Category: Stocks

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Fun Stocks

My investing journey III: 2004 to 2005

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After I got some moderate success on OPSW and GE in early 2004. I got a bit excited.

If I could use one word to summerize what I did my acitivies on stocks in those two years, it’s speculation. I did all kinds of speculations, luckily I did not get into really dangerous zone: margin, short and options. So my loss is still limited (a few thousand dollars each year). I did the following speculations:

1) Bet on earning: from PALM, Redhat (RHT), NetEase (NTES) to more speculative plays such as Look Smart (LOOK), the9 (NCTY), I never made a dime on betting ERs. The common scenario is I bought them right before the earning. The stock price already reflected best case scenario. Even if the company came out with a blow out (good) earning, there wouldn’t be much upside. But in reality 100% of time they did not beat the estimate by wide margin. So…I had to sell the stocks after earning to limit my loss.

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Stocks

Speculation day for Chinese stocks

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On Sept 20, 2007

ATV: up 20.10%

EFUT: up 49.92%

XFML: up 20.70%

It seems to me the domestic investors (or speculators to be precise) can not wait the Chinese goverment offically opens the H shares to domestic investors, they already came to the US 🙂

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China Stocks

Wuxi Pharma Beijing Bank

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I sold Wuxi Pharma Tech (WX) this morning, at $28.81. Not surprisingly the stock continued up after I sold it. I bought it a month ago at $21.80 so I’m happy. The stock is a bit expensive at current price ($30), considering its PE (about 100), profit margin, and its 2007 est. revenue. Another thing to consider is competition. It’s definitely more difficult than open economy hotels (Home Inns, HMIN), but I think it’s still doable (exp. and connections with big pharmas in the west).

Separately, Beijing Bank did IPO today in Shanghai, under tick symbol 601169. It started at 23.00, went as high as 25, and closed at 22.68. At current price, its year 2007 PE is more than 50. Crazy!

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Stocks

Heelys one month after crash

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I normally don’t participating in stock discussion forums. But this one titled “company and stock did not connect” at Google Finance caught my attention a month ago. So I went ahead and commented:

Original comment: why is the good performance of the company disconnected from the horrible performance of the stock? When a company is more profitable than its previous quarter in the previous year, the company is more valuable. Anyone have any ideas?

My comment on Aug 16: The problem with Heelys is its prospect. In stock we not only look at its past, more importantly, we look at its future. With Heelys, the future is not clear (at best), not so good (in reality).

The inventory issue is not isolate problem. Their sales people may have pushed too agressively with the retailers for the “back to school” season. Now their typical strong Xmas sales is at risk.

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China Stocks

Secular growth, Mindray, New Oriental

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I was looking for a secular growth stock in China. By secular growth I mean the business grows continously without the normal business cycle. One benifit of secular growth is it usually does not go up or down a lot as economy cycle does. A side benifit of this is we (investors) can sleep better in the night 🙂

The opposite of “secular” is “cyclical”. For example, we normal think the following industries are “cyclical”:

1) Oil, metals and other commodities;

2) Real estate (we have seen the downturn in the US housing market lately);

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Fun Stocks

Landlord change and a Haigui blog

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The apartment we rent has experienced ownership change. The current owner can not resist the offer given by new owner (more than 15,000 Yuan per sqr meter), and she sold it. The apartment is about 20 years old, and near Zhongshan park. From my observations newer apartments (5 or 6 years old) in the area can easily fetch 20,000 Yuan. This is the status of Shanghai housing market. Hot, very very hot.

I also found an interesting blog written by a Haigui (I believe). This is westernford at blogbus. I like some of the pictures and words there.

Finanlly I am reading something not about finance, stocks,…

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Stocks

Charlie Munger

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Charlie Munger is the Vice chairman of Berkshire Hathway, and chairman of West Co. Financial. He has background in law, real estate, and investing. I found his recent Q&A on the West Co. Financial’s annual stock holder meeting to be interesting.

Here is the Chinese excerpt translation by Deng Hang; and here is the original PDF file in English, it’s 22 pages long.

BTW, the Q&A is not just about finance and stocks. It talked other things in life too.

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China Stocks

One dollar is 7.50 Yuan

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Week in review 09/09 to 09/15

1) One dollar is 7.50 Yuan. This is the rate I got from China Construction Bank ATM today, using my BoA debit card.

2) The China People’s Bank raised interest rate (by 0.27%) again in the weekend.

3) Moon cake coupon: there are many “moon cake coupon” flippers these days, as mid-autumn festival is approaching. Basically they buy the moon cake coupon from people who got it from Danwei, and resell it to make a profit. The catch is most moon cake coupons will expire on Sept. 25, just like the stock options expires on the 3rd Friday of each month in the US market 🙂

4) Lots of books about stocks, investing in the book store: from Warren Buffett to Peter Lynch, and many “experts” I never heard of.

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China Stocks

Valuation of China A shares: raw materials

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Chinese stocks are becoming more and more expensive. From different statistics, average PE of the market is in 40s. This is not cheap compared to around PE 18 of US S&P 500. There are many reasons for that, and I’m not jumping into it. But I want to share an interesting phenomena here: these days the fund managers, and individual investors are looking for valuation safe haven, or in Chinese terms, 价值洼地.

What does that mean? Lately because some of the blue chips are so hot, they got PE of more than 50. For instance, Vanke (000002), is traded at 32 Yuan, the est. year 2007 earning is 0.60 Yuan, so the PE for 2007 is about 53. Note this is No. 1 weighted stock in Shenzhen Index (about 16%), and its market cap (more than 200 b Yuan, or $30 b) is more than top 4 US home builders combined. (Vanke is No. 1 builder in China and it has about 1% market share). China Merchants Bank (600036) has similar problems. By the way, I believe those are two best managed companies in China.

China merchants bank pic

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China Stocks

Ji Ming or Gu Ming?

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I remember seeing a book written by John Bogle (the founder of Vanguard) where he suggested “individual investors should buy mutual fund not stock”. I agree with some of his arguments, such as diversification. And I believe that’s also the fact in the US: where pension fund and university endowment fund invested in stocks, mostly through mutual funds. But I don’t agree with his conclusion.

Come back to China. Since the inception of Chinese stock market, invididual stock investors, or Gu Ming 股民 have been an important force. Some made money, more lost money in this process. New blood filled in when old guys got wiped out.

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