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Investing

Discover Card

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Who is better positioned to weather the recession (or depression as some people like FT Martin Wolf said), American Express (NYSE: AXP) or Discover Financial Services (NYSE: DFS)? I got some DFS last week so my opinion maybe biased, but wait: I hold Berkshire Hathaway (BRK.B) which in turns holds significant number of AXP shares so I think I am ok here.

Fun aside, I think DFS is better positioned in this downturn because their consumer (like yours truely) continue to use them for daily stuff. On the other hand, American Express, which derives significant amount of revenue from high end consumers and business travel, has experienced and will continue to experience challenges in the near term. It’s about affordability or necessity.

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Categories
IPO

Mead Johnson going IPO

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I remember reading this last year, this morning I read it from Yahoo Finance. Here is the prospectus at SEC, and here is a glimpse at IPOHome. It looks like they are going to IPO on Feb 10 (from the roadshow, again from IPOHome).

enfamil infant formula pic

I think most people heard about their product enfamil (Amazon, Wiki), the infant formula, whether one has kids or not. For instance, I don’t have kids now, but I bought some enfamil for my friends back in China last year. On first glance, this is a good IPO. If they trade around the $21 to $24 range (the IPO price range), I may get some. In this recessionary environment, I think most parents still feed their infants with best formula (if possible). This is especially true back in China.

Mead Johnson was a division of Bristol Myers Squibb before this IPO. Some background about this spinoff from the deal. The company plans to pay 20 cents quartly dividend. Like the EMC/VMWare spinoff, the parent company is only selling a minority stake (12.5%, according to Reuters). I think this combined with current market condition, is the reasons why this IPO did not receive much attention lately.

Snapshot: offering 25 million shares, range $21 to $24, expected date week of Feb 9. Dividend (proposed): 80 cents per year.

Categories
Investing

Friends don’t let friends buy BAC

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(Update Feb 5) It appears BoA CEO Ken Lewis bought additional 200,000 BAC shares yesterday (source: bloomberg).

(Original Feb 4) Today Bank of America stock (NYSE: BAC) fell below $5 the first time since 1990s. The company was in trouble earlier this month as the loss from Merrill Lynch turned out to be much bigger then originally thought. There are lots of talk about the potential nationalization, as the rumor also hit another big troubled bank, Citi group (NYSE: C). Some retail investors got excited about the “appears cheap” price, and they bought into the stock and hoped for a big profit in near future.

Don’t !!! Although the insiders of BoA, including its CEO Ken Lewis, bought a bunch of stocks on Jan 20 when the stock dropped under $6 briefly (and around the same time, JP Morgan CEO Jemy Dimon bought JPM stocks), the insider buy looked more like the “confidence showing stock buyback” nowadays. Note in the good old days, companies bought back stocks because they felt the stocks are really cheap. Nowadays many companies bought back stocks to prop up stock price, or to offset the excessive stock awards to its employees. This “Ken Lewis” smelled more like a show to me, just like the Obama’s blaming Wall Street excessive bonus (before he hand out another round of carrots to banks soon).

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Categories
Life Tips

Join Club Fitness

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What is the best investment one can make in 2009? Invest in yourself: health, family, financial knowledge, job skills, business skills,…among all I think health is the most important because without it everything else will get hit or become less meaningful.

club fitness pic

Amid growing belly I decided to do something about it this year. I used to have access to treadmill when I was living in apartment and working for my previous employer. Now I work from home, I need to find a fitness center. Not that I can not walk/jog outside, but you know the winter and summer in St. Louis are not that friendly. I asked the people at Fitness Edge (who does personal training), and they told me about Club Fitness. So I went there right away last Friday afternoon. They have 2 monthly plans: $14.95 and $19.95. I picked the latter plan because it gives more access in terms of time and locations, and it’s still under the reimbursement limit of my current employer fitness benefit. I have been to the facility a few times, and the only complaint I have now is it’s getting crowded in the evening (5 PM).

Interestingly, I thought about a pedometer would also do the job, and now pedometer app for iPhone are available on the iPhone App store (iTune store), such as this one.

