jasonw1

Now we can at least rest the argument that company is not returning money to shareholders. Regarding to Yahoo buy, I thought it was an insanely expensive deal initially, it's more a desperation of the leader at that time, good thing the deal didn't go through and he's left the post, with a more capable person running the online service division now. But Yahoo actually has some really good assets so even the deal went through it shouldn't be a disaster either. The 40% stake Yahoo has with Alibaba holding (could worth $10+ billion), 34% in Yahoo Japan, search deal with MSFT-- getting 88% revenue for essentially nothing for 10 years, and the operating business. I think Yhoo is a great value play at the moment. http://www.marketwatch.com/story/asian-assets-likely-a-hot-topic-at-yahoo-meeting-2010-05-25

Since 2005 the company has bought back shares and reduced total share outstanding from 10.8 billion to 8.8 billion, raised dividend to 0.52/share. Revenue and profits are still growing although at slower pace, from 32 billion in 2003 to 62 billion, net income from 10 billion to 18.7 billion, with profit margin ~30%. One thing killed the stock is the contraction of P/E ratio, from 40X in 2000 to 10 today, but I think at some point it's going to stop. From technology risk point of view, I don't think MSFT is any riskier than any other tech companies. On top of Windows/Office, there are server and tools which generates as much revenue as Windows, search and online services is turning around, with the right leadership in place and with Yahoo deal they will be a credible competitor, market will support a competitor and having a choice, there is no other players who can affort this game anymore so we'll most likely end up with two main players each of them making decent profit. There are very few tech companies with such diverse set of business and deep moat. Google? really a one trick pony, the company has made no money outside of search and ads. Apple? what if they have another incident more serious than "attenna gate" and iPhone loses its lust? what if they lose Steve Jobs? The company's failure in mobile and tablet and consumer devices have overshadowed its success in other areas, but that's just a wild card. If it works out the stock would be a double, if not I would still expect 10+% annual returns.

Dividend reinvested in the stock? Simon raising bids for General Growth? It's thinly traded, it doesn't take much to move the price

I don't know what to make of this. It probably has something to do with Chinese government raising capital ratio for banks a few times in the past several months.

Talking about checklist, what are the items on everyone's checklist?

That sounds too good. The question is how long can they keep it that way :) You may want to find out how Rupert Murdoch dealth with this tax issue, otherwise he sure seems lost quite a bit when he acquired US citizenship. http://en.wikipedia.org/wiki/Rupert_murdoch#Acquiring_American_Citizenship Acquiring American Citizenship In 1985 Murdoch became a United States citizen to satisfy legislation that only United States citizens could own American television stations. This also resulted in Murdoch losing his Australian citizenship.

Yes I "heard" even that IRS may still come to you for several years, until it's clear there is no US ties.

I'm currently living aboard but need to file US tax (going through it right now), hereis what I know. 1) If you're a US citizen or resident, your world-wide income needs to be reported to IRS and taxed. There are foreign earned income exclusion and foreign tax credit, but it's relatively small sum. 2) Your property and bank account overseas, if they're >$10,000 at any given point of the past year, will need to be reported to Dept. of Treasury by US law.

view from another angle http://finance.yahoo.com/news/China-Real-Estate-Bubble-a-tsmf-3005546357.html?x=0

Eric, I use fidelity too but haven't been able to figure out where to get the rate of return #. Now if only I can figure out how to get the same kind of returns :D

If you're looking at Chinese smallcap, for the similar PE as CSKI, you can find stocks growing >30%, CCME, SKBI, LTUS, LPIH, to give a few names. I own a basket of Chinese smallcaps, don't have CSKI, but own all the names mentioned above.

Another idea to consider is ENZN Total market cap of $455m $500m cash - $134m debt + royalty business + pipeline royalty business is probably worth ~250m and you get the pipeline for free, which could be worth another couple of hundred $m The catalyst is you have Baupost and Icahn as big stakeholders pushing for change, just sold the manufacture business for $300m and ousted the CEO This could be a similar liquidation/sellout play like FACT

I decided to avoid the uncertainty and just use the common shares. Thanks for the information!

Eric, nice call on Citi. Your options are certainly doing very well! Unlike many other value investors who often fall into value trap and end up holding undervalued security for a long time, I found Berkowitz's not only great at fundamental analysis, he's also great with getting the "catalyst" and his timing, his BRK and Citi purchase were right on the rhythm.

Let's say I have call option on a 10$ stock, and the company is planning to hand out a one time, special dividend of 3$, what happens to the option price? Will it get adjusted for the 3$ or option holders just get screwed? Where can I find out this information? Thanks

For the deep in the money LEAPS, I find it's actually better to convert to shares now, as there is no time premium for them, and you lose $10 dividend if not converting. The bid/ask spread is also pretty wide, ~10$, so it's not worthwhile to sell it either. I just coverted my 2011 LEAPS. Only thing is you need to put in extra capital to get the actual shares.

