stlplaceI was deeply disturbed by the torch incidents on Paris and London. I think the local authority should do a better job to protect the torch carriers.
Wheat, Rice
Couple weeks ago I noticed Panera raised its bagel price from 95 cents to $1.01, because of the sharp rise of wheat price. We all know bread flour is made from wheat. The wheat price has been up 50% in last 6 months, due to draught in key wheat producing country Australia. Interestingly Panera stock (PNRA) went up from last I look. I guess the ability to pass cost to customer is a signal of strength. We will continue to eat bagel for breakfast, and we can get the 6 cents from somewhere else 🙂
I went to buy rice yesterday and found the price is also up. I heard about the Thailand new policy to control rice export and price hike, so this is not a surprise. I also watched CCTV news that Premier Wen is visting rice producing provinces, to encourage farmers planting more rice.
Because I am long out of rice business, I have bought some Syngenta (SYT) to hedge the grain price (seriously, I hope to gain from the global ag boom).
Memphis tiger’s stunning loss
I was stunned to see Memphis lost the NCAA champaignship game last night. They were up about 10 points with 2 minutes left (story from CBSSports). Then they did something pretty stupid, something paper tiger would do: they pass on the balls to kill the time! One thing analysts liked to talk is “with 10 seonds left, Memphis let Kansas shot a 3 point and tied to overtime”.
Kiplinger is a personal finance magazine I have since year 2001. In its May 08 issue, I found “Tune out the seers” (Promised Land column) by Andrew Feinberg, in which he is saying everyone (especially experts) likes to predict the market and economy, but we should just ignore them. Or in the case of famous guys like George Soros, we could pay a little attention. But we still need to understand the logic behinds his conclusion, and do not let others opinion change our plan without our own homework. Quote John Kenneth Galbraith: there are two kinds of forecasters. Those who don’t know and those who don’t know that they don’t know. The article is not online yet, but I found Andrew’s another article Let Your Winners Run entertaining. Hope you have not listened him blindly if you bought AAPL shares last year 🙂
Barrons launches daily stock alert
I started to subscribe Barrons since this year, and enjoyed it so far. I always think Barrons (along with WSJ), probally is the best business (finance) newspaper in this country. But one thing I also notice is the business of newspaper is deteriating in the US very rapidly, WSJ and Barrons is no exception. Thus the buyout of Dow Jones (parent company of WSJ aand Barrons) by Murdoch last year.
As a part of rescuce effort, now Barrons is launching Daily Stock Alert. I have not signed up for it, because I think all stock picks newsletters make money by the newsletter subscriptions, not by their own portfolio performance. If a guy (or a lady) is really that good at picking stocks, why not buying those stocks in their portfolio, and make the money from it (which is Mr. Buffett did so successfully in last 50 years).
Oh, BTW, Mr. Buffett picks stocks by himself, not from Barrons or other newsletters 🙂
My wife used to joked with me: you always tout some stocks when you buy, then after it crashed, you will say it’s a crap (XFML, Heelys, LFT, Crocs).
I think I won’t say that for Mindray, and hopefully no hard feelings for BRK, either.
Sold Mindray MR
I sold my remaining Mindray (MR) shares just now, here are the reasons:
Mindray was doing OK up to this point. But I think it may have overpaid for the DataScope patient monitoring business. It paid 202 million, while the business has revenue of 162 m last year. The unit was not profitable according to one analyst, which I believe because I also did a little research myself. The cost structure of DataScope is higher than Mindray; the US medical device market is tough and will be tougher in the credit crisis. Note the hospitals usually need to borrow from banks to finance the new medical devices.
On other hand, at $31.88, the stock is not cheap (PE ttm of about 45). The company expects to grow revenue and earning by 40% this year.
Bought Berkshire BRK.B
I bought one share of Berkshire Hathaway (BRK.B) at $4349.89. This is Buffett’s company. If you have read my blog for a while, you know I have great respect for the Oracle of Omaha. Its main business (insurance) will be tough in the near term, but Warren has did some smart acquisitions lately (the Israel company, and a domestic diversified company, I could not remember the names but believe it or not, sometimes those unknown companies made a lot more real money than Crocs)…Although he scaled down the equity investing (relative to the big purchase mentioned above), he has continued to make money in stock market, notably the $3 billion profit from PetroChina last year.
Two important news about China wireless arena yesterday.
1) China Mobile finally started the long awaited trial of TD-SCDMA 3G network (read Chinese news story 1 , and 2 from XinhuaNet). Some features of 3G include the video conference/phone, TV program, etc.
2) The new (lower) roaming fees takes effect.
I think 2) may have slightly negative effect on CHL’s earning, while 1) is insignificant and we will not know the success of 3G/TD until 2009/10.
