Continuing to watch Sony Corp.

I wrote an earlier article on SNE, Sony Corp. discussing the company’s technological gamble on its Blu-ray high definition DVD standard. I mentioned in the article that I like SNE at under $30 within the next 3-6 months. The stock is currently trading near its one year low of $31.80 and we may very well see the stock hit under $30 as Microsoft launches the XBOX 360 this month and Sony faces uncertain adoption of its next generation DVD format. If SNE does trade under $30, I will probably rebalance my portfolio to include shares of the company.

Purchasing W Holding Co. Inc.

I purchased an additional 1000 shares of WHI, W Holding Co. Inc. at $7.90 today. I purchased 1000 shares of WHI at $8.98 on October 6th, 2005. My average purchase price for WHI is $8.44. I wrote this earlier analysis of WHI. My price targets remain the same. I intend to purchase a total of 3000 shares of WHI. If the stock trades below $7 I will purchase an additional 1000 shares.

Baidu.com Inc. earnings report

So the moment Baidu.com Inc. investors have been waiting for is over. For Baidu’s first quarter as a public company, earnings, before stock compensation expenses, were only a penny above analyst’s expectations. I continue to believe that the price of BIDU is well over inflated and prone to wild price swings. I haven’t seen anything like BIDU since the .com days that erased the fortunes of many investors. At BIDU’s closing price today, the company is valued at 2.62 Billion or 13.1 times the entire 2004 online search advertising market in China. For comparision, at Google’s closing price today, the company is worth approximately 11 times the entire 2004 online search advertising market in the United States. Google is a far more established company with stellar earnings reports quarter after quarter. There’s no reason for BIDU’s stock price to go as high as it has other than speculation and greed. The potential online seach advertising market in China hasn’t materialized yet. GOOG is trading based on a $9 Billion online search advertising market. BIDU is trading based on a $200 Million online search advertising market.

BIDU is trading around $68 in after hours trading.

Baidu.com Inc. set to go up today

It appears that BIDU will jump up today. I wouldn’t be surprised if the stock breaks $90. BIDU is trading purely on speculation and greed. One important thing to consider when evaluating BIDU’s current stock price is that the entire online advertising search market in China was $200 Million in 2004. This will limit BIDU’s current revenue stream, unless the company diversifies beyond online advertising search revenue.

RawGreed Market Recap and Direction

We ended the day on a strong note and the market closed up. Oil appears to be down and will likely drop further before a rebound is in sight.

Today:

DJ Indu 10,385.00 169.78
Nasdaq Comp 2,115.83 33.62
S&P 500 1,199.38 19.79

Today:

Baidu is the primary catalyst driving my portfolio down. I will continue to wait and see what happens after Wednesday’s earnings report. I continue to believe that the company is trading mainly on speculation and greed over the potential of China. Baidu is also basking in the afterglow of Google’s strong earnings report. If BIDU trades in the $100 range I will short additional shares of the company. The lower prices in oil have added some momentary stability to the market, but investors are cautious over global bird flu worries and additional, possible, FED rate increases this year.

Tomorrow’s forecast:

5 day forecast - What I’m watching out for:

I expect the market to stay strong with a possible dip as investors take profits in the middle to the end of the week. I expect gold to reach $470, oil to drop and airlines to go up. I see Asia Pacific airlines, like Cathay Pacific and Japan Airlines, to go down over bird flu and tourism concerns.

Baidu.com Inc., RawGreed Award Winner of the Day, Again

BIDU, Baidu.com Inc. is at it again. The stock is trading heavily up today. I shorted BIDU at $110 and again at $82.50. Baidu has no earnings history and the research arm of Goldman Sachs, the underwriter of Baidu, priced the stock at $40. Baidu is trading purely on speculation over Wednesdays anticipated earnings report. I urge readers not to get caught up in the hype. It appears to me that analysts are guilty of translating the word China into profit.

I wrote this earlier article on Mary Meeker and her bullish reports on China Stocks.
I wrote this earlier article on China Stocks.

I encourage readers to go over both articles before investing in any China stock.

Here’s an interesting article that mentions Baidu called 2 Things I Learned From Benjamin Graham.

If BIDU somehow jumps over $100 I will short additional shares of the company.

RawGreed Weekly Review and Predictions

The market ended the week mixed.

Today:

DJ Indu 10,215.22 -65.88
Nasdaq Comp 2,082.21 14.10
S&P 500 1,179.59 1.79

Next week, what I’m watching out for:

Gold’s been down, I expect to see gold back to $470 levels. I expect LU to break $3.20 and I am expecting TSM to break $8.10. I am bullish on TSM at current prices. I will purchase an additional 100o shares of WHI if the stock trades below $8.

*Disclaimer: I own 8000 shares of LU, 4598 shares of TSM, and 1000 shares of WHI.

Google to $400?

GOOG, Google Inc. provides Web search and online advertising services on the Internet. It offers advertising solutions and global Internet search solutions through its Web site, and Intranet solutions via an enterprise search appliance. The company’s products and services include Google.com, Google AdWords, Google AdSense, and Google Search Appliance.

Google seems to follow the old .com mentality of trading heavily on future earnings without a long track record. There are many reasons to be excited about the company. Google has great technology, it has some of the brightest minds working for the company and future growth looks good. Google reminds me of Microsoft in its early days. They key difference between the two companies, is that Microsoft shortly established itself as a platform where people were unable to use their PC’s productively without the Windows OS. Google is also a platform, but there are viable alternatives in the search space. If Google can create some differentiating technology or service that users can only turn to Google to use, it will create a stronger user base that will trickle over to all of its services.

