The Rhapsody of an IT guy

Ricky Wong

noreply@blogger.com (A poor investor) — Wed, 17 Dec 2008 01:17:00 +0800

Just watch over Mr Ricky Wong 's briefing in ATV.

http://hk.youtube.com/watch?v=3RYSW2Xe4pg&feature=channel

few thoughts :

1. Why Linus supplement ? Ricky 's too aggressive and we should sense that they have different visions ?

2. If you work in ATV , do you buy in Ricky ?

3. He mentioned that he doesnt know TV production. How can he change the culture even he doesnt know how to do a better TV series. He doesnt even watch 珠光寶氣.

4. Change is a magic word. Every COE /manager uses it.

Hilarious version:

Liquidity Trap?

noreply@blogger.com (A poor investor) — Mon, 17 Nov 2008 15:50:00 +0800

Are we facing liquidity traps ? US keeps injects money by lowering the target rate but banks are not willing to lend. Is it Paulson discovered the problem and call off the TARP ?

How about fiscal policy ?

It has been suggested that the Japanese economy in the 1990s suffered from a "liquidity trap" scenario.This diagnosis prompted increased government spending and large budget deficits as a remedy. The failure of these measures to help the economy recover, combined with an explosion in the Japanese public debt suggest that such a fiscal policy, may not have been adequate. (Much of the government spending followed a stop/go pattern and involved spending on unneeded infrastructure.)

Paul Krugman suggests that what was needed was a central bank commitment to steady positive monetary growth, which would encourage inflationary expectations and lower expected real interest rates, which would stimulate spending.

How ? change from implicit monetary policy to target inflationary policy and keep interest rate for a extensive period ? or huge fiscal stimulus ? Let 's wait and see.

http://krugman.blogs.nytimes.com/2008/11/15/macro-policy-in-a-liquidity-trap-wonkish/
http://web.mit.edu/krugman/www/jpage.html

3968 CM Bank -Too good to be true ?

noreply@blogger.com (A poor investor) — Tue, 23 Oct 2007 01:07:00 +0800

http://www.sse.com.cn/cs/zhs/scfw/gg/ssgs/2007-10-23/600036_2007_3.pdf

EPS has increase 128%. The A-share announcement is more detail

From the announment , the following are key observations

-benefit from increasing interest rate spread by China central bank. From June to Sep, The net interest income is already 58% of 1H

-cost ratio has increased by 1.3 %. Still acceptable as the growth is large and there will be larger investment and remuneration for management/staff'

-loan loss provision is dropped below 9% but we have not take into account for seasonal factor.

-fees and commission revenue grows even faster as a result of active A share market

- the increase of req. reserve ratio would have little impact as the deposit increase is large.

- Further interest rate increase would be an edge for China Banks as the deposit rate is based on simple interest and loan is on compound basis.

-expect EPS for 07 may be over 1 dollar and trading at 37x PE.

Risk

- very high PB ratio. Even BV is 5 for 2007. The P/BV is still at 7-8x

- skeptical of very high growth rate. Anticipated that the non-interest income will be volatile. Still cant figure out it 's core economic franchise.

http://spreadsheets.google.com/pub?key=pR1x8WS8Q0p1y1RVyo6F2VA

753 AirChina - (1)

noreply@blogger.com (A poor investor) — Sun, 16 Sep 2007 21:13:00 +0800

- should be able to maintain double digit growth in revenue ~ 15% -20 %

- benefit from appreciation of Yuan. From income statement, the financial income growth for Yuan appreciation leads to exchange rate benefit has contributed for 8 millions in 1H

- benefit from the decrease in Oil price in 1H and the operating expense has dropped 2 %

- high operating leverage ( over 90% of revenue ) causing the net income increases drastically when the operating expense decrease 1-2 %

- will benefit from decrease in corporate Tax rate from 33% to 25 % in 2008 but it has also lead to decrease in defer tax asset and increase tax payment this year

- one-off income growth due to income from associate (should be Cathy Pacific) from 2006 0.1 billion to 0.48 billions. The growth will sure be slow down as the base has been increased.

- I expect the revenue growth could be maintained. But the growth will slow down to 15-20% and the major risk would be high Oil price at $80

- expensive valuation. Assume the growth could be maintained from 2nd half and EPS for whole year is 0.26 per share. The expect PE is still 35x and PEG is 2 assuming 17% long term growth which is a overpricing in my point of view.

