Category: Investing

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Investing

A good Chinese article on Value Investing

Reading Time: < 1 minute

Buffett is in the news again yesterday. This time he is playing sidekick (financing) to help Mars to buy Wrigley (NYSE:WWY), the chewing gum company. One interesting Buffett comment I heard from CNBC is “I have doing taste testing of the Wrightly gum for 70 years”.

Fun aside, Buffett and value investing have also been very popular in China in recent years, thanks to the boom/bust of Chinese stock market. There are tons of books on Buffett and his investing strategy, either translated from English, or written by someone who really does not know value investing. I saw a guy (who admires Buffett and claims to be value investor) talked about how great PetroChina is, and encourage small investors to buy at CCTV-2. Now we all know how PetroChina (NYSE:PTR) A share (601857) did.

But I found this one (written by Jingzhou Lawyer, 锦州律师) to be different. I found he has a very good understanding of value investing, much better than many pros in China. So let me quote some:

任何人价值投资的理念是一个三合一的系统。缺少了任何一项都不是真正的价值投资。 价值投资就是：选择强势公司的股，以便宜的价格买入，不轻易交易。

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Investing

Multi-dimensional investing

Reading Time: 2 minutes

It’s the NBA playoffs season again, and I watched the two games between Phoenix Sun and San Antonio Spur lately. As you may know, I am a big fan of Phoenix Sun/Nash. But they disappointed me again this year: they lost 2 games in a row. The main reason is that Phoenix is pretty much a one-dimensional team: a fast tempo, “Nash passing, Stoudemire dunk” team. After the Spurs sealed the ball from Nash to Stoudemire, Suns lost its touch. I did not see meaningful contributions from other key players (Diaw, Barbosa, Bell), and Shaq is just a bit too old. So what’s my point? In the NBA, the team with the best balance of offense and defense wins (if we exclude referee, luck factor). A team can not win the championship simply by one strategy, one super star,…they need the supporting cast, the defense as well as offense.

Back to the investing. Yesterday we saw a huge disppointment from Starbucks (Nasdaq:SBUX) earning report. It says “it experienced the worst consumer enviroment”.

starbucks coffee cup size pic
(picture souce: will work for food)

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401k and Personal Finance Investing

Close AMZN puts, Portfolio update

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I closed the Amazon Feb $65 puts last Wed, when I saw the stock dropped to around $68, which is the low point the day after it released Q4 earning.

Lesson learned:
1) short/put a stock is much harder than I thought. I started this trade because I saw EDU, AAPL, and VMW all dropped big after missing earning. But I have hind-sight bias on them: things are always clearer on rear view mirror. I did not know EDU will issue a so-so guidance for this Q; I did not know iPod suddenly stopped growth, iPhone did not sell as fast as Steve wanted, and Mac computers are expensive considering consumer slow down.

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Investing

I bought AMZN puts

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This is my very first option buy. After I “buy to open” on this $65 put, I don’t know how to realize the gain, if any. So I called the broker and asked for help online, both came back with answer “sell to close”. That made me more re-assured. The option terminology can make one head spin (I am sure my wife is in that camp), here is some introductions on investopedia.

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Investing IPO

Forgot to buy VMW puts

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I thought about it early Jan. after reading from San Jose Mercury News that VMW is the No. 4 software company, in terms of market capital (about $30 b as of yesterday). But I put down the earning date (Jan 28) on my Google Calendar (not Yahoo), and it did not send out reminder email as Yahoo does. So I missed buying the puts before earning. Interestingly, here is today’s price change of the puts options for VMW (expires Feb):

$60: $0.85 => $7.30 (up $6.45, or 759%)
$65: $1.40 => $11.00 (up $9.60, or 686%)
$70: $2.65 => $15.80 (up $13.15, or 496%)
$75: $4.30 => $20.60 (up $16.30, or 379%)

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