In the short-term, advertising spending seems to be going up and Google should enjoy strong holiday revenues. If Google is added to the S&P 500, I see the stock headed to $400. The risk to Google is the growth phase they are in. The stock price has risen so quickly that if he company releases any bad news, it will have a large impact on the stock price unlike a more established tech firm. Speculation on Google is also very strong. I do see the stock breaking $400, but longer term I expect the stock to drop down to more reasonable levels as revenue becomes more predictable.

Watching Gap Inc.

I’m watching GPS, Gap Inc. The company operates as a specialty retailing company. It offers casual apparel, accessories, and personal care products under the Gap, Banana Republic, and Old Navy brands.

I like GPS at under $15. The stock is currently trading at $16.11. The price of the stock has been driven down by downgrades, a slump in same store sales and concerns over competition from discount retailers WMT, Wal-Mart and TGT, Target.

Gap has a strong record of revitalizing same store sales by launching innovative marketing campaigns. Some of you may remember Gap’s use of Swing music to promote its Khaki’s or signing up Missy Elliot to promote the brand. There are many positive points for GAP’s future. Cash is strong, the company has announced a new designer for its GAP brand, and the company will launch a new line of clothing targeted at women 30 and above.

I will continue to watch the stock before posting my analysis and price targets.

RawGreed Weekly Review and Predictions

Among the speculation and predictions I reported on here’s what panned out:

Apple announced a video iPod, but not in the form that most speculators had predicted. Rumors pinned Apple at launching a completely new device that would be sold side by side with the audio iPod. Instead, Apple is planning to integrate video functionality in the existing iPod. The new video capable iPod’s will launch with 2.5″ color LCD screens and larger hard drives. I believe this is a smart move on Apples part. The manufacturing cost of the iPod has decreased since the products launch, but the retail price of the device has remained stable. Integrating video functionality will allow Apple to extend the lifespan of the iPod line of devices.

Apple’s customers are fickle when it comes to design. My only speculation with the move to integrate video is the form factor of the iPod device. The iPod is as much a lifestyle device as a functional device. The iPod has always been a seen to be seen product. Risk comes to Apple if it fails to alter the form factor of the iPod and merely throws a 2.5″ screen into the product. The size of the iPod is beginning to show its age. Adding a 2.5″ LCD screen is a smart move, but the company will likely make additional headway with the design of the device prior to its launch.

SWKS, Skyworks Solutions Inc. dropped to the range of $5-$5.50. I still believe the sell off is overdone. I will watch the company till Tuesday to see if the price of the stock remains stable. There must be something else driving the stock to lose so much ground. SWKS traded as low as $5. The announced shortfall in earnings should not have caused the stock to drop over 20%. I believe short sellers have pushed the price of the stock down. I see SWKS rebounding to at least $6 as short sellers cover their positions.

On the market:

Things panned out pretty much the way I posted it would. The market started out down and we were able end Thursday mixed and slightly up on Friday.

Yesterday:

DJ Indu 10,287.34 70.75
Nasdaq Comp 2,064.83 17.61
S&P 500 1,186.57 9.73

I really don’t trust the short term direction of the market. It appears to me that the majority of investors are completely unclear what direction oil will take and what the long term effects of Katrina will be. Combine the uneasiness of what a possible Bird Flu pandemic will bring to the global economy and you have a market that will drop in stability for the short term. Short term speculation will vary with dependence on earning reports, but a market wide cautious attitude will not create the stable environment needed for stocks to gain ground.

Prices are low for many stocks and I would look at this as a buying opportunity. Stocks like SWKS mentioned above have dropped heavily on speculation.

I expect the market to start off up and end down next week.

For CAL, I am revising my target buy price for next week to $10.50. I don’t see the company dropping to $10 unless oil does a dramatic reverse up.

Lucent Technologies Inc.

I submitted an order to purchase 3000 shares of LU, Lucent Technologies Inc. at $2.95. Lets see if it meets my price target today. I believe the price of the stock is very low. I wrote an earlier post with my analysis of LU, located here.

RawGreed Market Recap and Direction

The market was mostly mixed. Let’s see if we can end the week up as I had predicted in my earlier 5 day forecast.

Today:

DJ Indu 10,216.59 -0.32
Nasdaq Comp 2,047.22 9.75
S&P 500 1,176.84 -0.84

Today:

Tomorrow’s forecast:

5 day forecast - What I’m watching out for:

I believe additional positive earning reports will temporarily lower speculation. Prices seem relatively low for technology stocks. I especially like a few opportunities in semiconductors. SWKS, mentioned in an earlier posting, has hit my price target of $5-$5.50. I am considering purchasing the stock. CAL traded as low as $10.61 today. My target buy price of $10 remains the same. Next week I believe stability will continue to go down, oil and gold will rise.

Headed to Beijing

Today I’m leaving for Beijing and will update RawGreed remotely. I encourage investors and readers to take advantage of my picks this week. I am especially bullish on LU and NT. It also appears that SWKS has hit the target buy price I set two days ago. The sell off has been quite severe. I will be watching CAL as I expect oil prices to go up this week. My target buy price remains unchanged at $10.