Categories
Stocks

Year End Reflections

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I don’t have to work these days. Besides reading the Peter Lynch’s book, checking out Crocs and Heelys in the stores, I also had a little time to review how I did with my 401K and taxable stock account. The good news is my 401K is getting a 18% gain, and for the first time in 3 years, I did not lose money in stocks. Of course for 401K one year’s gain does not mean too much, because we are looking at 20 or 30 years down the line. But I think I did one thing right: allocate my 55% contributions to value fund, and 30% to international (value) fund. In year 2006 international fund was a big winner partially due to the weakness of dollar. And from my observation value fund outperformed index fund and growth fund in most cases.  For the year 2007 I will boost the international value fund to 35% for the reasons I mentioned above. This way I am putting 60% in the value funds. The following are the mutual funds in my 401K account.

Fund Name            Fund Symbol  Price as of      Average Annual Return
                                                12/29/2006     1-Year 5-Year

Royce Total Return Serv*   RYTFX 6394  $13.61    13.53%   na 
Vanguard 500 Index Fund  VFINX 0040 $130.59    15.64%   6.07%  
Vanguard Explorer Fund     VEXPX 0024 $74.71      9.70%   8.21%  
Vanguard Windsor II Fun*  VWNFX 0073 $34.75    18.25%   10.12%  
Vanguard Intl Value Fun*   VTRIX 0046 $ 40.34     27.37%   17.21%  

*value fund

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Categories
Business Fun

Chicken Prices Went Up

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I noticed the Chicken price went up a little yesterday. I have not bought the whole roasted chicken from Schnuck for a while because usually when I got there at 6:30 or 7 PM, they are sold out. But I got it yesterday evening and I realized they are charging $5.99; it was $4.99 last time I bought (a while ago). So I did a little google search on “chicken price”, and found out the main reason: the corn is becoming more expensive as more corn is needed to make ethonal (alternative fuel), and rising energy cost. Note chicken ate corn so that they can grow. So don’t rush to buy “chicken producer” stocks such as Tyson yet. Although they charge higher price for chicken, they are paying higher raw material cost (corn) too.

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Categories
China Technology

More Patience Needed for Internet Disruption

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Here is what I saw from eBay:

***Asia Internet Connectivity Hit by Taiwan Earthquake – Trading Advice*** 
  
December 28, 2006 | 12:28PM PST/PT
“On December 26, an earthquake off the coast of Taiwan damaged several undersea cables shared by international telecommunications companies. This has disrupted Internet connectivity in many countries in Asia, including Australia.
While repairs are being made, it may take several days for their Internet services to work as normal. If you are involved in an eBay transaction with a member in this area, we encourage you to be patient with them and to keep trying to communicate as their services are restored.”

And from Wang Jianshuo’s blog

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Categories
China

Reality Check on HMIN

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HMIN     
# of ADRs 32,283,906/2

Price (27Dec06) $35    
Market Cap (USD) $1,129,936,710/2    Note Google Finance has incorrect number
     
Rev (RMB)       Q1          Q2               Q3             Q4 
2005       109,405,488 (1st half)  77,733,825   98,722,199 
2006 110,671,567 138,386,977 160,352,229 170,000,000 
YoY                                                106%          72% 

Est 2006 Rev: $73,343,136 (assume 1 USD = 7.9 CNY )

Market Cap/Sales: 7.5 (it’s not totally out of whack 🙂

Note: # of ADRs is outstanding shares expressed in ADR , note one ADR = two ordinary shares   

Categories
China Stocks

Bubble in some China Stocks

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I am not good at predicting the top or bottom of stocks, so take it for what it worth…

First is the LFC, China Life Insurance, which went from 100 to 140 in a few days mainly due to the “back to China” IPO in Shanghai Stock Exchange. Note GSH and other China blue chip ADRs traded in NYSE also got a ride at the same time.

If you would argue blue chips are “safe”, here is the more speculative ones, FFHL, the little known Fuwei Film Holding from Shandong Province, went from 8.50 to 17 in a week. You could argue the stock was priced a bit low and I saw an article mentioned this. But this quick run-up of stock price reminds me of EFUT, another little known Chinese IT company.

