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Investing

Portfolio management: lessons learned from Buffett

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“Be Greedy When Others Are Fearful”: Why Buffett Didn’t Buy More at the Bottom (Yahoo Tech-ticker)

More importantly, I think controlling one’s emotion is key in this market (like yesterday and today :-(. Obviously easily said than done. Yesterday I read the WSJ top page story on people trading AIG stock, most of them lost money eventually (I believe so, at least most people gave back the gains). Trading AIG stock is an extreme example, because of its volatility in last month (August).

Other lessons from Mr. Buffett:

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Investing

Brookfield Properties

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(Google finance NYSE:BPO) company web site

Wikipedia: link
Brookfield Properties Corporation (TSX: BPO, NYSE: BPO) is a Toronto-based North American commercial real estate company. Brookfield Asset Management owns 50% of its outstanding common shares.
Brookfield owns, manages and develops premier office properties in the downtown core of New York City, Washington, D.C., Boston, Denver, Minneapolis, Toronto, Calgary, Ottawa, and Vancouver. Brookfield’s properties include One Liberty Plaza and the World Financial Center in New York City; Brookfield Place (formerly BCE Place), First Canadian Place, and Queen’s Quay Terminal in Toronto; Canadian Western Bank Place and Enbridge Tower in Edmonton; Suncor Energy Centre, Fifth Avenue Place, Altius Centre, Herald Building, and Bankers Hall in Calgary; and Royal Centre in Vancouver. It also operates real estate service businesses and has a land-development business primarily based in Canada.

Secondary offering August 12
(From Reuters) Brookfield Properties Corp. Prices $900 Million Common Share Offering
Wednesday, 12 Aug 2009 10:23am EDT (F-10 here)

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Master Series

Buffett’s take on recession and healthcare reform

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Warren was asked about Healthcare reform at Fortune Most Powerful Women’s conference.

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Investing

Portfolio management: lessons learned from Lehman collapse

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I have NOT added any new money to my brokrage account since Sept 15 2008 Lehman Brothers collapse, so it’s easier to calculate the performance of my portfolio (+25%, from Sept 30 2009 to today Sept 14 2009), and compare to benchmark (S&P -16.75%, from Sept 15 2008 to Sept 14 2009). We can not predict catastropic events, if we really want to predict future or talk about any lessons for industry, I think one thing is clear:

one either becomes too big to fail (like AIG), or becomes the first to fail (like Bear Stearns), the last thing one wants to be is being No. 4 investment bank, leverage heavily and caught in the financial and political turmoil. We all know the day before Lehman fall, Merril Lynch (No. 3 investment bank) got bought by B of A, and shortly after that No. 1 Goldman and No. 2 Morgan Stanely converted into bank holding company.

For me personally, I can think of the following.

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Investing

Portfolio management: trade to lower cost

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Buy and hold, long term investing? I hold CROX from $75 to $20, hoping for a rebounce. It never came. Sometimes we got to trade stocks to take advantage of price volatility (up and downs). I was successful on this aspect from time to time, especially since the stock rally started this March. I made some money back from NRG Energy (NYSE:NRG) and Huntsman (NYSE:HUN), to cover the loss from holding Berkshire Hathaway (BRK.B). Here again the lesson of “buy and hold”, even for a good company like Berkshire, I bought it at wrong time (April, May 2008).

BRK.B Berkshire Hathaway Inc. Buy Apr 9, 2008 1.00 4,349.89 7.00
BRK.B Berkshire Hathaway Inc. Buy May 12, 2008 1.00 4,130.00 7.00
BRK.B Berkshire Hathaway Inc. Sell Mar 23, 2009 1.00 2,894.25 7.00
BRK.B Berkshire Hathaway Inc. Sell Mar 26, 2009 1.00 2,939.51 7.00

Pros and Cons of low cost trading: Sogotrade

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Stocks

Sinovac: benefit from H1N1 vaccines

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(Update 22Sept09) Sold all my SVA shares. The stock is trading at bubble price and it is very speculative. Initially I made some money, but I gave it all back and then lost some. So the lesson here is don’t overpay for “hot” stocks.

