The Alcoa's earning result missed the expectation. The major reason is the input cost (mainly energy cost has doubled from a year ago). I will pay close attention to PPI.
Closing Value
Portfolio 1 (U$): 111663
Portfolio 2 (C$): 80949
Monday, January 11, 2010
Labour shortage in China
The numbers came out of China (import and export numbers) were surprised on the up side. The markets in Asia and Europe were being pushed up on this news. My contacts in China told me that over 60% Chinese factories have difficulty to find labours. The implication is inflation, first in China, then export to U.S.
The crude price is approaching to 85 which will slow down the recovery. I am cautious on the market.
The crude price is approaching to 85 which will slow down the recovery. I am cautious on the market.
Friday, January 8, 2010
take profit on gold
I sold 200 IMG @17.3. Gold is going to range trade. Also bought 100 TD @63.6. I wrote the reason to buy it yesterday.
Electric car
This is the third time I wrote about Electric Car (EV). EV is probably the most important product over next 20 years. If it is successful, both the shortage of crude oil and the CO2 issue will disappear. However, there are many challenges in EV
1. The cost. The cost of the battary will be 15k to 20k higher than the gasilin tank. It will need subsidies from government. Given the deficit situation around world, how long the subsidies can go is a question mark.
2. The range. The most advanced EV has a range of 100 mile without recharge, which is good for daily commute but not for vacation or long distance travel. It will limit its market share to 20% at most. Of cause, technology can improve.
3. Crude oil price. The irony is if EV is successful, then, crude oil will go down. But you really need high gasoline price to motivate people to buy EV. The solution is to apply some taxes on gasoline to keep the price high regardless of the crude price. It certainly is not a winning political argument.
4. Weather challenge. Cold weather is always a problem for battery. It may not be feasible for EV to operate in cold area, like Canada, Russia and north east U.S.
Who are the players:
1. Nissan. Nissan has invested most the money and has the product (Leaf) ready in the fall of 2010.
2. GM. GM's Volt will be ready next year. But its range is much smaller than Nissan.
3. BYD, a Chines company Warren Buffet invested in. The battery is advanced but the car quality need improvement. By the way, BYD is working on how to store solar power which is big. currently, solar power is not reliable because no way you can store the power to use it when there is no sunshine.
1. The cost. The cost of the battary will be 15k to 20k higher than the gasilin tank. It will need subsidies from government. Given the deficit situation around world, how long the subsidies can go is a question mark.
2. The range. The most advanced EV has a range of 100 mile without recharge, which is good for daily commute but not for vacation or long distance travel. It will limit its market share to 20% at most. Of cause, technology can improve.
3. Crude oil price. The irony is if EV is successful, then, crude oil will go down. But you really need high gasoline price to motivate people to buy EV. The solution is to apply some taxes on gasoline to keep the price high regardless of the crude price. It certainly is not a winning political argument.
4. Weather challenge. Cold weather is always a problem for battery. It may not be feasible for EV to operate in cold area, like Canada, Russia and north east U.S.
Who are the players:
1. Nissan. Nissan has invested most the money and has the product (Leaf) ready in the fall of 2010.
2. GM. GM's Volt will be ready next year. But its range is much smaller than Nissan.
3. BYD, a Chines company Warren Buffet invested in. The battery is advanced but the car quality need improvement. By the way, BYD is working on how to store solar power which is big. currently, solar power is not reliable because no way you can store the power to use it when there is no sunshine.
employment and deficit
Both U.S and Canada continue to lose jobs and the economy is not as strong as the stock market suggest. The Fed will continue its QE and low interest rate policy. U.S. government will probably start another stimulus program which will add deficit. Long term rate will go up because of the deficit. I am puzzled by the argument that short term deficit does not matter, only the structure deficit matters in long run. If you run a 1 trillion dollar deficit stimulus program, the interest alone will be 40-50 billion dollar a year, that becomes long term problem.
Thursday, January 7, 2010
Summary Jan 7, 2010
The financial has been strong since I bought Bank of America a week ago. BAC is up 15% in a week. My target is $18. Probably will sell it tomorrow.
Closing Value
Portfolio 1 (U$): 111383
Portfolio 2 (C$):80846
Closing Value
Portfolio 1 (U$): 111383
Portfolio 2 (C$):80846
China raised rates
China is surprising the market to raise short term rates. It is a long term positive but short term pain. The commodity should trade down.
U.S. retail number overall is fine. But don't read too much about it. The cold weather probably play a part.
The market will go down today. I will put a buy order for 100 TD bank @63.3 in C$ portfolio. Rational:
1. The dividend yield is around 4%. 2. The yield curve spread is wide. 3. TD waterhouse is doing very well. 4. It is taking advantage to build s strong retail presence in Northeast U.S.
U.S. retail number overall is fine. But don't read too much about it. The cold weather probably play a part.
The market will go down today. I will put a buy order for 100 TD bank @63.3 in C$ portfolio. Rational:
1. The dividend yield is around 4%. 2. The yield curve spread is wide. 3. TD waterhouse is doing very well. 4. It is taking advantage to build s strong retail presence in Northeast U.S.
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