Author: stlplace

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Stocks

Weekend review w/e 080208

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What recession?
Last Friday evening we went to local Red Lobster restaurant at around 6:30, and we were told there could be 25 min wait as we saw a large crowd. Being impatient as I was, we decided to try Olive garden. When we went there, same thing: we were told the wait time is 25 to 30 min. It seems to me the mid range restaurants, because people still eat in this economy recession. So buy Darden Restaurant (parent company of Red Lobster & Olive Garden) stock (NYSE: DRI)?

Software glitches
AA baggage handling system broke down on Monday, and the problem persisted more than 1 day. Read this ABC news. How could this happen?

AA baggages handling system break down JFK pic

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Beijing Olympics

Call for help: watch Olympics Opening Ceremony live

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In the US? Today my coworker reminds me Aug 8, the opening ceremony is only a week away.

(Update Aug 7) More up to date stuff from mitbbs (go to the end of this post to get the instructions in Chinese).

TV
So far NBC family (NBC, MSNBC, CNBC) has no plan to do it live. NBC will show the video at 6:30 PM local time instead.

“Coverage of the Opening Ceremony from Beijing’s National Stadium, where athletes from over 200 nations will converge to ignite the Games of the XXIX Olympiad. ”

Net
UUSee: go to uusee.com and install the client software. But according to some source, the IP outside China will all be blocked because UUSee only got broadcast rights inside China (source: ChinaNews).

Sohu: same restriction as UUsee? To be confirmed.

Maybe some smart techies can provide us a solution? After all, that’s the first time China hold the Olympics, but the overseas Chinese can not see the opening ceremony live. Shame on the IOC and NBC 🙁

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Investing Life Tips

MO tax holiday, CHK hedge backfires

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It’s the holiday season again, this weekend is the MO tax holiday for back-to-school season. Quote the MO state gov web site:

Section 144.049, RSMo, establishes a sales tax holiday during a three-day period beginning at 12:01 a.m. on the first Friday in August and ending at midnight on the Sunday following. Certain back-to-school purchases, such as clothing, school supplies, computers, and other items as defined by the statute, are exempt from sales tax for this time period only.

Cheseapeke Energy Hedging backfires
Last night CHK reported its 2Q 2008 earning, it incurred a big loss because of in 2Q the natural gas price went up much higher than the bets CHK put together. Here is another analysis by bullishbankers for CHK. Like many things else in life, you get the upside, and you can get the downside too. Hedging is a perfect example. One interesting thing I noticed from the earning report is in cash flow statement, CHK has one million dollars at the end of 1Q, and zero cash at the end of 2Q. They raised cash since then (again, read the bullishbankers analysis, and CHK own press release).

BTW, to my readers, always apply your independent thinking when reading other bloggers’ (including yours truely) work.

Categories
Beijing Olympics Investing

Olympics buzz at work place

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Olympics buzz at work place
As the Beijing 2008 only 8 days away, I am hearing quite a bit Olympics query from coworkers lately, mostly from curiosity and good will (wish Beijing and China will do well). As a Chinese living in America, I certain also hope things also work out well, amid all the security challenges, air quality, traffic, etc. One interesting story I read yesterday (Chinese) is some Beijing Si He Yuan (wiki: tradional Beijing house) are opening to foreign visitors. They call it 奥运家庭旅馆 Olympics Family Hotel. This is real neat, and I think it’s a better experience than staying at 3 star hotels.

At the same time, I sincerely hope my goverment can improve the living for ordinary people. I know those migrant worker worked on the BirdNest may not have oppertunities to watch the game. This is ok, as long as they get paid fairly, their kids education get taken care of, they get affordable/good health insurance, and last but not least, they don’t have to wait in lines for days to get a train ticket to go home in the Chinese New Year.

Marathon Oil
Marathon Oil logo pic

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Investing

Cummings CMI and my energy play

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My 2 cents on Cummins CMI (a while ago)
I have watched CMI for a few months now, have not pulled the trigger yet. There was a brief chance around March 17. I dare not to buy it after it went above 50. Like commodity, short term CMI has some selling pressure because:

1) It’s an infrustructure/transportation play, with US/global economy slow down, its business should also slow;
2) At Micro level, I know Dodge Ram trucks use CMI diesel engine. Chrysler just announced the Ram production cut, so…

But I still like it because their diesel engines are very very good. I know very few manufacturers can make their quality diesel engines. A related thing, is the bio-diesel, if this becomes a reality, diesel engine will be more popular.