(Update 14Sept09) Sansar Capital (Sanjay Motwani), the hedge fund who is also the largest shareholder of Sinavac, sold a bunch following the run up of the stock. See SEC 13G filing here. He still holds 1,238,042 shares (2.9% of all outstanding shares) according to this Sept 10 report. He has twice more on June 30 report SANSAR CAPITAL MANAGEMENT LLC 2,953,503 6.89 $11,666,336 30-Jun-09 (Source: yahoo finance)

(Original) When I was a little kid, village doctors will come and give free vaccinations. Because I was scared of the pinch of needle, I would ask my grandma shut the door (not open) and begin to hide when I heard doctor is coming. Things changed after I started attending school, I will be quitely taking the shot when the doctor comes to class giving vaccinations, as I was the president of the class (have to make an example of myself).

vaccination pic
(Source: PrisonPlanet: notice the number of death from H1N1 has risen since the July)

Vaccinations are a wonderful thing. As I read from HowVaccinesWorks, many lives have been saved, and many more illness have been prevented. I am glad to learn this is still free to children in China (according to Wang Jianshuo).

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Business

Healthcare reform: some good things about US hospitals

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Went to St. John’s Mercy hospital last week, accompanying my wife for the baby ultrasound thing. I am familar with St. John’s because I went there couple times before (once was I hurt myself during roller blade skating, and I had to get two stitches there).

As I said in my previous healthcare reform post, 10 years ago I was amazed by the good conditions of University of Missouri hospital (Columbia) because it’s clean and it’s just not like hospital (my impression of hospital back in China, read Went to Children’s Hospital – Refugee Camp from Wang Jianshuo and you will know. More recently he wrote Hospital is Badly Needed). This time I had similar feeling about St. John’s. Now they got Wifi so theoretically we can work from hospital cafeteria. I even told my wife does they have openings.

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Software development

The eBay Skype deal

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eBay agreed to sell a majority stake of Skype to a consortium of private investors lead by Silver Lake Partners. (WSJ: EBay CEO: Skype Investors “Confident” of Work-Around Software, get it from Google if necessary).

Silver lake is not new to me. Because they bought Seagate, and my former employer (hint: a major CAD/PLM software company) and made money from both (WSJ: Silver Lake’s Skype Deal Resembles Its Seagate Investment). See more of their investments here.

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Business

IS blockbuster busted?

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VHS:blockbuster vs. DVD:Netflix

This is the GRE (Graduate Record Exam) analogy I would use for movie rental companies Blockbuster (NYSE:BBI) and Netflix (Nasdaq:NFLX). The popularity of VHS tape made the success of Blockbuster, as I read from Wiki, the first Blockbuster movie rental store was established in Dallas in 1985 (24 years ago). By similar token, the popularity and technology bring huge success to the “all you can eat” DVD by mail service provider Netflix.

Blockbuster logo

Blockbuster did not stand still. They got rid of the infamous “late fees”, replaced all the good old VHS tapes with much slicker DVDs, even tried the Total Access (combining DVD by mail and at store), but it appears they are still losing a lot customers to Netflix. More recently, the Redbox and Movie Box, those help-yourself (a dollar per rental) kiosk show up in McDonald, Walgreens, grocery stores, and people like it because it’s both cheap and convenient. But they also add salt to the injury of Blockbuster.

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Economy

The reasons behind China crazy real estate market?

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Some thoughts after reading Wang Jiansuo’s Craziness of Real Estate Market.

1) Fundamental: demand, new household forming, and demand to live better (more space). In the US (according to Buffett) 1.3 million household forms every year, while in the booming years they are building 2 millions houses per year. I don’t have China’s number. Note in China there is this urbanization theme: people in rurual areas migrated to cities to find better paying jobs, and then settled down as they are looking for better opportunities for their kids. Vanke (leading Chinese developer, source: teasmoker, link broken, full article attached below) thinks migration will create housing need for 7.5 millions householding. But most of them can not afford it new apartments in cities.

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