Categories
Investing

Cummings CMI and my energy play

Reading Time: 2 minutes

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).

Continue reading “Cummings CMI and my energy play”
Categories
CFA

Margin of safety, retake CFA

Reading Time: 2 minutes

CFA test did not turn out the result I liked to see. I thought about the reasons, besides the unlucky factor (my score right around the pass/fail line), I attribute the main reason to myself: I did not work hard enough, and my financial knowledge is not good enough. Imagine if I could make more than 70% in all the sections, I would not rely on someone’s mercy on passing the test. Thinking along those lines, I decided to not to challenge the result (in CFA exam rule, one can pay $100 to get it re-scored). I will pay $480 to re-take the CFA level I this Dec.

Of course, the key for me is make sure this time I work hard, make sure I reallly understand all the materials, so that I would have sufficient margin of safety (not the razor thin margin of safety, or pure luck like the June test).

Buying stock with Margin of Safety in Mind
This reminds me Chapter 20 of Ben Graham “Intelligent Investor”, as Warren Buffett emphasized at this year annual shareholder meeting. By that, Ben/Warren meant buy a good stock at bargain price, so that in case something terrible go wrong, we can still sell the stock without a big loss.

Just for fun: my unlucky test experience in the US

Continue reading “Margin of safety, retake CFA”
Categories
CFA

June 08 CFA result

Reading Time: 3 minutes

IS out. I could not fall asleep this morning at 5:30 AM, 2.5 hrs before the official score release. Logged into the web, hope to see something, nothing there, watched some Bloomberg TV, and back to sleep (listened to iPod actually because I could not fall asleep).

8:00 AM, back to computer again, could not logged in because too many people trying to connect to CFAInstitute web site. After 15 minutes’ unsuccessful tries, I did logged in. The first page says “June 2008 Pass Rate
Level I Pass Rate: 35%”.

I know I could be right at the threshold. Why not make it 40% so that I could pass 🙂

Continue reading “June 08 CFA result”
Categories
Beijing Olympics China

Weekend review w/e 072608

Reading Time: < 1 minute

A subdued Olympics rally?
The Olympics is coming. But we are not seeing much sign of an Olympics stock market rally, both in Shanghai, or in New York. The Shanghai composite index is barely above 52 week low, at around 2800 to 2900 range. Two of the Beijing 2008 Sponsors, China Mobile (NYSE: CHL) and Sohu (Nasdaq: SOHU), were not strong performers in the US market either. For instance, Sohu reported a strong 2Q 08 (transcript seekingalpha), but its stock is down today. I guess it’s just selling on the news, 11 days before the game?


(Theme song of Beijing 2008 Olympics)

What a week, Yahoo Tech-ticker

Continue reading “Weekend review w/e 072608”
Categories
Master Series

Boone Pickens’ plan

Reading Time: < 1 minute

His plan is basically use more wind for electricity power, free up the natural gas for transportation (automobiles). Currently natural gas cars are still not as versatile as gasoline cars. But I have seen and heard natural gas powered taxi in Shanghai, and gas powered bus in the States. Natural gas is more environmentally friendly compared to oil, but natural gas taxi has to carry a big gas bulb in the trunk, i.e., less trunk room for cars.

Continue reading “Boone Pickens’ plan”
Categories
IPO

Why CROX failed?

Reading Time: 2 minutes

By now it’s no secret that CROX stock failed. After it issued horrendous 2Q 08 preliminary results and full year guidance yesterday afternoon (refer to MarketWatch for more details). I don’t want to dive into the numbers and add salt to injury. I traded the stock last year until this Feb. when I realized it was time to sell. Besides my doubts on its financial and fashion, I could not understand why a company claims its success from logistics got “inventory” problem. For fashion retailers excessive inventory is a common problem but it’s also the worst. There are many factors account for the quick bust of CROX, some will argue those kinds of stocks always fail. Over the years I have seen Travel Zoo, OverStock, Hansen (drink), Jones Soda, Heelys. I think fundamental reason is that their business is not sustainable, because of its fickle fashion nature, or flawed business model.

