OneOnian Money Talk

Brought 50 Shares of FNM at $35.20 yesterday. The market cap was at its intrinsic value according to my calculation. Fannie Mae has little chance going bankrupt since it’s government sponsored. I want to take advantage of this bad-beat housing market. Country Wide is the leading company in this area, but its status look pale compare to FNM. FNM has about 6500 employee, compare to 54000 in Countrywide, and FNM has more equity and income, which makes it highly efficient and low cost and I believe it will rebound faster.

To understand when the market is going to turn upward, we must understand what the current problems are with sub-primes, the root cause – liquidity. In the midst of this crises, investors are lossing confidence, avoiding and dumping mortgage related investments in fear of defaults, which can possibly come from refinance out of lower ARM, lower of house value that yield to a high loan-to-value which negatively affect home equity lines of credits.

With that in mind, here are some signs to look for:

1. Means to prevent default: lower mortgage rates, incentives or regulations that stabilize mortgage rate or shorten ARM and new refinance gaps, increase in borrower credit, and investor incentives to help boost investor confidence levels. 

2. increase in house price, create more credit for equity borrowers.

3. Lower unemployment rate or big increase in inter-city moving to create housing demands and liquidity.

Here is a quote from the newest book I just finished from the one and only, Peter Lynch

”you could make a nice living buying stocks from the low list in November and December during the tax-selling period and then holding them through January, when the prices always seem to rebound. This January effect, as it’s called, is especially powerful with smaller companies.”

consider this in addition to our current correction makes it a worthy opportunity. GRMN, FNM, and CREE are possible candidates for me.

 New Book Review Up: Beating the Street

http://www.oneonian.com/books.php?book=BeatingTheStreet 

I know we should not guess at future market trends because in the end we’ll be wrong about half of the time, and that make us feel like a nincompoop. Nevertheless, I want to start make some educated speculations and in the end, I will keep a record and see so how good I am at fortune telling, hence the new category of speculations.

The FED continuing efforts to lower rates is not enough to stop sub-prime crisis by iteself. What the market need is an internal industrial correction. The recent influx of major investors taken interests in badly beating financials will start a market momentum while easing off the sub-prime problem. We might see another quarter or two of losses from financials sectors, but with increases in numbers from new economic indicators and buyers starting to take advantage of bargains in the housing market and with the influences of the Chinese growth and its next year Olympic games anticipations, I believe the bull is getting ready to charge. My guess? before Xmas.

New Book Review Up: Common Stock Uncommon Profits

http://www.oneonian.com/books.php?book=CommonStocks

New Book Review Up

Titan: Life of John D. Rockefeller Sr.

http://www.oneonian.com/books.php?book=Titan

As I continue to strive to learn, understand, and amend my own investment principles, I come to be more ignorant of market outlooks and those of professional advisors’ opinions and analysis. I understand now why great investment publications such as Outstanding Investor Digest (OID) publish occasionally and only when it finds news worthy of writing. The day to day market news and speculations are irrelevant and better to be left ignored for those long term investors who generally follow the similar principles of Phil Fisher or Benjamin Graham. This is not to say stop reading news altogether. We need to continue monitor those companies related to our stocks with heedful attentions, separate the facts about companies underlying status from the speculations. As I monitor each of my companies, I feel more and more confident about my portfolio. It is not likely for me to alter the compositions within short period of time. As such, I will start to diverge my time from readings of useless columns from the financial forecasts and advisors, and concentrate on studies that will be much more meaningful to my future growth such as study for CFA and Series 7. Until, I identified the next potential company or find something worthy of writing, you can expect fewer entries on my blog page. But please come back at least every quarter to find my new OneOnian Fund Quarterly Reports. Thanks for reading.

http://www.cree.com/xlamp/sample_xre.aspx

Get this, only selected may qualify, and then you will understand why LED is the future.

