The following is a one-year chart of Berkshire Hathaway (B share).
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In Berkshire we trust?
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Home Inns (HMIN) is raising fund through convertible bond (up to) $149 m (reuters news). It seems they still need the cash to expand.
Longtop got more analyst converge: Deutsche bank and Jefferies initiated with Buy with target price of $30 and $29, respectively. Quoted here:
Deutsche Bank initiates coverage on Longtop Financial Technologies (NYSE: LFT) with a Buy rating, setting a $30 price target, citing a great position within its quickly growing industry, unique barriers to entry and impressive operating results…
Jefferies initiated Longtop Financial (NYSE:LFT) with a Buy rating and $29 target, as they expect strong earnings growth over the next several years from an acceleration in P&L performance and the company’s attractive secular demand backdrop.
(image from thestockmasters.com)
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Durable competitive edge
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Buffett talks about “durable competitive edge” a lot.
Here is a video (scroll down the article) he used Berkshire mill, the first major company he bought in 19060s, as an example to explain this concept.
Also I watched the “Buffett goes global” show on CNBC in the weekend, I am sure CNBC will run it again just like the other two shows about Walmart and eBay.
This is a much better show than Jim Cramer’s Mad Money, in terms of education value. I watched the Mad Money mostly for entertainment, along with Fast Money, etc.
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According to Chinatimes.cc (Shui Pi),
上证指数自10月16日创出历史新高6124点之后已经连续下跌30天，下跌1346点，跌幅达到20%，市值的损失高达5万亿左右，相当于这一轮牛市启动之前中国股市的整个市值，不夸张地说，是蒸发了一个传统股市。按照跌幅超过25%可以视作牛熊转换的理论来看，这样的调整即便不能算崩盘，至少也是大起大落的一种表现，更何况根据媒体的统计，从2006年11月至今，投资者亏损面已经达到70%以上，挣钱的不足25%。
……
一个和谐社会是离不开一个和谐的股市的，要把胡锦涛总书记“创造条件让更多的群众拥有财产性收入”的讲话精神落到实处同样需要一个充满着阳光和希望的股市。投资者要有风险意识，管理层又何尝不是如此呢？
Seriously, harmonious or not, I do not think there is a stock market in which more than 50% of the participants making money. To be more realistic, I think 30% make money, 70% lose money is common in stock markets, especially in short term (say one year time frame as shown above).
On the other hand, I do believe investing in 401k (say, buy and hold index funds for 25 years) will mostly likely bear fruits for investors. As one can see this is totally different from the “make fast money” mindset for majority of the stock traders in China, including many mutal fund managers 🙂
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Investing with Bolton
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Screen shot Capital Week published on Dec. 1, 2007
Anthony Bolton is the legendary fund manager for Fidelity (the mutual fund company Peter Lynch made his name). He visited China lately and answered investing questions from reporter of Capital Weekly.
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First a little background. Longtop did its high profile IPO on Oct. 24, a short month ago at NYSE (think how much market sentiment has changed since then). As the first Chinese software company listed in NYSE, Longtop is in the sweet spot in terms of the customers they serve: the Chinese banks. Chinese banks, both the big 4 and the (smaller) city commercial banks, have lots of money to spend lately, after raising tons of cash through IPO in recent years.
On the serious side, the banks do need to improve the workflow and upgrade their IT system, so that their customers don’t have to wait one hour for over the counter service, or wait half an hour for ATM machine. The banks are also targeting the newly minted middle class for personal banking, credit card and other services. After all, it IS a competitive environment. China opened up RMB services to foreign banks early this year. If people can not get the services at domestic banks, they may go to foreign banks.
Here are two common questions for Longtop.
1) The usage of the IPO proceeds.
According to its F1 prospectus, the company plan to use the net proceeds of this offering as follows:
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Smart buyback, iPhone China delayed
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Week in progress 11/25 to 12/01/07
1) Panera to buy back up to USD 75 millions (worth) of shares from a broker (see the news here). The is in contrast to Crocs panic buy back announced on Nov. 1, amid the sharp fall of its stock price after it announced Q3 result. Last I looked at its 10Q at SEC: “On November 7, 2007, the Company repurchased approximately 524,000 shares for a total of approximately $25.0 million”. That is $47.70 per share (currently CROX traded just under $40). Good shoes maker, not so good stock traders?
2) iPhone delayed in China. The main problem is Apple and China Mobile can not agree on the how big a pie each will get, according to NanFangdaily (Chinese). American expatriate entrepreneur (in Beijing) Billsdue predicted the outcome before hand.
3) J. Crew reported a good quarter. Here is a link to its conference call (webcast). I found its CEO Millard Drexler had good insights about fashion and fashion business.
4) China Ping An Insurance (sh601318) paid 1.3 b Euro for 4% stake in Fortis, a Belgo-Dutch financial group.
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Shanghai housing market
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I read some interesting Chinese posts from soufun today. I just put the links here: thought we may get a better picture of Shanghai housing market by reading them all.
Pudong new housing one day tour 浦东看房一日游.
Songjiang overview 松江新城高品质公寓 (the author appears to be biased toward Poly since he/she is Poly West Bay 保利西子湾 owner); also post about lastest price at 保利西子湾.
Vanke housing buying experience 谈谈买房经历和体验 (this one is funny, in progress); another guy one month house hunting journey 一个月火速抢房日记.
Note I have not toured any of those properties, so use the reviews as your reference…
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Free gift certificates for restaurants
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Since the economy is so bad, I am going to give away some gift certificates for restaurants.com. Just do my part to boost the US economy 🙂
Seriously, I am going to give away up to Four $25 gift certificates (valid in the US only), to the loyal supporters and friendly commentators of this wonderful stlplace. Note “this blog looks nice” etc. does not count. Tell me what you really think: you will likely to receive the certificate that way. Also note I do not decide this solely on the number of comments (you left). Or if you would like to give some practical advice regarding this blog, I will appreciate it very much too. You can find my email address at the right side bar under author.
This runs from now until Christmas Dec. 25. All the friends are encouraged to participate, but not family members. Note this is mostly for fun and my token of appreciation, as you can buy a $25 certificate for under $5 from eBay. Also some restrictions from restaurants apply.
For participating restautants in your area, click here.
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Longtop: update
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(Updated) I used the revenue number from company report and calculated the growth rate, using google spreadsheet. Revenue, in thousand of $, the following columns may not align right, click the G speadsheet above if you like.
FY ending
3/31/2007 3/31/2008 growth rate 3/31/2009 growth rate
Q1 9238 11530 24.81% ?
Q2 11204 20200 80.29% ?
Q3 11581 15500 33.84% ?
Q4 7750 10770 38.97% ?
Total 39773 58000 45.83% 80000 37.93%
Couple things:
1) Seasonality: the past quarter (ending Sept. 30) is the strongest. The company did say summer and fall are typical strong quarters. Note the seasonality is quite different from typical US software company, where Q4 (quarter ending Dec 31) is ususally the strongest.
2) Healthy growth overall. The recent boom can be attributed to the boom of Chinese banking industry. The question is can the company can sustain this 40% growth rate?