Author: stlplace

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Investing

A wipe out story from mitbbs

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Original link here. Some discussions at trader1688. I don’t know even if Warren can come back from this one. Just like in soccer, when you are 0:10 and have 10 minutes left, basically even Maradona (wiki: Diego Maradona) can not help. That’s why we don’t want to “all in” (in this case, use margin) when we speculate. As Buffett and Munger did in the past, always keep some cash at hand.

发信人: failed (Failed), 信区: Stock
标 题: 紧急求救：FNM损失已经12万了，我该怎么办？谢谢您了！！！！！
发信站: BBS 未名空间站 (Tue Aug 19 12:35:30 2008), 转信

I understand investment is a personal choice and I deserve whatever I have.

However, during this critical moment,
your any comments are sincerely appreciated.

Thank you so much!!!

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Beijing Olympics Shanghai Composite

Disappointing moment

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Obviously when Chinese track star Liu Xiang quit the race due to heel injury, we are all disappointed. Not only the fact he could not get a “face saving” gold medal, and he is China’s only hope on track and field (at least from men side); but also the fact we did not know how serious his injury was. At the same thing, I can fully appreciate the pressure on him, imagine 1.3 billion put hope on me. I would not think about that probability. My wife has a lot sympathy for Liu Xiang, but I rebutted “at least he is far richer than most of Chinese” 🙂

Stock market
China TechFaith also disappoints:
From Reuters, UPDATE 2-China TechFaith gives weak Q3 outlook; to cut jobs. So CNTF is following Spreadtrum SPRD’s step. Don’t try to bottom fish on them yet! I expect the handset business in China continues to be challenging, for the near future.

The broader market:
The US market goes sideways as financials and consumer spending continue the downward pressure. In China, the mood is much pessimistic, as the Shanghai composite drop around 2300, the lowest since early 2006. So are we heading to a real estate crash in China? Let’s me borrow one word from Mr. Greenspan, it’s possible, but unlikely.

Categories
IPO

Spreadtrum account receivable problem

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SPRD_AR_inv_2Q08
(Spreadtrum A/R and inventory from 4Q 06 to 2Q 08, click to enlarge)

As shown in the picture above, their A/R (account receivable) jumped from $1.4 m on Mar 31 to 17.4 m June 30; inventory did not reduced much. This is also evident from its reduced cash postion. Read more details from its earning release if you are interested.

Source: my google spreadsheet, data from SPRD investor relation and SEC filings.

Categories
Beijing Olympics

NBC Olympics broadcast: the good, the bad

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For US audience of Beijing Olympics, NBC (including CNBC, MSNBC, USA, Telemundo and Oxygen) is the only place for extensive coverage, because the exclusive broadcast deal between NBC and IOC. While NBC did unprecedent largely positive coverage of this event, Beijing and China, I can still felt the “colored glass” of some of the comments from the anchors from time to time.

The good: the scale
NBC nearly sent all the best crews to Beijing, it is doing live broadcasting for more than 2,000 hours, covering topic from sports to the Chinese traditional snack food in Beijing. And it is airing the regular programs such as “Today” (Matt and Meredith), 5:30 PM evening news (Brian), Meet the Press (Tom) from Beijing, in addition to extensive Olympics coverage. So in other words, NBC News Operation division is essentially moved from New York to Beijing these days.

Because NBC has experience in technology, their camera crews did the opening ceremony better than CCTV (the delayed video playback was a business decision). It also has so many channels so popular sports such as gymnastics, swimming, women volleyball etc are well covered.

The bad

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IPO

Time to cut Spreadtrum SPRD loose

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I felt lucky I did sell some Spreadtrum (Nasdaq:SPRD) shares a short while ago when it exceeded $6 (a quick pop). But I don’t know why I bought some back couple days ago at $4.48. I did not bet on earning these days, but this one had dropped quite a bit from the pop, and the expectation is low. So I thought I am relatively safe. Remember margin of safety.

Well, it turns out semi-conductor stock has no MoF. Remember a while ago the star player nVidia (NVDA) fall out from the graphics chip quality problem? My small speculation player SPRD also fell off cliff. Here is the results.

To be honest, I think 2Q results was OK, but the 3Q forecast is disaster. Quote press release: Spreadtrum currently expects revenue in the third quarter to be approximately US$20 million, which represents a sequential decrease of approximately 50% from the US$40.2 million in the second quarter of 2008.

