He talked about job market, compensation, and the events around crisis a year ago.
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John Mack on CNBC
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Mr. Peterson has background both in government and private sector: he has been commerce secretary and is co-founder and senior chairman of Blackstone (the private equity group). Very wise guy in my mind.
Charlie Rose interview July 3, 2009 (link)
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Stock lessons: IPOs
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First let’s mark Oct 14 2009: Dow 10,000 2.0 (Yahoo Tech-ticker video below)
(did you notice the Yahoo ~~~ in the end, Yahoo became more goofy under Carol)
My topic today is IPO. I have not got much luck from IPO investing (to be more precise, speculating). My lessons are the following:
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Blockbuster dying
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(Update 13Nov09) BBI released not so good earning report (Reuters). One interesting point is they are going to spend $10,000 to $20,000 to renovate the stores (about 1,700).
(Original) Note I am saying “dying”, not “death”. This also does not demonstrate all the hard work of men and women at Blockbuster, from corporate to stores, note I am merely talking about the trend of a business. Full disclosure: I do have a small long position on Blockbuster common stock (NYSE:BBI).
Two points:
First, stock and company are two things, Blockbuster dying does not equal to Blockbuster stock BBI goes to zero immediately. Example: The Motors Liquidation Company (formerly General Motors, MTLQQ.PK). Last I checked, their worthless stock is still trading at 65 cents.
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Is this sucker’s rally ?
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From Yahoo Tech-ticker. I don’t necessarily agree his view (but it’s always good to listen to both sides of the arguments).
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Two things I wanted to talk about ESPP: personal bias and taxation.
I remember I grew tired of my undergraduate college at the fourth year, due to various reasons. But after leaving my college for so many years, now I think that’s one of the best places I have been. Personal congnition bias also plays with work. There are always misgivings in the work place, this got intensified with the recession. Recent Economist has an article on this “unhappy work place” topic. But if we take a deeper breath, I think many work places are not as bad as we perceive. In fact, some maybe fabulous business if some reform initiatives being applied.
On the other side of the equation, we all know what happened to Enron and WorldCOM employees and retirees when they put signigicant amount of personal wealth on company stocks. They believed in the pep talk of their CEOs.
Taxation is a complicated matter. Some explaination from Yahoo (Turbo Tax).
Appendix: my ESPP history
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Mistras IPO looks interesting
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(Update 22Oct09) SEC filing 424B4.
(Original) I talked about Mistras (NYSE:MG) IPO briefly the other day. Today I read this “MatlinPatterson Global Sells $3M Worth of Huntsman“. And in this news I saw some insiders of Mistras bought some shares in IPO:
Mistras Group (MG) Stamatakis Manuel N DIR 6,000 $75,000
Mistras Group (MG) Peterik Paul CFO 2,000 $25,000
They paid about $12.50 per share (IPO price). Very interesting. For most IPO shares “It’s Probably Overpriced”. But this one seems quite reasonable. After IPO, its market cap is about $300 m, with revenue of about $200 m. The income and earning per share number is eschewed because the company paid quite some preferred share dividend recently. I need to read whether those preferred shares will be converted.
Risks
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Check into Strategic Hotels and Resorts
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(Update 21Oct09) Baird analyst downgraded BEE. The stock dropped quite a bit. Also, I found the web site of Vector Group Ltd here. Vector Group bought a 7.1% stake in BEE on July 8 (SEC filing here). Note the owners of BEE includes Bill Gates (via. his Cascade Investment). A Hotel REIT list.
(Original) Ticker symbol (NYSE:BEE), other hotel REITs for comparison: DRH, LHO.
Company web site. Note Bill Gates private investment fund bought a 5.6% stake on Oct. 2008 (Reuters; Seekingalpha).
National Real Estate Investor/Matt Valley: No Respite for Hoteliers
The epic downturn in hotel fundamentals is forecast to slow, but not before inflicting widespread pain.
CEO Lawrence Geller blog ( a bit old)
Other recent developments
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I did not do anything with my 401k when I left my old employer about one year ago. The past year was also a year of hugh up and downs. I managed not to do anything with it in the past year: no re-balance, no jump in and jump out, no rollover to IRA, and no withdrawl either. Here is the record in past year.
One Year
10-09-2008 to 10-08-2009: +16.90%
half year
03-09-2009 to 10-08-2009: +65.80%
YTD
01-01-2009 to 10-08-2009: +26.10%
Current asset allocation (100% equity)
39% US large cap, 23% US small cap, 30% Non-US developed market, 5% Non-US emerging market, 3% company stock.
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IPO: It’s Probably Overpriced
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That’s not my observation, that’s what Graham, the value investing guru, said in his book “Intelligent Investor”. I think this is especially true in the current IPO market. Two large recent IPOs, Shanda Games (Nasdaq:GAME) and Banco Santander Brasil S.A. (BSBR, SANB11.BR), showed exactly that. Both traded lower the first day it went public. I don’t have comprehensive statistics, but from my limited experience trading IPO stocks, most stocks traded lower the first day turned out to be a dog (lagger).