Author: stlplace

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Business Fun

Google Checkout take on eBay’s Paypal

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Google is aggressively promoting its online payment service Google Checkout lately. It’s offering $20 off $50 purchase at online store buy com. The aim is very obvious, eBay’s Paypal. To counter Google’s attack, Paypal is offering free shipping with a number of partners including Dell. Who will be the winner of this war? I don’t know. But one thing I know for sure is Google has a deeper pocket (10 Billion in cash); they could do this promotion without hurting itself. If a customer needs to buy some electronics, buy com is a good place to checkout 🙂

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Fun Stocks

Heelys is going IPO

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Heelys is the shoe can be used both for walk and skate, using the retractable wheel under the heel. It is most widely worn by kids and teenagers aged from 6 to 14, and from what I see from Zappos (the online shoe store), kids and parents are crazy about this.

Now the company is filing for IPO, here is the SEC S1 filing. I expect this to be a hot one because of recent success of footwear maker Crocs (CROX) and atheletic apparel maker UnderArmor (UARM). They both gained 100% after their recent IPO. This is partly due to the fashion craving and generous spending of American consumers: from iPod to Crocs, it’s not just the functionality, the fashion is more (if not less) important. 

While the proposed IPO stock to be priced between $16 and $18, I think it could open at $22 to $25. The proposed ticker symbol is HLYS on Nasdaq, it is set to debut on Friday Dec 8. If I make some profit on this one, maybe I can buy myself a pair of Heelys? I like skating (roller blading). Be aware skating is a dangerous sports, so wear your protective gears especially the helmet.      

Heelys shoes

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Saint Louis

Back to St. Louis

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I came back to St. Louis today. The weekend San Jose trip was great; both the weather and everything else. I got to see the Montery Bay, which includes 17 miles drive and world famous Pebble beach (golf course). Not to mention the Chinese food etc. As a guy in the tech industry, I always have great respect for Sillicon Valley and its entrepreneurships. There are just too many familar names: from big players such as Yahoo, Sun Micro, Cisco, Adobe to smaller ones such as Tivo, Redback Networks, Foundry Networks, Hyperion…Today’s San Jose Mercury News featured a little known startup called PanDigital which makes the LCD picture frame: it has only about 10 people in San Jose, and it oursourced manufacturing and support to China and India respectively; it is expected to sell 50,000 units with $50 million revenue. The key component is a chip which stores and shows the digital photos. I started to appreciate the innovation of chip: software combined with hardware really make the difference in our digital lives.

St. Louis is cold, and still covered with snow. Tomorrow is going to be warmer.  

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Saint Louis

Snow Storm

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We had worst snow storm in my 6+ years stay in St. Louis. The thing makes life harder is the “sleeze”, or ice rain (instead of the snow). It freeze the car windows and doors quickly. I spent about one hour for normal 15 to 20 communte from work to home. This morning I spent another hour to scrap the ice on my car.

I also lost electrcity last night. This morning when I walked to Schnucks (the grocery store) for ice scraper, I noticed it is on its own generator.

====================================== 
Outage start date/time:   Thursday Nov 30, 2006 11:37 PM
Outage status:   Order is being investigated
Cause of outage:   Cause not yet determined
Estimated restoration time:   Not Available
Number of customers out:   112
=====================

On positive side, I tried to help pushing two cars last night. One van was successful, another car Ford Taurus not successful. I felt as good as I solved a hard problem when I saw the van made it out of icey driveway. So far I still see my plane to San Jose on schedule. I believe there are many cancellations from Chicago ORD and St. Louis Lambert airport these two days.

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Saint Louis

80 20 Rule

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I heard about this 80-20 rule from a friend a while ago. It says “we spend 20% of our effort to accomplish 80% of the things; and then we spend remaining 80% of the time & effort to complete the remaining 20%…” I think that pretty well summerize what I was doing at my work lately. I think I want to add more here: the second half is more tough sometimes. Because it seems just never ending.

OK, enough about whining. I am going to do something meaningful: read some SEC filings for the companies I am interested. I have not forget writing about Chinese software companies, will resume soon…

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IPO

Interactive Brokers’ Dutch Auction IPO

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Normally as individual investors we don’t have access to the IPOs, as they are usually handled by the big investment bankers (Goldman Sachs, Merril Lynch,…), and the IPO stocks usually are sold to the institutions (a.k.a, rich people) and they can make the easy money.