There is an old saying on Wall Street. True or not, I do not know, I read it for the first time today that

“Bear Owns Thanksgiving, Bull Runs Christmas”

I can understand the Bull part, but why bearish during Thanksgiving? And there is only one month in between. Does this mean last quarter of year is when stock in most gyration? So if it were true, then you can buy in Thanksgiving and sell in Christmas and have a happy new year. hmmm…

GRMN is officially out on the bid war for map makers. I thought it was an expensive and bad take over decision for GRMN in the first place. However it may very well be, GRMN original bid was a strategical move to force TOMTOM to raise their take over price. Tom-tom’s takeover will hardly be profitable financially in itself and having taken over another unprofitable subsidiary it will take some time to recover from debts and etc.  

With some personal exposure to the map industry and incorporated it into strategical systems, I doubt the maps are that hard to make. Some expert suggested maps like Navteq or teleatlas provide would take about a billion dollars and about 10years to make. It might even be less than that. One thing for certain is that by building a map system from ground up, it would save lots money or about 2.3 billions worth compare to the current price tag of TeleAtlas at 3.3Billions from Tom-Tom’s offer. GRMN can now build maps to suit its systems and with likely possibilities of a few intellectual properties in the way to make GRMN products unique.

In the meanwhile, GRMN will still have ample supplies of maps until 2019 with NAvTEQ. Out of this instance, I see GRMN as a dominant player with a smart “head on its shoulder.”

I haven’t post much lately due to readings, research, and a “side attachment”. Titan is a thick book about 700 pages and a time sink, but a rather enjoyable one. I finally finished it after like 20hours of reading spread little over 3 weeks. I will give myself some time to reflect and absorb the life of J Rockefeller before I write its review. In the meantime, I picked up “common stock and uncommon profit” based on Buffett’s references, which should be a much easier and briefer reading than the previous one.

Amid of all my works, readings and writings, I looked into NASD now the FINRA and NASAA exams and licensees. It seems to me, at this point at least, the CFA and NASD series 7 exams ought to be my next near future goals as my desire to to take my financial interests onto the next level. However, S7 requires NASD sponsorship, which I am currently seeking. Free feel to refer or provide this to me.

Side attachment you ask? well let’s just say, the weather lately is cold and rainy, I wonder when the sun will shine and provide some warmth.

Someone asked my option on Market Outlook today, here I posted my reply verbatim 

Tilson Mutual funds (Think the guys over there can help me to set up my own fund?)

http://www.tilsonmutualfunds.com/index.html

Recall what I said previously, that China is going to use its massive reserves to invest in itself?

http://www.oneonian.com/wordpress/2007/09/27/on-the-money-for-chinese-investment-fund/

 well here is an article that just confirmed my predication.

  http://biz.yahoo.com/ap/071108/china_investment_agency.html?.v=5

Of course, now if you could invest in the same companies before China does, demand is going to push the price higher. Like I said before, China is not willing to risk big as it venture into the equity investment arena. It is going to gamble small and invest in Blue-Chip companies and financial institutes. So what’s the biggest company in China? PTR, CHL

OneOnian fund up another 16.10% for month of October Vs. 1.48% gain by S&P500. This brings Year To Date of 79.32% for OneOnian and 6.44% for S&P.

Brought 1 lot of PTR at Market Credit Jitter this morning. No reason for PTR to go down with the double gained IPO in Shanghai.

TNRO is a Chinese steel company in Shandong. The financials are rather weak at current time, but it’s continuing to expand in facilities and increase revenue and net income at a gigantic growth of over 800%. I will keep this under a close watch and keep you updated. for all SEC files look under

http://www.sec.gov/cgi-bin/browse-edgar?company=&CIK=tnro&filenum=&State=&SIC=&owner=include&action=getcompany

As China continues to rampage through the stock markets, far outpacing the underlying economic growth of 12% annual, compare to 500% of increase in Shanghai Index since 2005 (225% annual). No doubt bearish stories will begin to surface. According to my dad, his analytical statistics and pattern studies suggest crash near February of 2008.  We shall continue to monitor the market, and pay special attention to the movements of $1.7 trillion dollars in China reserve.

Here is one link.

http://www.forbes.com/2007/10/25/china-petrochina-baidu-pf-ii-in_hg_1025soapbox_inl.html?partner=yahootix 

http://chinabizfocus.com/modules/InvestChina/