Top holding in Canada 11/22/10

1. Manulife Financial (MFC) CA$31.38 STRONG BUY
2. TD Bank (TD) CA$82.2 BUY
3. Imperial Oil (IMO) CA$45.2 BUY
4. Shoppers Drug Mart (SC) CA$ 42.7 HOLD
5. TransCanada (TRP) CA$39.45 HOLD

I am reviewing Imperial Oil’s 3q result, will share about it next time.

Top holding in USA 11/22/10

1. Google Inc. (GOOG) US$745.1 BUY
2. Wells Fargo Financial (WFC) US$41.1 STRONG BUY
3. General Electric (GE) US$19.7 BUY
4. American Express (AXP) US$48.6 HOLD
5. Walt’s Disney (DIS) US$36.99 HOLD

Irish financial crisis: Investors over-react the impact: 1) Irish’s fund shortage is due to broken of real estate bubble & creating mortgage bad debt in many Irish banks. So Irish government inject capital to banks and ran out of $$ in short term; 2) It is not big crisis because:

• EU has $750B emerging fund to support any member country in need;
• The shortage is not due to long term structural credit issues;
• The debt renewal amount is lots smaller than Greek, while Irish’s economy is better than Greek

I think it will settle this week.

Top holding in Asia/Europe 11/22/10

1. China Mobile (0941/CHL) HK$96.4 BUY
2. China Life (2628/LFC) HK$41.1 BUY
3. China Construction Bank (0939) HK$8.97 BUY
4. Total SA (TOT) US$61.64 HOLD
5. Shiu On Land (0272) HK$7.4 STRONG BUY

• China increased bank reserve ratio by 50 bps to 18.5%, historical highest & reduce next year’s borrowing target for big 4 banks, which will reduce R$350B credit flow in market. These are some softer policies to cool down the “hot” money, although it may hurt the potential growth of the bank sector – whose profit rely heavily on borrowing & deposit, on the other hand, it will lower the credit risk and decelerate the growth of the financial “bubble”
• I really upset & disappointed about the way China government handle with 趙連海, I don’t understand why, it is not political and if this (I mean if) is merely a civil case towards a corporation, and if the government don’t want to pay the compensation to all babies who got sick, that’s easy, just let 3 6 went bankrupt and re-open again 3 6 with the same management team few years later (of course, this is not ethical too). The government just don’t need to do such thing, it hurt everyone’s trust to China’s legal system and its political image in short term and if China continue this way, economy is everything and it is nothing, it will just lead the entire country, our nation, our home land, towards death. 趙連海 is really one of the righteous person in this injustice society, someone I should learn from (although I really don’t want to end up in jail) not just fighting for the rights on behave of his baby kid, but for the poor girl who got raped publicly in police station (make me think of the story in bible – judge c19-21).

Top holding in Canada 11/16/10

1. Manulife Financial (MFC)
2. TD Bank (TD)
3. Imperial Oil (IMO)
4. Shoppers Drug Mart (SC)
5. Trans Canada Pipeline (TRP)

Shoppers’ Drug Mart: during the “silent period” of Bilibala Finance, I bought back Shoppers’ Drug Mart at $35.0 because I think the regulation change in prescription drug has fully reflected in the share price.

Top holding in USA 11/16/10

1. Google Inc. (GOOG)
2. Wells Fargo Financial (WFC)
3. General Electric (GE)
4. American Express (AXP)
5. Walt’s Disney (DIS)

Walt’s Disney: after I sold Exxon Mobil, Walt’s Disney became Bilibala’s 5th top holding in USA. It reports 4q results according to Bilibala’s expectation (little lower than wall street). Its2010 EPS up 13.4% to $2.54m thx to the significant improve in Studio Entertainment segment (Toy Story 3, Iron Man 2, Alice in Wonderland helps Disney to make lots of $$). On the other hand, that also put a open question: can this strong box office continue in future years? Advertisement in Disney Channel, ABC and ESPN will continue to improve as economy slow growing.

Top holding in Asia/Europe 11/16/10

1. China Mobile (0941/CHL)
2. China Life (2628/LFC)
3. China Construction Bank (0939)
4. Total SA (TOT)
5. Shiu On Land (0272)

Market Fall: global stock market fall because of the following worries:

• Slow economy growth (every once a while, such worry came back)
• Inflation risk (will it come? No & Yes!! No, cuz consumer product index keep at around 2.0% and even in China, it is only 4.9%; Yes, commodity price rise like crazy. So it came and it will come, but in a non-tradition format – not in consumer product)
• Interest rate will rise (in China) (in order to balance between money supply, consumer product price and keep the borrowing / assets ratio low to prevent a potential bubble, I think a reasonable rise in interest is healthy to the economy. Under this interest rate rising expectation, China Life should be the biggest gainer cuz it will lower its insurance reserve liabilities.
• Default risk of the European PIIGS bonds
• To me, those worry are understandable but I think the true reason is a reasonable stock market adjustment. We should see the market stabilized at this point where S&P 500 at around 1170 and Hang Seng at around 23,000.

I’ve switched Exxon Mobil to Total SA, a France based integrated oil & gas company, cuz I want to increase my investment in Euro zone to have a more diversify portfolio while I think Total SA’s value is being more understated compare to Exxon Mobil.

