Category: Investing

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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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China earning Investing

Weekend review w/e 071908

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(What a week, Yahoo Tech-ticker, link)

China’s role in the Fannie/Freddie mess
As Fannie/Freddie crisis deepens, people find China in akward postion because China is the largest holder of 2F’s bonds: total $376.3 billion. I don’t know exactly how China got into this mess, but I think one reason is decision maker in China must think 2F bonds are safe because of US goverment implicit gurantee. At least the market thinks so because the rating agency S&P, Moody and Fitch all gave Fannie/Freddie top rating. But wait a minute, didn’t those rating agency give a pass to those toxic MBS and CDOs? One thing I am sure is the China 2F buyers’ job are still safe, because at least they did better than the guys bought Blackstone at IPO, bought Morgan Stanley at $50s couple months ago.

Financial companies using lots of oil?

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Investing Saint Louis

Why Fazoli is so crowded?

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(Update July 17) I went to Fazoli this evening to take some food home. Surprisingly there are many people again. Another sign average people are feeling the pinch in this recession.

(Original) Fazoli has been my favorite lunch places for a while. Recently it got more and more crowded during lunch time. This seems strange because in current economy recession, one would think people would bring their own lunches more and eat less outside. So, what’s the reason?

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Investing

Six years ago

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Recent market turmoil reminds me 6 years ago: Enron, WorldCom and Tyco scandals are all in the news. Even blue chip names like GE and Xerox have some corporate governance problems. GE gave excessive benifits to retired chairman Jack Welch, the benifits including Manhantan condo, free corporate jets, season tickets to Yankee baseball games etc. Xerox had to re-state its financial statements (I remember got this news from Chinese newspaper when I was in Shanghai, summer 2002). It seems the corporate bean counters can not get the numbers right. That’s when I started to invest in the US stock market (sharebuilder), although in very small amount.

Shortly after we got Sabane Oxly Act, which targets the corporate internal control and financial reporting (GAPP). I remember in dot com days all the internet companies used “pro formula” (non GAPP) to tell the fairy tales to the investors. April 2003, US invaded Iraq. The US stock market bottomed there, and took off until the recent sub prime debacle.

When will the current bear market bottom? I don’t know. But one thing I know is the market go down, and goes up…all the time, as said by famous fund manager Peter Lynch (Lynch’s take on market, mp3, 5 mins)

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Investing Shanghai Composite

Bottom fishing time?

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Yesterday was another brutal day in the Wall Street, or the Bay Street (Toronto), or SSE (Shanghai Securities Exchange). According to the number, the Dow is now officially in bear territory. General Motor (NYSE:GM), a Dow component and an American icon, hit 53 years low. It closed at $11.43. So, should we go bottom fishing?

I am not a market timer, nor do I like to predict the market trend. But I noticed another interesting article from my friend Wang Jianshuo’s blog: Stock Market Big Drop. Note Jianshuo is not into stock market, a rare type in Shanghai. In other words, when people like Jianshuo started to pay attention to the market, things are either really good or bad (noteworthy). So, the 1 million dollar question: should we go bottom fishing? My answer is be careful, because if we don’t we will catch some falling knives instead 🙁

Some ideas for bottom fishing

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Investing

Asset management in China: I

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When I say a mutual fund manager, what kind of personality (impression) appears in your mind? A guy or a lady in his/her 40s, with financial education, 10 years or more experience in investment field…

This is not the case in China. Due to the boom of China stock market in recent years, and the boom of the hedge fund, many experienced guys (like Danbin, more about Danbin later) started or joined hedge fund so that they could make more money. Here is a Chinese article titled “rookie fund managers in charge of trillons of Yuan, only 7 fund managers have more than 7 years experience in China mutual funds”. The following Chinese video below tells the same problem.

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Investing Shanghai Composite

Danbin on TV

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Dan Bin (但斌, blog) is the founder, CEO of Shenzhen based Eastern Bay Asset Management Co. He admires Buffett and is value minded, although I don’t agree with everything he says “such as buy China Ping’an blindly” (remembers me of Cramer). He was on Shanghai First CaiJing TV interview recently. The interview is in Chinese lasts about an hour, and the videos are in 2 parts.

Interview part 1:

财富人生：东方港湾资产管理 但斌_上(Use this link if embed player does not work)

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Investing

Cramer’s new tech

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I am not a big fan of Jim Cramer, and I watch his Mad Money show (CNBC) mostly for entertainment. But he recently comes out this new tech series, which is a kind interesting.

What is new tech?
According to Cramer’s definition, old tech means the traditional sillicon valley stocks: Apple, Cisco, Google are good examples. We all know old tech companies, solve problems for business and consumers. They make the business more effient (Cisco, Oracle), and make our lives more entertaining (iPod, iPhone). Cramer thinks, with the global energy, environment, and food problems we are facing, the New tech, which are mostly old industrial companies, are trying to solve those larger problems.

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Investing

Carl Icahn and activist investor movement

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Carl Icahn is again in the news. This time is about the Yahoo (Nasdaq:YHOO) shareholder proxy fight. Basically Carl bought a bunch Yahoo shares after the Microsoft deal fell through, and he is trying to remove the current Yahoo board, and make the sale to Microsoft. Intelligent observers may say did not Microsoft walked away already? What if MSFT do not take the bait? Well, I think Mr. Icahn has plan B when he has this in mind. If the MSFT deal do not work, and it looks like Google is neither interested nor in a position to buy the whole piece of Yahoo (anti trust issue), Carl can cut Yahoo in pieces and sell it to different companies. So for instance, sell Alibaba stake to eBay (I use this just as an example, not that I know eBay is interested in Alibaba), sell Yahoo Finance to Sina,…anyway you got the idea.

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Investing

Weekend thoughts w/e 051008

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Baidu, Google China
Keso wrote this Chinese article a while back Who is Google China’s opponent? He is talking about the difference between Baidu (Nasdaq:BIDU) and Google, and he thinks Baidu has created a brand and a series of products, and consequently built a moat to fend off Google and other competitors.

This is confirmed by gseeker baidu from readers series: “baidu” real estate, “baidu” fashion apparel, “baidu” KTV. Don’t know how Robin Li (Baidu CEO) feels about people using his company’s name? By the way, gseeker is the best blog about Google in China, in my mind.

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