Category: Stocks

MBA is a hot topic for many overseas Chinese students and professionals: for the money or the dream. I have thought about doing this from time to time, but I am still at ground zero due to reasons such as: lack of the money and time; not sure about the purpose of the MBA; don’t want to follow the crowd; etc.

I read the following article from a well known overseas Chinese web site. And thought it is a good one. Maybe some day I will go for a MBA if I could find a compelling reason to do so. Here is the link of the article. Note I don’t necessarily agree everything the author says.

In the stock market there is a thing called “earning”, basically it’s how much money a company made for each share of the stock. The higher the earning, the better for share holders (company owners). But the stock price does not necessarily hold a linear relationship with the earning. Why? Because there is another thing called “street estimate” or “estimated earning”. It’s the Wall Street’s expectation of company’s earning. If the company’s actual earning meets (or beats) “street estimate”, the stock will go higher; otherwise the stock will be punished. The latest example is Google. It dropped sharply after the 2006 Q1 earning report.

I think same rule can applied to the work place. I got this idea partially from Jack Welch’s (former CEO of General Electric) book “Winning”. Recently I reinforced this idea from my own experience and observations. In the work place there are expectations from the boss, the coworkers and (sometimes) customers. If we just work hard enough to meet the expectation, we will keep the job. But if we work much harder or smarter, and make our bosses looking good, we will get reward or promotion. On the other hand, if we miss the expectation from our boss without a good explaination, we know what will happen.

Just watched Frontline on PBS. The topic is “Secret history of the credit card”. I thought it provides some very useful information. We all know the US economy is very much depependent on consumer spending. And the credit cards are used more and more by consumers. I remember a story my “American mom” told me. When her own kids were little and they asked their mom for something, they thought everything can be bought with that “magic plastic card”. Personally I applied and received my first credit card shortly after I attended the graduate school in Rolla. I had been through “low interest” balance transfers and paid interest on those loans from time to time. Other than that I do pay off my monthly balance regularly. But I did notice I tend to spend more freely with the credit cards, e.g., recently I spent quite a bit on the espresso at Borders, Panera Bread and Star Bucks. Another reason I use credit card is some of them offer cash bonus for purchase on gas, geocery, etc. I don’t consider myself a “very profitable customer” for the credit card companies.

Until today I have not connectted the dot of two things: consumer spending and credit card usage. It worries me more is China is catching up with the consumerism rather quickly. Last summer I went back to Shanghai and saw increasing acceptance of credit cards. I even used my US credit card to book vacation on Ctrip. It’s convenient but later on I saw there is a 1% charge for using outside the US. A friend from Shanghai used credit card for his US trip too. I can see the convenience here because he is on business trip.

Just for the fun: I found out if I pay the minimum monthly payment on my “low interest” balance on my credit card, it will take 54 months (4 and a half years) to pay off. Now I have more desire to pay off that loan more aggressively.