Cisco had a good quarter and the business is experiencing an upturn. It seems the spending on technology is coming back and I expect it is going to be a good year for large tech companies like CSCO, MSFT, INTC and IBM. The question is valuation. I will rate the above four companies fair to slightly undervalued.
U$ is strong today, which would put pressure on commodity. I will be interested in IMG again around 14.2
PIGS (Portugal, Ireland, Greece and Spain) all have debt problems. How big the PIGS' story will grow is a question the market pay close attention to.
Toyota is having a huge impact on Japan. Toyota is AAA rated and cross ownership in Japan will make things complicated if its rating being cut. I expect the cost to Toyota could be billions of dollar. If there are successful lawsuits then, nobody will know the costs.
Thursday, February 4, 2010
Wednesday, February 3, 2010
Volker rule
Paul Volker has been pushing to separate trading and hedge fund from commercial banking. It has got the support of Obama. The market seems dismissing the chance for it to pass the congress. I am not to sure about it. I personally believe it will go through. 1. It makes sense. 2. It gets global support which takes away the arguments of competitive disadvantage. 3. It has public support. 4. Volker has high credibility.
The Chinese market rebounded as expected. Overall, I do not see much going on in the market. Google is experiencing some troubles right now. I think it has a 50% chance to leave Chinese search market but still stay for the mobile market. If the stock falls below $500, it would be interesting.
The Chinese market rebounded as expected. Overall, I do not see much going on in the market. Google is experiencing some troubles right now. I think it has a 50% chance to leave Chinese search market but still stay for the mobile market. If the stock falls below $500, it would be interesting.
Tuesday, February 2, 2010
Summary Feb.2, 2010
The market is rebounding from oversold conditions. I do not see anything to push the market another 10% in either direction right now. China stock market has been going down for 2 weeks and it probably will have a rebound as well. The biggest problem facing China is inflation. If you count real estate in, the inflation is huge. There are pockets of labour shortage in China already and the raw material cost are going up as well. I can see inflation running up to 5% this year in China. RMB is going to appreciate 5% by mid of the year to fight inflation. However, China central bank will move some foreign reserve from U$ to Gold to reduce the its loss before RMB appreciation. I can see its entry point for gold between 1000 to 1050 ( they want to buy gold below India's purchase price).
Closing value
Portfolio 1 (U$): 111583
Portfolio 2 (C$): 80493
Closing value
Portfolio 1 (U$): 111583
Portfolio 2 (C$): 80493
take some profit
The market continues its rebound. I sold 200 IMG @ 15.44 and 100 TD @ 63.8 (all in C$). They are all good companies but I look for a better entry point (5% lower). My portfolio 2 right now only has 400 HSE in it and the rest are cashes ($69,645)
toyota's recall
Is Toyota undervalued because of the recall? I am not too sure about it. The fix is in. If it really works, then it can start to sell new cars again in a few weeks. The total costs probably run to 5-10 billion dollars (including the loss sales). However, the law suits are piling on. It could cost anywhere between a few hundred million dollars to billions and billions dollars. It is going to be there for long time. I will not touch Toyota at this moment.
China is going to accelerate the pace of acquiring oversea energy, base metal, iron ore, potash, and precious metal companies. They put aside 20-30 billion dollar aside for this year. Given the political sensitivity of Chinese takeover, I will assume the target company will be small to medium caps. They like resources locate in central Asia, Africa and south America. I will put HBM and S in Canada on my radar screen.
China is going to accelerate the pace of acquiring oversea energy, base metal, iron ore, potash, and precious metal companies. They put aside 20-30 billion dollar aside for this year. Given the political sensitivity of Chinese takeover, I will assume the target company will be small to medium caps. They like resources locate in central Asia, Africa and south America. I will put HBM and S in Canada on my radar screen.
Monday, February 1, 2010
Summary Feb.1, 2010
The market had a reflex rally and may last another day or two. The market is cautious. So I do not see a big bubble burst correction or a violent rally. The budget in U.S is terrible but Obama probably did the best he can do. It probably is positive long term for precious metal, although the correction may go on for a while in short term.
I bought 200 HSE @ 26.6 today. It closed @ 26.9
Closing value
Portfolio 1 (U$): 111,337
Portfolio 2 (C$): 80350
I bought 200 HSE @ 26.6 today. It closed @ 26.9
Closing value
Portfolio 1 (U$): 111,337
Portfolio 2 (C$): 80350
confusion is the market
The market is confused. On the one hand, the earnings seemed robust. On the other hand, market is worrying about the deficit, sovereign debt, tightening in China and populism against the banks. I still believe the market is going to be range bound.
The market is oversold. I will buy 200 shares of HSE @ 26.60, 200 INTC@19.3. If IBM goes below 120, I will be interested. IBM has very stable income. It did not drop in 2009, which is very impressive. It did not have high growth either. A 10X multiple, given the stable income, low growth, and strong cash flow seems very reasonable.
The market is oversold. I will buy 200 shares of HSE @ 26.60, 200 INTC@19.3. If IBM goes below 120, I will be interested. IBM has very stable income. It did not drop in 2009, which is very impressive. It did not have high growth either. A 10X multiple, given the stable income, low growth, and strong cash flow seems very reasonable.
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