HUST, my alma mater

Read this post from WesternFord, and found those beautiful pictures taken in Wuhan Univ. and Huangzhou Univ of Science and Technology. It reminded me the college days at HUST. Hope to visit it again in the near future, last time I visited was year 2002.

While Huazhong is mostly an engineering school, it also has a decent business (management) school and econ department. One of the rising star in Chinese goverment (fiscal policy advisor) is Ba Shu Song 巴曙松 (blog), he recently gave a Finance lecture to the leaders of CPC political bureau. I vaguely remember him while in college, when he was the head of (students) radio station.

CICC 2007 investing strategies

(Update Dec08) They released 2008 forecast, here is excerpt.

中金2008年股票策略报告认为，中国A股市场高估值状况将在2008年持续，大盘蓝筹股明年上升空间为30％－40％，并看好金融、地产、零售、钢铁和电力等五大板块的投资机会。

(Original) We are at the end of 2007, and it’s interesting to reflect how the market did, how our portfolio did, and how the analysts did (to forecast the market).

In the begining of this year, I have the oppertunity to read this CICC 2007 investing strategy report (PDF file here). CICC, China International Capital Corp, 中国国际金融有限公司, is striving to be China’s own Morgan Stanley. The reason I posted it here is not to evaluate how the CICC analysts did in terms of forecasting, but rather to help our own self-reflection: what went right, what went wrong? Hopefully we will be better investors as we continue to learn,…

In Berkshire we trust?

The following is a one-year chart of Berkshire Hathaway (B share).

Home Inns and Longtop

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)

Durable competitive edge

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.

Not so harmonious stock market?

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 🙂