Catalyst for the fall
The short sellers, esp. the naked short sellers. Short sellers have been bashing this baby since its IPO in early 2006. They have been losing money until Nov. 1 2007 when CROX 3Q 07 missed street expectation. After that it’s obvious there is not much risk, esp. considering SEC recently started banning naked shorting on Fannie/Freddie and 19 primary brokers. In other words, SEC was saying go naked shorting oil, coal, retailers,…we will not prosecute you.

How often do you mark to market?

Continue reading “Why CROX failed?”
Categories
earning

Syngenta reports 1H 08 results

Reading Time: < 1 minute

Syngenta logo

Highlights
From its IR web site

  • Sales up 20 percent at constant exchange rates to $7.3 billion
  • Crop Protection sales up 21 percent(2) at $5.55 billion
  • Seeds sales up 15 percent(2) to $1.74 billion
  • Earnings per share(1) up 36 percent to $16.53
  • Earnings per share $15.93 after restructuring and impairment
  • Capacity expansion to meet longer term demand growth


    • Video
    CEO interview (cantos, free registrastion required, look for Syngenta).

    Continue reading “Syngenta reports 1H 08 results”
    Categories
    Stocks

    Analyze CHK hedging strategy: I

    Reading Time: 2 minutes

    Chesepeake Energy logo

    Chesapeake Energy (NYSE: CHK) is a stock I have known for a while. I traded it in year 2006, I did not hold it for long term partly because I usually don’t hold a stock for more than a year (until Mindray), more importantly I did not understand all the natural gas price volatility, CHK’s hedging strategy etc. Fast forward two years, the natural gas and CHK stock have been doing very well until last week, and I have studied the CFA a bit.

    Chesepeake is a natural gas (plus a bit oil) explorer and producer, it’s No. 2 US natural gas according to its investor presentation (click its July 16 presentation here). Natural gas is nothing new, it’s mainly being used in power generation, industrial and residential (heat) use. Exploring and producing natural gas is not a sexy thing either, except CHK claims it has the best geo-scientists and engineering team in the industry. The ultimate differentiator of CHK, compared to its peers, is its large hedging strategy. Using hedging, basically it tries to get a predetermined fair price of its product (natural gas), or in other words, it tries to get a fair profit from exploring and producing the natural gas. It lays out its hedging positions in its quarterly report, and it regularly put updates.

    How about its hedging results? Here are some articles I saw from seekingalpha.

    Article one, article two.

    Why hedging?

    Continue reading “Analyze CHK hedging strategy: I”
    Categories
    Master Series

    Steve Jobs, Apple, Bill Gates, Microsoft

    Reading Time: < 1 minute

    Background
    Couple days ago the Apple stock got a hit not just becaues of the soft earning guidance, the more important reason is the company declined to answer the health question of its co-founder and CEO Steve Jobs in the earning call.

    You tube videos
    Great Artists Steal – Triumph of the Nerds – Revised (very short)

    Continue reading “Steve Jobs, Apple, Bill Gates, Microsoft”
    Categories
    China earning

    Apple launches store in Beijing, earning

    Reading Time: 2 minutes

    Apple launched its first China store in Beijing last Saturday, with 2000 fans waiting outside, including some celebrity names such as Lu Yu (Phoenix TV), Cui Jian (China rock star) etc. You can see the scenes of Apple launch at Sina (Chinese), or preview pictures at David Feng. The Sina picture reminds me of the iPhone launch here in the US, a mob scene 🙂

    The cult culture
    Over the years Apple has this cult like culture among its fans. Looking at site such as MacRumors you will get an idea. While I think Apple products are generally very good, I don’t like their prices. It seems they are going to lower their prices, as they are expanding their market. This is a delicate problem for Apple because people usually got wooed to Apple because of its unique design, cool brand, and thus get the “being cool” status from friends. Now if Apple is everywhere, like iPod did, it loses that status. But Apple is going to pursue this route anyway, under the pressure from Wall Street. This can be shown in its earning forecast for next quarter.

    Earning

    Continue reading “Apple launches store in Beijing, earning”