Steve Jobs Stanford Commencement Speech 2005‏

I am honored to be with you today at your commencement from one of the finest universities in the world. I never graduated from college. Truth be told, this is the closest I’ve ever gotten to a college graduation. Today I want to tell you three stories from my life. That’s it. No big deal. Just three stories.

The first story is about connecting the dots.

I dropped out of Reed College after the first 6 months, but then stayed around as a drop-in for another 18 months or so before I really quit. So why did I drop out?

How Inflation Swindles the Equity Investor

The central problem in the stock market is that the return on capital hasn´t risen with inflation. It seems to be stuck at 12 percent.

by Warren E. Buffett, FORTUNE May 1977

It is no longer a secret that stocks, like bonds, do poorly in an inflationary environment. We have been in such an environment for most of the past decade, and it has indeed been a time of troubles for stocks. But the reasons for the stock market's problems in this period are still imperfectly understood.

Dolby Lab Is on Sale

The share price of Dolby is now at $49.84 with a PE of 19. There were $1022 million in current assets and $186 million total liabilities in its first quarter’s balance sheet, among which $148 million were current liabilities. What a balance sheet! Among it, cash and short-term investments were at $787 million, long-term investments were 347 million. Adding these together, it’s $1134 million in cash and investments. With 113 million shares, it’s almost $10 per share. That means the actual price for Dolby is at $39.79, low than $40. With this, the actual PE is now at 16.

Containing Stagflation Risk

謝國忠

Summary

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The central government has embarked on monetary tightening. The main tool is credit rationing. The efficiency of capital allocation is declining. This is compounding the trend of declining capital efficiency in the past few years. China's growth potential is declining as a result. The surging inflation reflects the tightening speed limit on growth rate.

Business Owner VS Share Holder

Now most of people know who Warren Buffett is. However, few really believed that a share holder of a public company is practically a business owner. To many people, including entrepreneurs and financial professionals, shares are papers exchangeable for cash. They buy shares simply for the hope of selling it at higher prices later. That’s why when people talk about shares they often raise questions like these:

Why do you think the price will go up (or down) for XYZ stock?
Is this the bottom of the market now?
Has ABC industry a good prospect in near future?

Burning Tough

2010 is the most difficult year I had went through as an investor. The only certain thing about the economy in 2010 is uncertainty. As I mentioned in my last article "Is this party time again?" China is still facing the same economic problem and the share market performance after the National Day is well reflecting such dilemma. Fortunately, I had invested mostly in US companies in last year and still got a 19% return on my portfolio.

Is This Party Time Again?

The share prices in worldwide stock market went up in the past 2 weeks. As an investor, I should be very happy with the capital under my management fully invested in US and HK markets. However, it’s China again. Although we only allocate a small portion of our capital to invest in the China A shares, we had only invested even much smaller portion before October.

It’s The Interest Rate

Chinese Banks

[FTChinese.com]
Now that's a stress test. The Chinese banking regulator reckons the nation's lenders may struggle to recoup about a quarter of the Rmb7,700bn ($1,100bn) they've lent to investment vehicles owned by local governments (LGIVs). If Rmb1,770bn of loans to LGIVs – vital conduits of China's huge economic stimulus – do indeed go sour, that'd be almost four times the system-wide stock of non-performing loans at the end of June.

Not Be Fooled by Viagra

There are many professional investors talking about the low valuation about the Chinese A shares recently. They even compared the price of H share or B share of the same company with its price of A share, and discovered that the A shares of certain companies are cheaper than their counter part in H or B share market. Therefore, the pros declared that A shares are cheap and the Chinese investors are again immature. It seems that they are right with the surge in the A share market on the 2nd day today.

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