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Categories
Stocks

Blackberry everywhere

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Since I have done some travel lately, I have oppertunity to see people in the airport or airplane. It seems to me Blackberry is everywhere. I remember Blackberry was popular a few years ago (also from airport impression), now it’s pervasive / everywhere. There are lots of coverage on Blackberry recently such as: 1) Obama does not want to give up his Blackberry; 2) The Blackberry Storm, first touch screen blackberry launched by Verizon wireless, although sold about 500,000 units in its first month, received mixed review from consumers (the bugs). Of course, I noticed people checking on emails and looked like they are VIPs, which reminded me the default signiture line of Blackberry email: sent from my wireless device. Interestingly, iPhone copied this idea and has this “sent from my iphone” line.

But I see one problem in the Blackberry revolution. Last week my Blackberry browser stopped working. I did some online search and found that Blackberry has 4 browsers (source: crackberry). Isn’t this insane?

One thing Yahoo Mail beats GMail
I have been using GMail for quite some time (since 2004), but I have not switched to GMail yet. GMail has some nice features such as group email threads, and integration with Google talk. But I found one more feature I liked about Yahoo Mail lately: the full header feature. It tells me all the information about sender, the path, etc. This feature alone helped me solve a mystery of return path (address) lately. So go Yahoo !!!

Categories
CFA

CFA level I Dec exam result

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This morning, 9:05 AM, CFA Institute web page is again hit hard: I mean all the people are trying to log in and see the results of CFA level I exam last Dec. After about I waited 25 minutes, just before I entering the customer meeting room, I am seeing passing rate: 35%. This is similar to the June passing rate (35%). After I entered the meeting room, entered the user name and password again, and here is the result.

Level 1: Pass
……

Cool. But the customer meeting started right away, so I have to withhold my feelings. Compared to the June results, I did better on “Financial Reporting & Analysis”, but worse on “Ethical & Professional Standards”.

Here are the details.

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Categories
Life Tips

New Year and Hotel frequent guest programs

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Happy New Year!!! The Chinese New Year of ox, or bull (or cow). If you missed making new years resolution on Jan 1, this is another time to make up.

Gong Xi Fa Cai

Hotel Frequent Guest Program
Like Airline frequent flyer programs, there are hotel frequent guest programs. And I joined two lately: Hilton HHonors and Mirriott Rewards. There are some tangible benefits to those programs, such as getting the points for the hotel stay and redeem them sometime later. One thing I noticed interesting, at least something I was not aware of, is that hotels sometimes assign better rooms to its frequent guests.

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Categories
Master Series

Buffett on NBR (PBS)

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Berkshire Hathaway (NYSE: BRK.A; BRK.B) has not done well lately. Nonetheless, Nightly Business Report (PBS) interviewed Buffett. The topic ranges from new administration, recession and investing. The interview is about 30 minutes long.

Interestingly Susie Gharib tried to ask particular investment advice, Buffett declined politely.

Categories
Stocks

Banking crisis?

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It seems the financial crisis has been more like a banking crisis these days, with the RBS virtually nationalized by the British goverment, and Citi and Bank of America increasingly can not stand on its own. The No. 1 and No. 2 US banks according to market cap, J.P.Morgan (NYSE: JPM) and Wells Fargo (NYSE: WFC), are also under pressure today, both hovering around $20 and $15, respectively.

RBS telegraph uk
(Source: telegraph.co.uk)

Of course this all happens today as the new US president sworn into office. It appears to me the market does not like the stimulus package proposed by Obama team, or the uncertainty around it? Plus the controversy around his treasury secratery pick. All this bring uncertainty to the market, and we know the market does not like uncertainty.

What will we go from here? Will all the big US banks taken over by the federal goverment? It seems unlikely because this country lives or dies on the private business or entreprenuership. With goverment controlling large banks, it will be like (dare I say) China.

Categories
Stocks

My thoughts on Bank of America (NYSE: BAC)

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Bank of America is back in the news because they asked and got $20 billon from US govement, to back the loss from Merrill Lynch acquisition.


(Source: Yahoo Tech-ticker)

Personally I like Bank of America, ever since I became their customer serveral years ago. Two benefits of being BoA checking acct cosumer: 1) Their branch and ATMs are all over the country; 2) In addition to that, since I travel to China once a while, I like the fact I can withdrawl Chinese Yuan (RMB) from China Construciton Bank (CCB is BoA Chinese partner), without transaction fees. CCB is also a large bank in China and their ATMs can be found in many places.

Now to the investing of BoA (NYSE: BAC). Did I say investing? With the stock price of BoA approach to $7, it seems to me it’s more and more like speculating. I remember someone (Jim Cramer?) once said any bank stock traded under $5 is speculative.

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