Income statement analysis
http://spreadsheets.google.com/pub?key=pR1x8WS8Q0p0wvJzgPGtpQQ

interim report
http://main.ednews.hk/listedco/listconews/sehk/20070911/LTN20070911248_C.pdf

Management bubble 1 - "Management Decision"

noreply@blogger.com (A poor investor) — Fri, 7 Sep 2007 00:57:00 +0800

I was asked to support blah blah blah project in a "crisis". At normal situation, I hardly find some senior colleagues being technical. In any sense, they are managers managing your day to day tasks with indulgence. We seldom find any proactive technical advices from them.

During any crisis, they will demonstrate their excellent management skills to promote positivism. First, they would act like a beast walking around to beat you work faster and harder to minimize business impact. Then, they will suggest and reckon every possible means with unknown jargons and peculiar ideas. And you will be asked for N times since there are N managers.

According to my statistics, Server, SAN, restart and failover are the most common words and you would hear not less than a hundred times in high profile problem.

Who ever screw up the thing can only pretend to be innocent by stating "no error in the log". Or simply, attacking counterparts to divert attention.

Management team will then guide technical potatoes on the "superficial positive" way to handle the problem (without actually solving it or so-called problem management) .

Whenever you would like to free from the clutches of the problem by really addressing the problem with any actions on your team, your manager can easily override it by the so-called Management decision.

I found that it 's such a magic term can place in every situation:

P=potato
M=manager

P: Can we restart xxx for faster recovery ?
M: No, you cant do that. It 's management decision.

P: Could we decline this project? We have been running out of resources.
M: No, it 's strategic. It 's management decision

The only way to be anti- "management decision"

M: Why do you resign? You have so bright future and you are so brilliant.
P: It 's my suck decision.

誰接火棒?

noreply@blogger.com (A poor investor) — Sun, 2 Sep 2007 13:23:00 +0800

Quite an impressive analysis. Who said that China investor is ignorant ? Probably HK investors should reflect the fact that a lot of C9 trading by rumors and sticking to the fish box all the days.

http://blog2.eastmoney.com/zyl01698,640028.html

關於港股投資的問題，其實核潛艇與看好股市的新人以及朋友們已經說的很到位了。反正閑著也是閑著，我也說說這個東東吧。

從目前的港股投資實際操作層面的情況來看，有關方面的這個政策出台確實是比較匆忙的，甚至是欠妥的，就好比是那個半夜的政策。說實話，作為高層，我希望拍腦袋的事情盡可能少一點。“三拍”（拍腦袋，就那麼定了。拍胸脯，肯定沒問題。拍大腿，奶奶的，又交學費了。）問題確實是個問題。

從有關方面的出發點來說，應該是為了減輕外幣佔款的成本問題，為了解決流動性過剩的問題，為了緩解資產泡沫的問題，其出發點首先得肯定。但具體的效果如何，有待於觀察，目前很難判斷。

我的擔心是：一窩蜂的出去投資港股，會不會產生當初B股的國內開放，形成“解放全世界，套牢我一個”的尷尬呢？如此，如何向全國老百姓交代？

說實話，我並不願意就此話題深入的思考，因為我懶惰。

就投資價值的角度來說，不容懷疑，港股更值得投資，最起碼其投資價值大大的高於國內股市。雖然港股已經上漲了幾年，但還是在投資價值的區域以內，價值低估的股票我估計也是比比皆是（說實話，我並不了解港股的投資價值，隻不過是依靠常識來判斷的），甚至可以說還多於國內指數1000點的時候。也就是說，在目前的情況下，投資港股比投資內地的風險要小一點。也就是說，假如你是個真正的價值投資者，那麼就應該去投資港股。有關方面出台的這個政策，也讓我們多了一個可以光明正大的投資於港股的條件。說實話，我也會在適當的時候去投資港股，但不是現在。因為我相信，到時候的港股還是應該能存在比較安全的股票。

但是，在出去以前，我們得考慮、注意幾個方面：

1，雖然說我國的儲蓄率高，但很難支撐內地、港股二個市場。何況我估計目前內地的主力資金（公募基金）是不太可能被允許投資港股的，至於說自然人對於投資港股還是有著很多的不方便之處。那麼，內地股市與香港股市價格接軌的概率有多大呢？我無法判斷。

2，公司資訊的獲得問題，雖然說我們可以獲得差不多的公司資訊，但最起碼以香港的行文方式以及他們的表格形式披露的財務報表，我可能並不習慣。還有那個香港方面分析師的誘惑性以及商業目的，使得其分析報告的可信度低於內地。

