诵十万言 有诗书气

分析

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IT really has been ages since i last post on blog. 

Two things have distracted me from writing here. One, I have now turned the hobby into a day job. So when thinking about stocks 24/7, it is hard to keep the enthusiasm to write blog on the same subject. And two, I am now a micro-blog writer. For those interested, I can be located by searching 'isiah_zhang' in SINA weibo. Guess it does make more sense that if I do end up writing anything re the market, I will keep it shorter. So weibo fits.

What are they

- financial investors focusing on buying and selling private businesses

- comes in all types of specializations, but largely classified as buy-out vs. growth equity

- funds are set up typically 2/20 regime, i.e. 2% annual management fees plus 20% share of the profits made

- fund management company typically set up with rainmakers MDs + execution t

It’s Baby-G Time in China       

Yes, fellows, we are talking about the Generation Next of section G of HBS.

Here in China, since the graduation in 2003(Gosh it seems so remote and unreal now – that’s when names like AIG and Citigroup were still worshipped across the world as American idols and people don’t have to blame RMB exchange rate for all the troubles …),  section G families have expanded quite nicely in China, in particular in the past a few months. So here is a recap from the East:

The Zou’s: [picture omitted]

• Jianming and Haifeng are leading the pack with both a girl and a boy:

• Ann Zou was born on July 23rd, 2007. According to the dad, she “likes singing ,dancing, and teasing her little brother”
• Ian Zou was born on Oct 23rd, 2009. Early on, t

Mr. Vitaliy Katsenelson, an investor author (his Active Value Investing is a pleasant read) was a regular contributor of ideas on GURUFOCUS forum. Long skeptical on the China resurgence story, he attacked again in a neat little article “Chinese Quest for Shortcut to Greatness” on January 28, 2010. Here is what how I read his key points (full article is worth a read at http://www.gurufocus.com/news.php?id=82791):

Ø       Conclusion: “When you pump a stimulus package that represents 14% of GDP through a fire hose into an economy, which was already on shaky bubble foundation, in a very short time you’ll have some serious unintended consequences -- you’ll get super bubbles”.

Ø       Ar

2009 saw me making strides in the game of poker: not only I became more confident and experienced in both strategy and practice, but  I also made commeasurably good money playing 10/20 and also 25/50 cash games. Started with roughly 10,000, I was on a good roll for quite a number of sessions in the middle of the year - ramping up my poker winnings to 80,000 at the peak and thinking that I can continue to win with little difficulty. Then comes the down months. I have been reduced to a losing streak and since given back significant amount of winnings. All in all, I finished with a profit of 40,000 in the yearly tally. Considering the time spent and featuring the transaction fees (cover drinks, etc.), it is hardly anything to boast of.

I have decided to quit poker for some time. Mostly it is due to an important change coming forth in my family

A little-known writer and private investor from Singapore runs a rather insightful blog (http://mystockthoughts.blogspot.com/) that I came across by chance. Independent and practical, he maintained an engineer style of level-headedness and many times offers scintillating thoughts. Lately I have read a new piece discussing “stock investing – picking low-hanging fruit”. Some nice quote:

“Actually in my view, investing is a very simple process compared to most other forms of work in the world. Not making money from investing, mind you, but the process in itself.

… the point to all the above

Let’s boil it down to the core and ask the real question without dogding, which is in today’s China market, what is the best practice/strategy for a value investor with only small amount of capital to work with

-         If we have deep pocket, we will agree that buying large and strong-moat franchise at a fair price (e.g. Buffett’s purchase of Coca-Cola in 1988, or master Wjmonk’s famous recommendation on Maotai in 2004 at 15x PER) and just hold them indefinitely to fully appreciate the power and the benefit of the compound growth of business intrinsic value over time.

-         However, to most people, this is just an answer too correct to follow: With only a small amount of capital in hand and “first bucket of gold” yet

Note: I have appended a recent thread of discussion I involved at Gurufocus.com. In replying to an article on the essence of China's economic growth, some American friends went on to cast doubts on the validity and the sustainability of China's economic model. While a critic of market's blind faith on China myself, I felt obliged to say something to the doomsayers. Hence the thread of discussion edited and quoted...

CHINA GROWTH: NO MIRACLE;GOVERNMENT SPENDING NO LONG-TERM SOLUTION

Posted by: guruek (IP Logged) Date: May 17, 2009 10:38PM

Playing poker and making investments are two biggest hobbies of mine. It is not surprising that that there are many similarity between the two. In fact, the more experience I accumulated at both, the more interested I began to compare the two.

Some similarities are self-evident. For instance in both cases, we are dealing with imperfect information and making decisions under uncertainty.  Both will confuse and mislead novices on skill vs. luck. Indeed, in the short term, a beginner can do every bit as well as a pro - in the go-go days in 2007, first-time speculators in China sneered at 20+% investment return and ridiculed Mr. Buffett who apparently “blew it” when he sold out Petro China shares just before it soared another 50% on re-listing in A market. Also, a novice poker player can sweep the entire table and scoop all the chips, filling