I am not going to do any fundamental or valuation analysis. It seems to me the management (that means Dr. Wu Ping and his associates) blew up badly on this one. The business itself probablly still has some value, but I lost a lot (blind) trust on management team. So I am going to sell all my shares tomorrow morning. Take a loss 🙁

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gadgets

China Telecom Revamp

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Players: foreign investment bankers, Chinese goverment

The motivation of Foreign investment bankers: pump and dump, make money from the warrants (options) in Hongkong market.

Chinese goverment
Goverment usually does not know economy or business, just look at Bush admin you will know. In China goverment plays two roles in telecom revamp: as regulator and as majority owner. This makes the matter more complicated, and it seems to me goverment revamp effort is half-baked, also widely expected. It did not give big surprise to the market and the consumers.

Effectiveness of Chinese goverment policy in the past: telecom revamp in the past; regulatory effort on real estate (so far so failed). Of course we can not read the history book and do the investing. Otherwise all the greater investors will be history major.

Note: I wrote the above a while ago right after China offically started telecom re-org (May 23). I did write about the telecom re-org shortly after May 23, here are some.

New developments

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Beijing Olympics

The people behind opening ceremony: Zhang Yi Mou and

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his crew. The opening ceremony beat many people’s expectation. Yesterday and Today I have heard two coworkers walked over to my office and congratulating me. I think we should thank Zhang Yi Mou and his crew instead, in addition to people who provide the $300 million budget 🙂

Zhang Yi Mou
(Courtsy of Yu Pei, blog)

This may not be a complete team of directors who work for the openning ceremony.

An interesting story about Zhang Yi Mou, when he first started as a camera-man, he had to sold his blood to get a decent camera (I think the time is around 1980).

Categories
Beijing Olympics

Anything is possible

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Let me borrow the ad slogan from Li Ning’s apparel and shoes company: anything is possible. His performance in sky demonstrated this idea very well. So as the opening ceremony, I think it blew away a lot of people’s expectations. So congrats to Mr. Zhang Yimou and each of 15,000 performers, and their families, for the hard work and dedication. For Li Ning, this is also a personal redemption: after winning 3 gold medals in 1984 Los Angeles Olympics, Li Ning failed badly in 1988 Soul Olympics, and was blamed and ridicued when he came back from Soul. He kept his mouth shut, built China’s own sports brand (Li Ning) in last 20 years. Now he got this honor.

Li Ning Olympics torch light run in sky opening ceremony pic
(Li Ning run in the sky to light the Olympics cauldron, source: CCTV)

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Beijing Olympics Shanghai Composite

Olympics official starts, market, tax refund

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Beijing Olympics offically started just couple hours ago. Thanks to NBC pursuit of rating and advertising dollars, US auduiences won’t see live broadcast of the opening ceremony. A video playback will be shown tonight at 6:30 PM at local NBC channel (KSDK channel 5 in the case of St. Louis). It will last 4.5 hrs.

Sadly as I expected (did I sound like Dai Tou Da Ge), Shangai Composite Index dropped nearly 5% in this historical opening day. It seems neither fund managers nor retail investors (Shan Hu) are listening to president Hu’s advice, which is to have a strong and balanced stock market. Maybe those people will regret it sometime later?

On a positive note, I received my federal tax refund today. Just in time for more stock bargain hunting when CitiGroup and Merril are bailing out? My wife will not like this idea 🙂

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Beijing Olympics Shanghai Composite

China: embracing bear market after Olympics?

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Couple days ago I suggested the China stock market could have a relief rally after Olympics, when the party is over without major glitches. I still belive Beijing Olympics will turn out to be ok, amid so much worries from human rights protests to security threats. I also believe Chinese economy will not stand still after the Olympics.

But I change my view on Chinese stocks today, after the Chinese ADRs dropped big in the US: from FXI (NYSE: FXI), to CHL (NYSE: CHL), to Sohu (Nasdaq: SOHU), all dropped around 5% or more today, less than 14 hours before the opening ceremony (which will begin Beijing time 8:08 PM, Aug.8 ). The problem is not only the expected slow down of Chinese economy, but also due to most Chinese stocks (from Shanghai, to Honghong, to NewYork) are over valued. Now they will get a reality check. Give an example, ICBC (1398.HK, 601398.SS), traded at 3 times book value, according to JRJ. That’s much higher than the US counter part such as BoA (NYSE: BAC), Wells Fargo (NYSE: WFC). Algthough we know US banks are in trouble lately because of subprime/credit crisis, ICBC can not justify its 3 times PB ratio if its growth slows down (which is possible).

So hold some cash, hold your breath, and I expect we are having a rough ride in the near future 🙂