(Picture from XinhuaNet: people are lining up for 3G phones)
Valuation
(Update Apr 2) Another news to make myself feel better, Chinese A share mutual funds declined 22% on average (read this Chinese news from Money-Courier). For comparison, Shanghai Composite index dropped about 34%, from 5261.56 to 3472.71 in the period. Note that index is not a good benchmark index because it’s skewed by some big cap stocks such as PetroChina (601857.SS).
(Original Apr 1) I was a decent student in elementary school, but from time to time I did get bad grade in an exam. The tough part for me was getting the report to my mom 🙁
The most miserable quarter
I’m sure lots of money managers will share my “most miserable” comments. My little portfolio shrinked about 25.23% from Dec 31, 2007 to March 31, 2008. Thanks to my bone headed bets on LFT and CROX stocks. For comparison: “In the first quarter of 2008, the Dow fell 7.55% and the S&P 500 index lost 9.92%. The Nasdaq was by far the worst performer among major U.S. equity benchmarks in the first three months of the year, dropping 14.07%.” (source: Business Week). To make myself feel slightly better, note GOOG and AAPL dropped about 33% and 25% in the same time period, respectively.
Lesson learned
1) In early Jan. I told my wife I need to unload LFT and CROX, so that I can sleep well in the night. I finanally was able to pull the trigger on them (LFT in Jan and CROX in Feb). A bit too late (CROX went from 75 to 19 in 3 months). But I’m glad I fufilled my words to my wife on this one (see below what if).
2) Trading cost: 7*45 = 315, not significant, but still sizable. Looked at other discount brokers such as TradeKing, IB but have not decided to switch. I will reduce trading times and increase the size of trading (make more sure bets), to reduce the trading cost.
Good things
Finally I was able to get back to In value I trust. I also got back to more solid stocks such as CHL, RIMM, SYT. And I was able to take some profits when I saw opportunity (don’t want be a pig).
Let’s take a break from the bad economy and stock market news, from China to US. Today is MLB opening day, St. Louis Cardinals will face Colorado Rockies at Busch Stadium.
After living in St. Louis for more than 7 years (and in the show me state for more than 10), I started to appreciate the joy, the saddness,…Cardinals brings to the town. I believe St. Louis would not be as good without Cardinals: talking about the sports and the spirit of a city.
Go Cards, Pujos, Carpenter, Wainwright and La Russa…and best wishes to Edmonds, Rolen and Eckstein in the new home!
There are lots of talk about Chinese A shares market these days, both because of the big drop lately, and because of the in-action of the goverment. You can read the two Chinese articles (one supports inaction, another cries for goverment action), if you know Chinese. I don’t want to get into the debate of “moral hazard”, which is also a heated topic in the US right now. I am trying to explain why the Chinese A shares are still expensive, from value investing point of view.
Let me use two blue chip stocks as example, the 600030 (Citic Securities) and 600036 (China Merchants Bank). Both released 2007 results and declared the dividend. I rounded some of the numbers for simplicity (without distorting the results).
600030: dividend payout ratio (dividend/earning per share) 0.50/4.00 = 12.5%, the company pays 12.5% of the earnings to the shareholders, leave the rest for re-investing.
(source: www.iamgold.com)
Finally St. Louis gas price is exceeding $3 a gallon. Today marks the first day my gas bill exceeded $40 ($3.179 * 13.105 gallons = $41.66).
I am not complaining, as I know people around the world are paying a much higher price for gas, or paying a higher percentage of their disposal income for gas. But I still want to do something to contain the gas cost, before sending my pay check directly to the Exxon-Mobile and the likes.
1) In the past, I tried to fill up gas at the proper time: there are two gas stations near my home, whenever I saw one gas station raised the price (the other has not), I will rush to the other one (usually it’s the Shell).
2) Also, I used the gas rebate credit cards, they are Citi Dividend (5% rebate in the past, this has been changed lately); Chase Freedom (3% rebate); and AAA MBNA card (5% rebate subject to the up limit of 2% of the monthly balance).
3) Last week, I tried another approach. I paid pretty dollars for car maitenance: engine tune up (replace spark plug and wires); fuel injection cleaning; replace engine gasket. Hopefully my investment will pay off over time (from saving in gas).
It’s official, the Hangzhou Bay bridge, which connects Ningbo (my hometown) and Shanghai (to be more precise, connects Ci Xi to Jiang Xing 南起浙江宁波慈溪市，北至浙江嘉兴海盐县), will open on this May, according to Ningbo goverment offical. Chinese news from Xinhuanet here.
(source: sohu)
At this time this is the longest sea crossing bridge in the world (36 km, or 22.5 miles). A new Hangzhou Bay railway bridge is also under planning (Chinese).
Dream come true