I have neither of the above stocks. But today’s HMIN (home inns) 8% run-up after yesterday’s 6% up made me nervous: I did have positions in HMIN. I still believe this is a very good company but I decided to take some money off the table this morning. Just as you would expected (and this is one of Major’s rules): stock went up after I sold it @ 36.88, it passed 38 today.  

(29Dec06)PS, on second thought, I jumped into conclusion too fast on FFHL. I think it’s a better company than EFUT. Please read the article I mentioned and its S1 for more info.

Categories
Master Series

Peter Lynch One Up on Wall Street

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I heard about Peter Lynch and his book more than two years ago; I ordered his book from Amazon last week because I wanted to learn more about stocks and investing. I just got to Chapter 5 now, but I found his book to be educational and interesting: his humor can be felt in many places of the book. This is a much fun book than Ben Graham’s Intelligent Investing. By the way, both Ben and Peter are considered as the gurus of investment, Ben is the mentor of Warren Buffett, Peter managed Fidelity fund and had a sterling record. Peter is not a big fan of Business School although he graduate from Wharton, here is what said about B-school: Some Wharton courses were not rewarding, but even if they’d all been worthless, the experience would have been worth it, because I met Carolyn (his wife) on the campus.

Seriously, he proposed the three questions “mirror test” for investing in stocks:

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Categories
Business China

Internet Disruptions Due to Taiwan Earthquake

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It seems to me the Internet connection from China to the outside world was down, because I could not get to some of the sites from baidu news. I attached the official email from iTalkBB, my IP phone provider at the end of this post. For me it’s just some inconvenience, but how much effect it would have on the business depending on the Internet connection between China and the US? Oh well, maybe they will have a backup plan. Here is another article about the Internet outage.

From a smaller scale, I don’t know the effect on people trading Chinese domestic stocks (A shares) from the US, vice versa. In this case, a good connection means money 🙂 

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Categories
Stocks

A Good Personal Finance Blog

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I found out the Sun’s Financial Diary when I was doing Google search on LFC. The author is a China born Engineer currently working in the States. I liked this blog because it has lots of good stuff about personal finance, the author even put up the real number for his income, tax and investment, such as this one and this one, fascinating, although I won’t do it myself.

The most important “take away” I got is “patience” and “planning ahead”.

Categories
China Stocks

LFC Shanghai IPO

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It’s priced at RMB 18.88 per share, and it will go out of gate on Jan 9, 2007 in Shanghai.

Today its US ADR LFC closed at $138.42. Note each ADR represents 40 shares of A share (in Shanghai). Consider today’s USD CNY conversion rate, 1 USD = 7.825 CNY.

138.42*7.825/40 = CNY 27.08

Assume this 138 price holds, from 18.88 to 27.08, it will have 50% jump on Jan 9, 2007. And its PE ratio will be in 90s. I feel this will very much like the New York Mercantile (NMX) recent IPO, i.e., it will jump to the target price as soon as it started trading. Ordinary investors won’t have much chances to make money on this one.

Yahoo finance has an interesting aritcle on LFC (in Chinese).

Categories
China Stocks

New Trend in the China Stock Market

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I did not realized the China Life Insurance (LFC) is going IPO in Shanghai Stock Exchange (A shares) until a few days ago. I did a little research on the web and found out there are quite a few big cap Chinese ADRs are going this route: Guangshen Railway (GSH) and Aluminum China (ACH) are another two. Here is an article I found on the web: besides those US ADRs, we have a few Hongkong listed companies such as Bank of China, China Industrial and Commercial Bank, PingAn Insurance, Air China, DaTang, etc.

So far the best performing stock is LFC; GSH also got a jump in past few days. Should have done research on this earlier: stock market is not like pursuing girl friends, besides being focused one should also be vigilant on new things.

Who is going to be the next one on the “back to China IPO”? I don’t know. But I believe the trend will continue, and one of the safe way to bet on this is investing through ETFs such as FXI. Sun’s Financial Diary has a very good analysis on this.