3，你不能根據A、H股的差價來進行投資，否則你就不是價值投資，而是投機，因為B股的例子就是個例子。深萬科的價格與深萬科B的價格差距那麼大，為什麼呢？我想，這是值得我們思考的問題。由於內地股市是並不成熟的估值系統，而香港是國際上成熟的估值系統，這個東東有著太多的不同。假如我是美國投資者，假如國內（美國）的投資價值高於國外（香港）的，那麼我就會回來，投資於自己國家的股票。目前鞍鋼裡面的QFII全部出去了，就是這個道理。

這樣說吧，我國的估值系統，在周期性行業，往往是在景氣度高位時其股票的市盈率也是在高位，在景氣度低位時市盈率竟然同樣的也會在低位，所以，股價的波動就特別的大。為什麼呢？就因為國內主力資金及大多數人的短期行為。

而在成熟市場，行業景氣度在高位時，股票的市盈率應該在低位，行業景氣度在低位時，股票的市盈率就會在高位，那麼就大大的緩解了股價的波動。

就比如鞍鋼吧，在國內，假如鞍鋼這幾年在景氣度逐漸提高、產能產量大幅度提高的情況下，其業績會不斷的提高。在國內，往往在鞍鋼的業績最高的時候給予最高的市盈率，當鞍鋼達到每股淨利潤3元的時候，國內的估值有可能達到30倍（美其名為高成長性）。但在成熟市場，那時候的鞍鋼也許隻能給予10多倍的市盈率。如此，那麼內地與港股的差距究竟會怎麼樣呢？這是個很難判斷的問題。

4，港股的T+0交易模式，港股的T+3結算模式，港股的做空機制也是需要我們學習、熟悉的方面。其做空機制是股價波動的平衡器，與國內不同的是，他們在下跌的空間中也可以賺錢的。

總而言之，我並不反對出去投資港股，因為那邊確實是存在著價值低估的股票，但在國內，目前幾乎是沒了值得投資的股票。但是，我們得想清楚一些問題，而不是沖著差價。

Another Rally is coming ?

noreply@blogger.com (A poor investor) — Thu, 23 Aug 2007 09:16:00 +0800

What if Mr Benarke doesnot cut the rate ? Another good time to buy ?

http://bigpicture.typepad.com/comments/2007/08/five-reasons-wh.html

The Fed assumption made by many is that its a sure thing the Bernanke and the FOMC are going to give into the whining and pleading and crying and begging and beseeching and howling and weeping (In Yiddish, its called "kvetching") from the anti-free market self-cry baby commies currently residing in positions of influence on Wall Street and the media.

We therefore, goes this line of thinking, should expect rates cuts in September and beyond.

Not so fast, says the WSJ's Marketbeat. They assembled a short list of 5 reasons as to why a rate cut won't happen -- least not at the September meeting:

Why the Fed Won’t Cut Rates

1. Official on-the-record Fed commentary: St. Louis Fed head William Poole and Richmond Fed head Jeffrey Lacker have loudly argued against it. with Poole saying a “calamity” is required first, and Lacker noting the impact on consumers is “relatively small."

2. Off-the-record whisperings: Fed reporter Greg Ip wrote: while “officials acknowledge conditions are far from calm,” they cited stable stock prices, “a pickup in issuance of jumbo mortgages and other factors as evidence that in recent days conditions have improved, though gradually, instead of worsened.”

That doesn’t sound like a monetary policy committee that’s ready to lower rates.

3. What’s Been Done So Far: Through open market operations, the Fed has maintained a lower funds rate than the 5.25% target for the last couple of weeks. In addition, the Fed reduced the fee on lending from the System Open Market Account

4. Key economic indicators: Official household unemployment rate in July was 4.6%, which was up from the yearly low of 4.5%. Generally, it takes at least a change of 0.2 percentage points in this rate for the Fed to act, notes Ashraf Laidi, head of forex strategy at CMC Markets. Meanwhile, the year-over-year rate of consumer inflation still remains above the Fed’s upper target of 2%.

5. Moral hazard: Comments by Messrs. Poole and Lacker and the Fed suggest they are reluctant to be seen as bailing out hedge funds and other Wall Street players who became too intimate with leverage.

Contrarian

noreply@blogger.com (A poor investor) — Sat, 18 Aug 2007 16:55:00 +0800

HSI dropped 1300 pts and the volatility was over 1000pts on Fri. The subprime crisis has forced so many hedge funds to dump good companys at unreasonable prices. What will be the bottom? Who knows ? The only think we can do is believing the value of good company supported by genuine profits.

