Categories
Stocks

Cramer was wrong on BSC last week

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As you may know, the Bear Sterns (BSC) was bought by JP Morgan for $2 a share as of this afternoon March 16 US time (Reuter News). And here was Cramer’s take on Bear Sterns on Mad Money just last Tuesday (March 11).

Dear Jim: Should I be worried about Bear Stearns in terms of liquidity and get my money out of there? –Peter

Cramer says: “No! No! No! Bear Stearns is not in trouble. If anything, they’re more likely to be taken over. Don’t move your money from Bear.”

Yeah, the Bear IS in trouble and they are taken over, but at $2 (it may go slightly higher if another buyer emerges), it is virtually go under as far as shareholder concerned.

The following is a list of Investment services companies:

Investment services companies pic
(Source:Google Finance, Mar 14, 2008, full size pic is here)

Bottom line: if you have BSC stocks and listened to Cramer’s advice and hold it through last week. I felt very sorry for you 🙁

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Categories
Economy

Sub-prime credit crisis unfold

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sub prime loan pic
(source: www.stride.co.uk)

Last Monday was one year anniversary of sub-prime (and subsequent credit crisis), here is an interesting time line I found at BBC. Quote:

8 March (2007)
Biggest US house builder DR Horton warns of huge losses from sub-prime fall-out.

12 March (2007)
Shares in New Century Financial, one of the biggest sub-prime lenders in the US, were suspended amid fears it might be heading for bankruptcy. See the New Century entry at Wiki here.
…
A year later (lots of bad things happened in the past year):
…

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Categories
Life Tips

Green Card DIY

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I don’t mean to steal immigration lawyers’ business 🙂

A few years ago my employer sponsored my GC app including attorney services. But that did not extend to the AP and EAD (optional for me). I heard from a friend that he paid $1,000 lawyer fee for the EAD renewal. So I filled the forms and filed for myself.

Last month (mid Feb) as soon as I saw the PD became current, I filed I-485, I-131 (AP) and I-765 (EAD) for my wife (H-4). And we received the all the receipts shortly.

I think for simple cases (like my wife), we can do it ourselves, as long as we know what we are doing. This maybe more effcient than using the company lawyers, because of the time wasted on “back and forth”. On the other hand, I am sure most Chinese immigration lawyers here are professional and effcient.

Categories
China Stocks

Bear, liquidity, soft commodity

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Bear Stern (NYSE:BSC) spoiled the market today. There was some confusion about Citic Securities recent agreement. As far as I know, according to Bloomberg, there was a small stock swap deal and potential JV. But lately they are under a talk to revise the deal. So nothing like the China Invest Co. Blackstone IPO fiasco.

Liquidity in my little portfolio
Interestingly, I found when market is in panic selling, big name stocks such as China Mobile (CHL), Research in Motion (RIMM) usually got down, and small name stock such as GSI Technology (GSIT) did not go down too much, sometimes it even went up. How come small stock got the power to fight against the market? Well, the answer lies in liquidity. When the big guys got panic, and decided to sell, they will usually sell the Microsoft, the Google, the Pizer,…because those stocks are traded millions of shares a day, and they could find buyer easily, without too much discount. This is not the case for GSIT, which trades about 50,000 shares a day. It takes a few buyer for my 500 shares.

Soft Commodity

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Categories
Stocks

My accounting homework on MON and SYT

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The following was done a while ago. Why I have not followed it in last two years, and missed this great agri boom? Because I followed all the hypes: Home Inns, Heelys and Crocs 🙁

==========
Dec. 14, 2005

Dear Mr. John,
Both Monsanto and Sygentia are leaders in the agriculture business. Their financial fundamentals are solid. Both are profitable and have an R&D expense of about 10% of their annual sales. Since we are long term investors, we will look at the following ratios for year 2004 at first.

PE ratio: Monsanto’s 36.4 is significantly higher than Sygentia’s 6.3, which means the investors are more optimistic about Monsanto’s earning growth. We need to examine the expected growth is organic or will be materialize.

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Categories
China IPO

The economy of China Economy Hotel

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In his annual letter to shareholders, Buffett said the “party is over”. He was referring to the insurance business, which is the cornerstone of Berkshire Hathaway.

