories
Fun Stocks

Danbin and Zhu Ping

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I added some Chinese financial blog under “blogroll”. Two notables are Dan Bin (CEO of a private equity in Shenzhen), and Zhu Ping (Guangfa Fund manager, a graduate from Shanghai Univ. of Finance and Economics). Both are disciples of Buffett. Dan Bin bought a share of Berkshire so that he could attend the Berkshire annual shareholder meeting in Omaha.

Here is an interesting story written by Dan Bin.

关于2007年9月11日市场下跌的短信记录: (text message transcript: amid yesterday’s China market drop).

朋友:今天跌得好凶啊,还会跌吗?怕怕的。Friend: What a big drop! Will it continue to drop?
但斌:有可能。 Danbin: It’s possible.
朋友：啊！时间会长吗？ Friend: Ouch. Will the drop last long?
但斌：这个上帝知道。 Danbin: Only God knows.
朋友：：-（那咋办 Friend: What should I do?
但斌：等我有时间帮你给上帝打个电话问问。
Danbin: hold on, let me call the God and ask the question for you.
……

Categories
Travel

Shanghai budget hotels

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Looking for a cheap but clean (decent) place stay in Shanghai? I revisited this issue and have the following observations.

1) Home Inns, Jinjiang Inn, Motel 168 and Hanting Hotels are not the cheapest. But they offer the best value in terms of location (near metro station or major business center). I have stayed in Home Inns (Rujia) and Jinjiang Inn, they are both good. Motel 168 usually has bigger room, but not as efficent or cozy as the Rujia or Jinjiang. Never stayed in Hanting but they are growing very fast (recently they got another around of VC money, $85 m). Hanting should also be good because its founder Ji Qi is a person into details (hint: he is from Jiangsu province).

2) There are so called “Zhao Dai Shuo”, and their prices are slightly lower compared to the big four. But they are not as nice as the big four. Some have smaller rooms; some need to share the bath room, etc. They will exist in the market as long as there are some customers want to save a little, and their service is not too bad.

3) Hostels: we found this Maggie International Youth Hostel on Tianshan Rd., it was set up in a senior living compound. We checked out the room. Both 4 bed room (50 Yuan per night) and the double bed room (160 per room) are clean. From budget point of view, this is probablly the best deal 50 Yuan can buy in Shanghai.

maggie youth hostel