Follow up on KONG’s pre-ER run
As I predicted two days ago, KONG (KongZhong Corp) did pop up nicely today, up almost 10% from $5.75 to $6.4.
This was partly due to one of its major competitor LTON (Linktone Ltd.) raising its 4Q revenue guidance. Now I’m more interested to see what’s gonna happen for KONG on its ER day next Tuesday.
Charts talk
Q1: Will history repeat itself?
I have closed some of my long positions (CHL: China Mobile) and increased hedging (FXP: UltraShort Xinhua China 25 Proshare and QID: UltraShort QQQ ProShares). There could be a short-term rally, however I believe the long-term sentiment is still bearish.
Q2: KONG is breaking out?
No doubt! With less than a week to its ER on March 4, KONG (KongZhong Corp.) is having a nice run north, up about 14% in two weeks. Bullish thinking: a solid company, lots of cash, persistent and experienced management, and the rumored upcoming release of 3G licenses in China. KONG is one of my favorite small-cap in China, and I will write more about it later in a separate post.
Disclaimer: I long KONG.
Facebook et. al. losing their steam?
According to a report from BusinessWeek, social network sites seem gradually losing their steam.
Here’s a 50-words version:
- The good: Global ad spending on social networking sites in 2007 was up 155% to $1.2B. It is expected to grow 75% to $2.1B this year.
- The bad: According to ComScore, the average amount of time each user spends on social networking sites has fallen by 14% over the last four months.
- The ugly: No killer app to advertise and monetize social networks yet; click rate is about 4/10,000 vs. 20/10,000 on the Web. People on MySpace and Facebook et. al. are more interested in interacting with their friends than clicking on ads.
Your thoughts?
Giant Interactive, Giant Lesson
Giant Interactive (NYSE:GA) is the MMO gaming company founded by Mr. Yuzhu Shi. Shi has been a colorful figure in mainland China since the 80s: he got his first barrel of gold in the then-booming Chinese IT sector, became one of a few early millionaires in China, went bankrupt, came back selling healthcare products, succeeded again and paid off his debts. IMHO it is indeed a miracle and Shi is quite a character. So, when GA IPOed on Nov. 1st, I purchased some shares in the belief that Mr. Shi would be able to make happen another miracle.
Unfortunately I’m proven wrong. Today the quarterly ER of GA is released and the numbers are not as good as they are expected - especially the Q-over-Q growth of its game, ZT Online, so far the only bread-and-butter for the company (although they are reportedly to have two news games in the pipeline).
Investing in GA, I violated my own principles of investing and was betting purely on speculations. Well, taking a moderate loss, I get my Giant lessons learned the hard way. As Buffet says, “if you don’t feel comfortable owning something for 10 years, then don’t own it for 10 minutes.”
Roth vs. Traditional IRA
A nice comparison posted on Yahoo Finance, Oct. 17, 2007.
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A Roth seems like the obvious choice over a traditional IRA since it has tax-free withdrawals. Not always, says Walter Updegrave.
Question: If you contribute to a traditional IRA, after many years most of your account value will be in the form of investment earnings, which are taxable when you withdraw them. With a Roth, on the other hand, your balance will be tax-free. So it seems to me that the advantage of tax-free withdrawals from the Roth in the future greatly outweighs any tax-deduction benefit you get from a traditional IRA. Doesn’t that make the Roth a better deal?
Answer: A lot of people aren’t quite sure how to assess the value of contributing to a traditional IRA vs. doing a Roth. That’s not surprising, given the number of factors that can affect which is the better choice for a given person in a given circumstance.
Generally, I think having at least some money in a Roth IRA (or Roth 401(k), if that option is available to you) is good idea for several reasons. But before I get to them, I’d like to step back and explain how both traditional and Roth IRAs work in a way that, I hope, will give you and others a better understanding of them and help you decide which type to fund.
My “Oil Play”
I’m a fundamentalist in investment, and always do my own DD before committing a buy or sell order. I also believe in value investing, often on the hunt for excellent stocks that are temporarily undervalued, or are simply hammered due to a market slide.
Recently I’ve been looking at Bolt Technology Corp (BTJ), a company that specializes in technologies and devices of marine seismic energy exploration for the oil and gas industry. Its fundamentals are strong, with a lower-than-peers P/E, good cash reserve, and zero long-term debt. Considering the recent run in the energy sector, I think BTJ has great potential to go up, esp. with its ER coming up next week.
In the long term, demand for energy will only be higher and higher. Furthermore, investing in companies such as BTJ avoids the risks of directly buying into the oil companies, of which the stock prices usually have larger fluctuations.
Let’s wait and see what will happen for BTJ in the coming weeks.