It appears the party for the economy hotels in China is over too. You can read this Chinese article at Sina if you know Chinese. This is understandable because as the leader of this pack, Home Inns (Rujia, HMIN) got listed in the US in Nov. 2006, lots of money has been poured into this hot sector in China, notably the 7daysInn (fund by warburg pincus), Hanting (found by Home Inns founder Ji Qi, raised $85 million fund last year, about the same size of Home Inns’ IPO proceeds).

Now they are paying the price of over-investment and fierce competition thereafter. Let me quote the Chinese article:

锦江之星的这家店位于吴中路和桂林路口，这里并不是上海人气最高的地段。但在不足4公里长的吴中路周边，却挤下了莫泰、7天连锁酒店、上海优家旅店、上海东湖之旅虹锦酒店等超过8家经济型酒店，其中汉庭竟然在同一区段拥有两家店面！

English translation: JinJiang star hotel is located at intersection of WuZhong Rd. and GuiLin Rd., which is not a hot district in Shanghai. But along this less than 4km WuZhong Rd., there are more than 8 economy hotels including motel168, 7daysInn etc., and HanTing even has two hotels in this district!

Jinjiang Inn at ChangNing Rd.
(JinJiang Inn at Shanghai ChangNing Rd., March 2007, full size pic here.)

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Categories
Master Series

See’s Candies, Balance Transfer and Turbo Tax

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A Chinese version of the story can be read here (thanks to Shanzi for translation). You can read story (in English) from Buffett’s 2007 annual shareholder letter.

See's Candies

Why do I emphasize this story? Too many times I fall into some growth stories (hint: next Microsoft or Google), value traps (hint: Heelys and maybe Crocs), etc. This story serves as a reminder to myself: business is about making money. Less capital, more earings (not paper earning but the free cash flow), means great business. I think this story also implies not to take unnecessary risks or leverage: the recent down fall of financial firms exactly confirmed that.

Balance transfer
Also, I found this balance transfer (0% for 12 months, no fees) to be attactive.
http://www.fatwallet.com/t/52/810638/

The Turbo Tax online versions
I have used it since year 2001 (tax filing for year 2000), and I liked the product. One feature I like is TurboTax kept all the filings for previous years. A minor thing: I am going to save some money without using the State filing from Turbo Tax, because the calculation of State tax is fairly straightforward in my case (once the federal is done).

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Categories
China

Mindray buys into US market

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Mindray (NYSE:MR) continued its US market expansion today, as it agreed to buy the Patient Monitoring business of DataScope (Nasdaq: DSCP) for $202 m (see this Reuters news). My gut feeling is this is a fair deal. Mindray paid about 1.25 times sales revenue for the unit. According to Reuters: “The (DataScope) unit had total revenues of $161.3 million in calendar year 2007, approximately the same as those generated from Mindray’s home China market.”

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Categories
Business

Greed: from Enron to Sub-prime fiasco

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(Update) I started this article a few months ago. Just as I complete it today, I heard the Elliot Spitzer’s scandal (possibly criminal prosecution) regarding his involvement in prostitution ring. How ironic. I hope people don’t discount Elliot’s relentless effort to clean up the Street, no matter what comes out of his case.

(Original) When the Enron scandal surfaced in Summer 2002, I just started to learn about US stock market. But I vaguely remember many other companies such as Worldcom, Tyco also exposed their problems later on. The CEOs of those companies are all prosecuted, and corporate governence of US companies are much improved since then. The congress scrambled to come up with the Sabane-Oxly Act, which helped to make the corporate accounting books more accurately reflect the reality of companies well-beings, and strengthen the investors confidence.

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Categories
gadgets

HiPhone and iPhone new SDK

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Did you hear about HiPhone? It’s a knockoff iPhone made in China, here is one I found through Google Product search. Since US consumers are in recession (as wisely pointed out by Buffett and Bill Gross lately), this is not a bad choice if a person wants to impress his/her friends but don’t have the kind of money to buy a real iPhone ($399) or sign up the AT&T plan (starting $59.99) . In this case, the HiPhone costs $240, and no plan is required.

HiPhone photo

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