The selling by Gates foundation is 3~5% of daily volume for the past several months, I think the consistent selling has had a negative effect on the share price, not sure how much though. Why would they sell so much? It's not that foundation needs the cash now, and Gates has said something like he sees BRK share price go much higher.

Kindle itself is just a cool gadget, there are other devices which can do similar things, but the end to end experience is not nearly as good as what Amazon offers. Amazon's competitive advantage in this space is its Kindle + Kindle store, the book selection, and the end to end user experience. No other company can match that yet. Think about iPod + iTune, there are tons of MP3 players which can play music, but none of them offered the same experience, and none reached the same scale like Apple.

Does anyone know what happens to FFH LEAPS after its delisting from NYSE? I called my broker Fidelity but they don't know for sure.

Should be more than that, probably 60K/year for 40 years Anyone know where to find how much JNJ's fortune or stock is controlled by Johnson family and their heiress? I hope they don't have any say about running the company.

What would happen to ORH preferred? Are they going to be redeemed at $25 as part of the deal?

Japan is a special situation, I can't think of any other country which has prolonged deflation (20 years) in the modern world (last 100 years), while you can find plenty examples where inflation runs wild. As we discussed in thread on WEB's recent article on NY times, inflation is a natural tendency for any goverment to have. It started with Romans when they were still using gold as currency, they would scratch some gold off the gold coins collected as tax, for example the original 1 ounce coin now only contains 0.95 ounce of gold, but they would put the gold coin back to circulation as if it's still whole, and combine the 0.05 ounce of gold together to make additional new gold coins. If the Romans can create more money with gold coin as currency, it's just too easy for modern goverment to do something like this. And why not? I would say all governments would like to spend a little more than what they actually have, inflation also creates an illusion that things are progressing, citizens would feel pretty good when their wages and asset prices go up 3% a year, not many people would care so much that it's 2.5% inflation and 0.5% real growth, politicians and policy makers around the world are quick to figure out this is an easy way to keep things looking good on paper. Now why Japan is such an exception? I've been puzzled by the prolonged deflation in Japan for quite a while, I haven't seen any explaination which I can understand and it makes sense. A few factors I think are unique to Japan and probably caused this long deflation: 1) the asset bubble (RE and stock) in Japan was at a different scale than the bubble in US. It's way worse than US, at the high of it, the RE value of Tokyo was more than the RE value of whole US. Stocks were having triple digit PE on average, in short, as pointed out by 20ppy, it just become too big of bubble to be overcountered by inflation, even you run 7% inflation (it would be really hard to run 7% without cauing mass fear and runaway inflation), you can only inflate ~400% in 20 years, which isn't enough for the bubbles they have. http://en.wikipedia.org/wiki/Japanese_asset_price_bubble 2) Japan would be the last country having the incentive and will to run high inflation like 7%. Why? It's a country of net saver and creditor, it's a country where older people are respected and dominated policy, mass inflation will impact the savers (older people) most, and they don't want to see their national fortune vaporate just so easily. Culture and pride also have some effect as well. I don't think US would repeat Japan, for the exact same two reasons: housing at 4-5 times of annual household income is still one of the most affordable in the world, stocks by most standards are at "fair boring" prices. We mostly have an inventory excess and over-leverage problem, but not a huge asset bubble at this point. And as a net debtor and little savings, US doesn't have much resistence to inflate, as matter of fact, all the smart policy makers know it's in the best interest of US to inflate, the burden of the trillions of foreign and public debt just become so much easier to handle. The trick is to do it gradually without scaring off debt holders (both foreigh and domestic) and crashing USD and US treasury.

That's exactly what I did last fall, refinanced and took out a bigger mortgage, and started loading up quality and dividend stocks.

Yes I saw the article and had some comments on that thread of the board, not that I prefer inflation or deflation or anything, I just think "inflating our way out" is the most likely outcome, and trying to figure out how to position as an investor. When everyone is worrying about deleverage and debt implosion, the picture is actually much more complex, with multiple different forces at play. If you buy into this inflation thesis, it's actually good to have debt before high inflation hits, the individuals/companies which are leveraged and can survive this round, like RE investor/companies, they will come out of this and look good.

It's true people spend a lot more on food and things Westerners may find "strange", I think it's more to do with culture, food and Bai Jiu (hard liquor) are a huge part of culture, history, business and enjoyment, not like US dominated by "fast food"/fast nation culture, gourmet food is appreciated and enjoyed, especially in China, HK, and Taiwan. My observation and experience with other luxury goods are different though. People spend a huge amount on housing and view property ownership more than on simple economic terms, everyone wants to have a place of their own, thus push property price to crazy levels. For example, in China it's common to see people buying a property which is 10X their household income. For luxury goods like expensive cars, cool gadgets, watches, perfume, handbags, people just snap them. Do you know anyone in US who spend 2 weeks salary for a cell phone, or 1 month salary for a handbag? There are plenty of them in China. A year ago I read China has become the 2nd largest market for luxury goods worldwide, people seem to have so much money (sometime can't really explain how they got it) and very optimistic, so they spend a lot.