HSI is now trading at 15-16x with 005, 941 announced over 20% increase in profits. The expected PE should be dropped 13-14x whichs should be reasonable.

http://main.hsi.com.hk/hsicom/c_table/c_MnPEHSI.html

I would keep buying and let the profit runs.

3968 has recently drawed my attention. The loan loss provision is the lowest among 6 China banks and grows at the fastest rate. A conservative estimate for 60% this year, the PEG is still 48x/60 = 0.8 (using the closing price of $25). Still relatively reasonable coz the company should not be affected by the political loan which deters many investors.

Being indifferent to the stock price, I have increased the weight of 3968 at $24.5 in my portfolio

A bit concern with 1098 as it has recently dropped with the market to my 2nd buy price. I would revisit the NAV since it has exercised the option for property from Sunco.

902 has dropped to a more reasonable price but the government has not yet approved the price increase along with the coal price movement. I would keep my eye open on it. Otherwise, the high coal price would eat up the profit and then I would change to banking sector as the interest rate spread has been widened.

Perhaps I should closely monitored both.

0005 HSBC HDGS
0753 AIR CHINA - H SHS
0902 HUANENG POWER INTL-H SHS
1098 ROAD KING INFRAST
1398 ICBC - H SHS
3968 CM BANK - H SHS
3988 BANK OF CHINA - H SHS

How much does 1st generation iPod/iPhone worth ?

noreply@blogger.com (A poor investor) — Thu, 16 Aug 2007 23:00:00 +0800

Why is there multi-generation iPod and why Steve just manage to launch a ugly iPod with black and white but not a color one. Positive NPV ? No, even the NPV is negative. Steve should still go ahead with it.

For the 1st gen. iPod, NPV of the project must be destroying values and should be a do if we just consider the static NPV of the project. ie the expected cash flow discounted using company 's WACC.

The strategy is used simply coz we can view this in a more dynamic way and treat the multi-generation product as a multistage option. The expected Free cash Flow FCF of 1st generation project could be viewed as the underlying asset of the option where as the next stage CAPEX as the strike .

Using Black Schole/Binomial tree, the option value of the strategy should be larger than initial investment of the 1st generation iPod. ie Creating values for shareholders.

The heart of this valuation is on the volatility estimate, I suppose the strategic analyst has asked Steve quite a few questions about the confidence of project. (eg probability of FCF larger expected FCF by 50 % and so and so). This could simply allows us to quantify the volatility of the project given some management 's intuitive and hidden information.

Life may be a multistage option too.

Management vs Derivative

noreply@blogger.com (A poor investor) — Mon, 13 Aug 2007 14:53:00 +0800

Mangement is someone depends on working level. I think mangement is more or less a derivative. My rationale:

They are derivatives as they must be relied on underlying working level to position themselves. Imagine the analogy of a call, it cant be priced without the stock price/underlying asset movement. ie. A manager cannot be a manger without working level.

They are derivatives because they are much volatile than the underlying asset. In some sense, they are leveraging the company resource and working level to implement their great ideas. ie the beta of a derivative must be larger the underlying asset and the risk of being a Management is not small.

They are derivatives because theoretically they can be replicated (replaced) dynamically by underlying asset ! ie. They want to control because they dont know anything or afraid of being replicated.

Stretching to the limit, what if a market/ company having derivatives trading much more than underlying asset ? Bubble will burst.

Real Option

noreply@blogger.com (A poor investor) — Sun, 12 Aug 2007 21:20:00 +0800

Still struggling with equations.

Just thinking my real option facing in my life. If life and responsibility can be monetarized, I can simply compute the financial value of the option I faced by binomial tree analysis. And then minus the opportunity cost of the decision. I should then able to make a decision

But Life is not so simple and binomial.

HSBC 's loan loss provision

noreply@blogger.com (A poor investor) — Sat, 10 Feb 2007 16:42:00 +0800

HSCB the world 's local bank. Stephen Green has just announced the worsening sub prime mortgage business at the state. Given the robust capital structure and strong growth at niche markets, it should be the first of the time for HSBC to have a early announced recession. As a shareholder, should we still bet on the management ?

I will take a look at the historical loan loss provision and compare with the growth of the company. Let's see what should be done.

My portfolio:

0005 HSBC HDGS
0753 AIR CHINA - H SHS
0902 HUANENG POWER INTL-H SHS
1098 ROAD KING INFRAST.

1398 ICBC - H SHS
3968 CM BANK - H SHS
3988 BANK OF CHINA - H SHS