Today CMI got a huge lift after reported strong earning (seekingalpha: cummins engine chugs along nicely).

My energy plays
Oil, natural gas and oil services. I have Marathon Oil (intergrated oil), Chepeseake Energy (NG), Devon Ennergy (NG). And yesterday I added Smith International (oil service).

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CFA

Margin of safety, retake CFA

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CFA test did not turn out the result I liked to see. I thought about the reasons, besides the unlucky factor (my score right around the pass/fail line), I attribute the main reason to myself: I did not work hard enough, and my financial knowledge is not good enough. Imagine if I could make more than 70% in all the sections, I would not rely on someone’s mercy on passing the test. Thinking along those lines, I decided to not to challenge the result (in CFA exam rule, one can pay $100 to get it re-scored). I will pay $480 to re-take the CFA level I this Dec.

Of course, the key for me is make sure this time I work hard, make sure I reallly understand all the materials, so that I would have sufficient margin of safety (not the razor thin margin of safety, or pure luck like the June test).

Buying stock with Margin of Safety in Mind
This reminds me Chapter 20 of Ben Graham “Intelligent Investor”, as Warren Buffett emphasized at this year annual shareholder meeting. By that, Ben/Warren meant buy a good stock at bargain price, so that in case something terrible go wrong, we can still sell the stock without a big loss.

Just for fun: my unlucky test experience in the US

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CFA

June 08 CFA result

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IS out. I could not fall asleep this morning at 5:30 AM, 2.5 hrs before the official score release. Logged into the web, hope to see something, nothing there, watched some Bloomberg TV, and back to sleep (listened to iPod actually because I could not fall asleep).

8:00 AM, back to computer again, could not logged in because too many people trying to connect to CFAInstitute web site. After 15 minutes’ unsuccessful tries, I did logged in. The first page says “June 2008 Pass Rate
Level I Pass Rate: 35%”.

I know I could be right at the threshold. Why not make it 40% so that I could pass 🙂

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Beijing Olympics China

Weekend review w/e 072608

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A subdued Olympics rally?
The Olympics is coming. But we are not seeing much sign of an Olympics stock market rally, both in Shanghai, or in New York. The Shanghai composite index is barely above 52 week low, at around 2800 to 2900 range. Two of the Beijing 2008 Sponsors, China Mobile (NYSE: CHL) and Sohu (Nasdaq: SOHU), were not strong performers in the US market either. For instance, Sohu reported a strong 2Q 08 (transcript seekingalpha), but its stock is down today. I guess it’s just selling on the news, 11 days before the game?


(Theme song of Beijing 2008 Olympics)

What a week, Yahoo Tech-ticker

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Categories
Master Series

Boone Pickens’ plan

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His plan is basically use more wind for electricity power, free up the natural gas for transportation (automobiles). Currently natural gas cars are still not as versatile as gasoline cars. But I have seen and heard natural gas powered taxi in Shanghai, and gas powered bus in the States. Natural gas is more environmentally friendly compared to oil, but natural gas taxi has to carry a big gas bulb in the trunk, i.e., less trunk room for cars.

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IPO

Why CROX failed?

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By now it’s no secret that CROX stock failed. After it issued horrendous 2Q 08 preliminary results and full year guidance yesterday afternoon (refer to MarketWatch for more details). I don’t want to dive into the numbers and add salt to injury. I traded the stock last year until this Feb. when I realized it was time to sell. Besides my doubts on its financial and fashion, I could not understand why a company claims its success from logistics got “inventory” problem. For fashion retailers excessive inventory is a common problem but it’s also the worst. There are many factors account for the quick bust of CROX, some will argue those kinds of stocks always fail. Over the years I have seen Travel Zoo, OverStock, Hansen (drink), Jones Soda, Heelys. I think fundamental reason is that their business is not sustainable, because of its fickle fashion nature, or flawed business model.

Catalyst for the fall
The short sellers, esp. the naked short sellers. Short sellers have been bashing this baby since its IPO in early 2006. They have been losing money until Nov. 1 2007 when CROX 3Q 07 missed street expectation. After that it’s obvious there is not much risk, esp. considering SEC recently started banning naked shorting on Fannie/Freddie and 19 primary brokers. In other words, SEC was saying go naked shorting oil, coal, retailers,…we will not prosecute you.

How often do you mark to market?

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