Category: Stocks

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Stocks

Not All Debt are Equal

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Debt is bad. This is what I was told when I grew up in China. I think this is most of my parents generation feel about debt, I am talking about average working people, not the entreprenurs such as Lu Guanqiu, the founder of Zhejiang Wanxiang Group. So when I told my parents I bought a house and got a 15 years loan, their first response was “you will be (my current age+15) years old when you pay off the house”.

We borrow for different reasons. Some are good, some are bad. Buying a house is a good one in general, because it usually has some tax benifits (mortgage interest deduction). Also if we could borrow at a lower rate, invest it and earn at a higher rate, that is also good. We should note one thing though: the cash flow issue, we should have enough regular income to cover the monthly payments for house, food, gas and credit cards, etc.

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China Stocks

Focus Media FMCN is on the Focus

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It will report the earnings after market today. The Street est. earning is $0.62, but I think the whisper number is much higher. In other words, even if it beats the earning, if it issues a soft guidance, the stock may get punished tomorrow. This is the danger of  “playing ERs” with hot stocks. Interestingly, Sage Brennen has this question regarding “does this screen work”. Actually I had same question before, one of the reasons I did not buy FMCN.

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Business Stocks

Apple Leaves Table Smiling

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Apple and Cisco settled the dispute around the iPhone trademark, according to Mac News. One interesting comment I can not stop laughing is: 

“if Apple leaves the table smiling, you better check your wallet.”

Seriously, I agree with the author Cisco guys are smart too. “Consumers are so with Apple these days, it would have been bad for Cisco, because consumers don’t want to see a company that’s going against Apple.”

I want to note that Cisco is going after the consumer markets these days. As you may noticed from the TV ads and Scientific Atlanta (TV setbox) acquisition.

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Stocks

How Did I Find Growth Stocks

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New Oriental (EDU, based in Beijing): every Chinese student came to US for study knows that, no need to say anymore. 

Home Inns (Rujia, HMIN, based in Shanghai): my friend in my hometown told me about this in summer 2004. He is a small business owner and he thinks that Rujia is clean and economical. He would stay there when he visits Shanghai as long as he does not see his foreign clients. I believe business travallers make up more than 50% of Rujia’s business.

Mindray (MR, based in Shenzhen): found out shortly after its IPO. I always liked medical device makers, both from investment and health/science point of view. The barrier of entry is high: unlike English (or IT) training, you put ad on newspaper, hire some English teacher and find students and a classroom, you are good to go. For medical device, you will need R&D talents (hint: graduates from HUST), good sales and customer support, all of which you can not get overnight. The risk: lawsuits, regulatory procedures.

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Stocks

E-File Tax for Free

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From Yahoo, this is the link, by Dory Devlin:

My take on this: if your tax situation is straightford, go ahead and use the free software. But on the other hand, if you buy and sell stocks, have a home business, changed jobs or moved last year,…you will be better off use the paid version. Another catch is the AGI (adjust gross income) requirement (less than $52,000).

(Update 22Feb07) I got my state tax refund today (filed by mail about about 10 days ago). I used Turbo Tax for federal (got 15% off through ADP) and it took about the same time to get refund. Prepare your tax early, even if you need to send in check (you can always hold it by mid April).

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Fun Stocks

Crocs Earning Call

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I listened to Crocs earning call this evening. The numbers look good, it beats the Street expecation as I expected. They also raised Q1 2007 and 2007 full year guidance. Some of the interesting developments:

1) Nascar cross licensing (cross sell). Since they started Disney relationship in summer 2006, they expanded to NFL, NCAA football, NHL (looking for Canada market).

2) International: UK did very well, european is the main growth driver now; build up in Brazil now, expect good growth there (products match Brazilian life style well); China and India (may be significant in 2008). Disney relationship expanded from US to many international markets.

3) New shoes and aquisitions. Less dependent on the Beach and Cayman shoes.

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Fun Stocks

It’s OK to Leave Some Money On the Table

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I am not talking about the tips in the restaurants; I am talking about the stocks going up after we sell them, doesn’t that happen all the time? Just like it goes down after we bought it? My most recent example is New Oriental (EDU, it seems to me the traders did not take too much time off for the Lunar New Year). And it happened to my friends in China too. The friend was very upset when he told me the story. It seems to us sometimes “not making all the money” feels worse than “losing money”. For instance, if a stock falls after we bought it and we sold it because it never went back the level is was, i.e., we were “under water” the whole time, we may not feel that bad. But on the other hand, if it went up big and we missed the potential big profit, we will feel mad at us 🙂

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Stocks

Crocs Knockoffs

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There are lots of Crocs Knockoffs on the market these days. I found some on Payless and Target. The price is about half as the real ones. Don’t know the quality and the customer wearing experience though.

Also, I found this CrocFan blog. I added the link under “Blogroll” at the right. And this article on seekingalpha is very bullish for the long term.

Crocs (CROX) is going to report Q4 and full year 2006 results tomorrow. The stock already  moved up last Friday, in anticipation of a blow out quarter and a positive 2007 guidance.

Disclosure: I am long on CROX.    

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Stocks

Sell Used Books on Half and Amazon

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I used to sell used books, mostly textbooks on Half.com, an eBay subsidirary. Half does a decent job for me and their commission is reasonable (about 10%?). But I have not enjoyed much success selling books there lately. It could be one of the two reasons: My books are unpopular; Half.com is not popular anymore.

I started to use Amazon Markplace instead. Its commisson is much higher, theSunsFinancialDiary says its commisson for book is as high as 18%. But I am OK with it as long as it sells. My rationale behind this is: book does not increase value as time goes, as matter of fact a textbook loses most of its value when new edition come out; if I don’t read the book for a year, I probablly won’t read it at all, so why not convert that into cash? Same thing can be said for some unused household items.  

On business side, Amazon increasingly looks like a mall (like eBay), instead of a store (like Wal-Mart). Smart move I think.

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Stocks

Be Open Minded

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I think one of the most important take away from Ken Fisher’s book is “be open minded”. This is easily said than done. Because our brain is not trained that way. For instance, we usually felt pretty bad when we have to cut a loss after buying a stock, even if the company’s fundamental is deteriorating. Because we think if we don’t sell, it’s not an actual loss. On the other hand, we usually feel equally bad about ourselves when we saw the stock went up after we sold it, even if we already make profit from the sale. It seems to me we just can not tolerate “we lose money”, “we leave some money on the table”, “somebody else make more money than us”.

This is very similar to things in life, suppose you bought a Toyota Camry at a dealer for 20,000, and your buddy Joe bought the exact same car at exact same dealer for 19,500. Are you happy or not? Don’t tell me your are happy. How about I tell you I bought it the same car for 20,500 last month? Do you feel better?  

Sometimes, we should adjust our mindset to “making money together”, or “as long as we make/save money, we are happy”.