- USA Weekly new jobless claim rise to 516k, 7 yr highest (worse than expect, 484k), continue jobless claim rise to 3.9M (worse, 3.85M)
- USA Oct retail sales drop 2.8% (worse, -2.65%)
- China Oct CPI (inflation) fall to 4.0%, give room to cut interest rate further
11.18.2008
Corp info: Berkshire Hathaway 3q08 result
- Premium dropped mainly due to $7.4B non-recurring retroactive reinsurance agreement with Equities made in 07 and not in 08, exclude this non-recurring issue, revenue up 0.4% vs 3q07 instead of 8% drop.
- Its fixed maturity securities asset balance looks great, do not have any material impairment charge (like other bankers or insurers)
- Other than Goldman Sach & GE, in Oct, Warren purchased $4.4B of 11.45% sub-notes & $2.1B preferred stocks of Wrigley (M&M chocolate and Eclipse gum)
- Its fixed maturity securities asset balance looks great, do not have any material impairment charge (like other bankers or insurers)
- Other than Goldman Sach & GE, in Oct, Warren purchased $4.4B of 11.45% sub-notes & $2.1B preferred stocks of Wrigley (M&M chocolate and Eclipse gum)
Wal-Mart 3q08 results
- Report strong sales up 9.4% vs 3q07, mainly driven by international market, but US division do have 7.1% up. Outlook fall on bad global economy and strong US$ will offset the international sales growth
- Strong profit up 11.2%, gross margin up from 5.10% to 5.54%, which shows a great cost management for a worldwide department store when the commodity price up that much during the year
- Wal-Mart is the world's largest retail store with strong sales in tough market situation, and one of the Dow Jone component stock's price continue to rise in 2008;
- It is good to hold, but from a value prospective, i think there are lots of under value stocks better than Wal-Mart;
- Strong profit up 11.2%, gross margin up from 5.10% to 5.54%, which shows a great cost management for a worldwide department store when the commodity price up that much during the year
- Wal-Mart is the world's largest retail store with strong sales in tough market situation, and one of the Dow Jone component stock's price continue to rise in 2008;
- It is good to hold, but from a value prospective, i think there are lots of under value stocks better than Wal-Mart;
Corp info: HSBC 3q08 results
- It did not publish any financial statement for 3Q, just some highlight, Tier 1 capital remain strong at 8.9% in 3q08 (8.8% in 2q08 & 9.3% in 4q07);
- It is the largest bank in the world, the 1st one to disclose issue on sub prime mortgage, 1st one to fund its CDS pool. It has a pretty global diversify asset portfolio.
- HK$80 or US$51.3 seems attractive, main concern is whether it can keep the growth in market such as Middle East, Hong Kong & China at the same time minimize / stop its loss in America & Europe.
- It is the largest bank in the world, the 1st one to disclose issue on sub prime mortgage, 1st one to fund its CDS pool. It has a pretty global diversify asset portfolio.
- HK$80 or US$51.3 seems attractive, main concern is whether it can keep the growth in market such as Middle East, Hong Kong & China at the same time minimize / stop its loss in America & Europe.
11.11.2008
Econ data: 08 week 45
- USA unemployment rate rise from 6.1% in Sep to 6.5% in Oct (worse than expectation, 6.3%)
- USA job creation in Oct is -240k (worse, -200k)- USA weekly jobless claim rise to $481k (worse, $478k) while continue jobless claim reach $3.84M (worse, $3.75M)
- BoE cut interest rate by 150 bps to 3.0% and ECB cut 50 bps to 3.25% (good)
- China announce it will increase government spending / cut tax in total of RMB$400B to boost up economy. Emphasis mainly on construction, therefore, I don't think it will trigger a huge rise in equity market, but for sure it will keep China GDP above 8% in the coming 2 years.
- USA job creation in Oct is -240k (worse, -200k)- USA weekly jobless claim rise to $481k (worse, $478k) while continue jobless claim reach $3.84M (worse, $3.75M)
- BoE cut interest rate by 150 bps to 3.0% and ECB cut 50 bps to 3.25% (good)
- China announce it will increase government spending / cut tax in total of RMB$400B to boost up economy. Emphasis mainly on construction, therefore, I don't think it will trigger a huge rise in equity market, but for sure it will keep China GDP above 8% in the coming 2 years.
Berkshire Hathaway 3q08 results
Finl data: 3q08 revenue fall 8% (mainly on insurance premium), profit fall 77% mainly due to fall in gain / loss on investment (it sold Petro China in 3q07 which recognized a huge gain of $2B) and $2.2B loss in derivative on equity index put option (sell position). During the period, its cash flow position fall by $14B, excluding huge acquisition in 08, it actually up $3B, net cash flow as of Sep 30, 08 is $33B which equal to 27.5% of total equity or 11.7% of total asset.
Issue: total equity only fall 0.5%, once again, Warren Buffet managed its portfolio well to loss 0.5% only in 2008 while S&P 500 has already dropped by 34% as of Sep 30, 08. According to Warren, he thinks the current equity market situation is good to acquire/invest even though he is not able to catch the lowest point. In Oct, Warren invested $5B in Goldman Sech at $115 & $3B in General Electric at $22.5 with 10% special dividend each. However, those 2 stocks are underwater now trading at $75 & $17.81. (Historically, if a person follow exactly of what Warren's buy/hold/sell within 6 months, that person will have an average of 20% return per year in the past 50 years - compare to 26% of what Warren making.)
Comment: price per book fall to historical lowest 1.34, very attractive from a value prospective. Given a 1.9 times historical price / book, it should worth $4900.
Issue: total equity only fall 0.5%, once again, Warren Buffet managed its portfolio well to loss 0.5% only in 2008 while S&P 500 has already dropped by 34% as of Sep 30, 08. According to Warren, he thinks the current equity market situation is good to acquire/invest even though he is not able to catch the lowest point. In Oct, Warren invested $5B in Goldman Sech at $115 & $3B in General Electric at $22.5 with 10% special dividend each. However, those 2 stocks are underwater now trading at $75 & $17.81. (Historically, if a person follow exactly of what Warren's buy/hold/sell within 6 months, that person will have an average of 20% return per year in the past 50 years - compare to 26% of what Warren making.)
Comment: price per book fall to historical lowest 1.34, very attractive from a value prospective. Given a 1.9 times historical price / book, it should worth $4900.
Corp info: Shoppers Durg Mart 3q08 results
Finl data: 3Q08 remain strong, sales up 9.8% compare to 3q07, net income up 15.6%. Mainly due to total store square feet rise 12.6% and gross margin improved from 10.7% to 11.2%.
Issues: More capital spending in future if Shopper would like to keep up the growing momentum under the economy difficult situation. On the other hand, it continue to have the dominate position for drug store in Canada. Plus job creation, profit growth in health sector remain healthy at this stage compare to all other sectors.
Comment: Based on estimate 08 EPS $2.61, current price seem a quite higher compare to US drug store such as CVS Caremark or Walgreen. Therefore, from a value investing prospective, it only worth $34per share. If I add growth as one of the evaluation factor, it should worth $57.42 based on historical P/E ratio.
Issues: More capital spending in future if Shopper would like to keep up the growing momentum under the economy difficult situation. On the other hand, it continue to have the dominate position for drug store in Canada. Plus job creation, profit growth in health sector remain healthy at this stage compare to all other sectors.
Comment: Based on estimate 08 EPS $2.61, current price seem a quite higher compare to US drug store such as CVS Caremark or Walgreen. Therefore, from a value investing prospective, it only worth $34per share. If I add growth as one of the evaluation factor, it should worth $57.42 based on historical P/E ratio.
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