This has changed by the Google IPO in August 2004, at the time the founders (Larry and Sergin) decided to try the Dutch auction so that individual investors can get a piece. The IPO was not well received because of the not-so-good market condition at the time and confusion over Dutch auction process. This time, Interactive Brokers, will follow the path of Google for its $500 m public offering. They filed the S1 prospectus to SEC today. Here is an introduction regarding how to bid.

Recently the exchange stocks are very hot. NMX (New York Mercantile Exchange) IPO was well received.

Be aware IPO stocks are usually a bit volatile, though.

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China Stocks

Checked in Home Inns Again

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I mean the stock (HMIN), not the motel because I am in the US now. I know it was a little speculative, but I think it’s ok to put 20% of my “mad money” into this even after the amazing run from $22 to as high as $34. I think there are many reasons account for this.

1) It has more than 100% year to year revenue growth; it’s opening new hotels like crazy. Initially I was a bit concerned with this kind of growth in China and I talked to a friend in 2nd tier city in China. My worry is the affordbility of RMB 180 room rate in 2nd tier or inland cities because the wages in coast cities are much higher than inland cities. It seems not a big problem. On the other hand, I think they (Rujia) got better rate for real estate and labor in those cities; in other words, I believe they can maintain the profit margin.

2) The analogy of China/US top chain hotel market share: top 10 US hotel chains have 60% US market share; currently top 10 China hotel chains have 6% of the China market share. This got many people excited about its potential growth. I noticed from Yahoo Finance that there are two articles on WSJ on this lately (although I have not read it). I heard about the following rule to spot the top of a stock: when a company (and its founders/CEO) is mentioned in all these business magzines, it may be at peak. But I think Home Inns is not there yet. Hotel is pretty boring concept in the US. Wall Street analysts just started to get excited on this.

3) From consumer point of view, I think it’s attracting people who used to stay at 3-star hotels (high end) and Zhao Dai Shuo (low end). 3-star hotels in China used to cost RMB400, but with promotion now you can get it for little more than 200. The Zhao Dai Shuo cost less than 150, but they don’t get private bathroom, free Internet…I think Home Inns got a lot business travellers from both of them.

In summary, I know I made a mistake by selling it too early, but it’s not too late to buy HMIN at its current price (32.50 to 33). Yes, from traditional valuation point of view, it’s insane to buy a stock with PE of 160 . But remember at one point, was Google a stock like that? The most important is, they need to deliver the growth as expected.

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Saint Louis

Happy Thanksgiving !!!

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I am watching the annual Thanksgiving parade in downtown St. Louis (from TV). The weather here is great. I went to Panera Bread and the newspaper is already gone (hint: people are gettting the newspaper ad. and do research about tomorrow’s shopping deals now). Of course you can get the electronic version from dealsea.com nowadays.

Seriously, I want to thank my family, friends and coworkers for the past year. Life is not easy from time to time, but with your support, I enjoyed a lot memorable moments and got more strength…    

Categories
Stocks

A Closer Look at Oralce of Omaha

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If you read my blog for a while, you know I am a fan of Warren Buffett. Not just because he is the second richest man in the world; it has more to do with his investment philosophy and the way he lives his life. Last night CNBC’s had an one hour show in which the reporter spend one day with Warren and I liked it very much; and I gurantee it’s much more insightful than Jim Cramer’s Mad Money show. One of the question people usually ask is “why does not Warren live in New York, the financial center of the world; and instead live in Omaha, a small boring city in Mid-west”. I know the answer because I heard it from my friend before. But Warren’s answer still left deep impression on me. He said “if I stayed in New York, I would get 100 good ideas (and get distracted). While in Omaha I can focus on one great idea”.

I think this “focus” thing is very important, be it in stock market, business, career or personal life. While I talked a lot about the mistakes I made in stock market in my “Stock Lessons” series, I think “lose the focus” is the main reason.

Continue reading “A Closer Look at Oralce of Omaha”
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Stocks Web

RedHat is moving to NYSE

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It’s not news any more. There are many discussions on the Yahoo message board. Basically Redhat, which is traded on NASDAQ under “RHAT”, is applying the move to NYSE, the good old New York Stock Exchange, under ticker symbol “RHT” on Dec 12. I think it’s a proactive and smart move from RedHat management. Generally NASDAQ is a more volatile market than NYSE; and it’s especially true for RedHat stocks lately because of all these news. This move won’t get rid of all the day traders or short sellers, but it should help.

Of course, the most important things of all, is continue to provide the product and service the customers want. Here is a survey of CIOs and RedHat ranked No. 1 overall.

You can see the news here.

Disclosure: I do own RedHat stocks.