Top holding in Canada 11/09/10

1. Manulife Financial (MFC)
2. TD Bank (TD)
3. Imperial Oil (IMO)
4. Shoppers Drug Mart (SC)
5. Trans Canada Pipeline (TRP)

• C$ is at par, but I don’t think it will rise further beyond $1.02, as overnight interest rate will most likely keep at 1.0% and the higher the C$ will hurt international trade between US & Canada;
• Wewill have the Shoppers Drug Mart’s 3q10 result this week;
• Manulife Financial: 3q10 result is $1.1B lower than Bilibala’s expectation, cuz it wrote off $1B goodwill in related to its USA insurance business (no way I can’t guessitmate this kind of management decision. It is non-recurring, so, who cares!!). Overall, as interest rate start rising thx to the QE 2.0, Manulife’s performance for future quarters should look better.
  Manulife has 3 major shift in its business model:
  1. diversify by expand its asset management business;
  2. de-equity risk by increase hedge & reinsurance to 50%;
  3. de-interest rate risk by higher duration of its bond holdings.
  From a risk management view, I think it will provide a much smoother quarter to quarter results. However, from a business view, this is not a smart move:
  1. as we all know interest rate will go up eventually, instead of go down
  2. equity market will go up when it was at the bottom (in 2009)
  why should anyone earn less just to smooth things out? Just follow the crowd? Anyway…..

Top holding in USA 11/09/10

1. Google Inc. (GOOG)
2. Wells Fargo Financial (WFC)
3. Exxon Mobil (XOM)
4. General Electric (GE)
5. American Express (AXP)

These days, after I moved to my new home, I did lots of home renovation: major appliances, lighting, windows, kitchen, wall, water system, flooring, gardening etc etc…… I think as house market become more stable now, those companies’ performance will improve. Based on my shopping experience these days, I found Home Depot’s services are better than Lowe’s & Rona.

Top holding in Aisa/Europe 11/09/10

1. China Mobile (0941/CHL)
2. China Life (2628/LFC)
3. China Construction Bank (0939)
4. Shiu On Land (0272)
5. HSBC (0005/HBC)

China Mobile: 3q10 revenue up 7.8% vs 3q09; earnings up 3.9%, ARPU down 4% to $72, # of customers up 11% to 569M. China Mobile still hold its dominate position in China’s telecommunication industry has 70.5% market share. However, growth definitely slow down from double digit to low single digit. To me, China Mobile’s current P/E ratio should be at least 14, which means its price should be at least HK$100. As it move to 4G, assuming the growth will go up from 4% to 8%, its value should worth at least HK$129 (in 5 yr).

Top holding in Canada 11/01/10

1. Manulife Financial (MFC)
2. TD Bank (TD)
3. Imperial Oil (IMO)
4. Shoppers Drug Mart (SC)
5. Trans Canada Pipeline (TRP)

• Imperial Oil & Manulife Financial will release its 3q10 results this week.
• Bilibala will sold BYD Ltd. & invest more Manulife Financial today.

Top holding in USA 11/01/10

1. Google Inc. (GOOG)
2. Wells Fargo Financial (WFC)
3. Exxon Mobil (XOM)
4. General Electric (GE)
5. American Express (AXP)

• Exxon Mobil net income up 55% mainly thx to oil price rise (bad for all drivers) and refinery margin increased, oil supply & demand kind of reach an equilibrium point, on the other hand, as USA, UK & Japan’s QE2.0 (print more $$) project, oil price should rise back to US$100 per bbl as what I predict 2 years ago. If so, Exxon Mobil should have room to rise back to US$75.
• General Electric net income up 29% while revenue down 5% mainly on energy infrastructure segment (that’s why stock price down cuz ppl focus on their revenue). Revenue down reflect the global capital expenditures on corporate infrastructure down during and after financial crisis, but as one will notice, GE’s profit margin continue to rise means, GE’s products & services are more profitable in a dollar to dollar basis and this trend has continue for the past two 2 years. I still need to complete the trend analysis.

Top holding in Asia/Europe 11/01/10

1. China Mobile (0941/CHL)
2. China Life (2628/LFC)
3. China Construction Bank (0939)
4. Shiu On Land (0272)
5. HSBC (0005/HBC)

• China Life: premium up 23% vs 3q09, total assets up 4.0% vs 2q10 while equity up 7.7% vs 2q10, as Shang Hang A stock break through 3k pt & interest rate up 25 bps, I think China Life will continue to increase shareholders equity value in 4q10 and so on, regardless of how much the reported net income is. In terms of stock value, I think today’s price is quite reasonable, not in big sales.
• China Construction Bank: results look awesome!! I still haven’t completed the trend analysis, will let all u know. It rise 13% from the day I came back to Canada, price over book rise to 2.43 and estimate price over earning rise to 10.1. um…………..still look reasonable but not in big sales.
• Bilibala will sold BYD Ltd. (not a wise decision to invest at 1st place, not cuz it is not good, but cuz I am not that familiar about the company plus I am worry commodity & labour cost will rise at least 10% per year which will hurt BYD’s earning) & invest more Shiu On Land today.