Posts Tagged ‘BIDU’

Google (GOOG) at war with China

By: ispeculatornew | Date posted: 03.23.2010 (4:00 am)

There had been speculation about an outcome for several weeks now ever since Google (GOOG) had announced its intention to stop filtering search results. And finally it happened today, Google took drastic action basically taking action against the Chinese government. It took the step of redirecting all traffic from its Chinese website, to its Hong Kong operations. There users can find an unfiltered search engine in their language. This is a direct attack towards the Chinese government and it did not take much time to generate reactions:

-“This move is totally wrong” – Xinhua (Chinese official news agency).

-“They stressed that foreign companies in China should abide by Chinese laws, and if Google is willing to abide by Chinese laws, we continue to welcome it operating and developing in China. If Google insists on dismantling the search service of its Chinese website, that is Google’s own affair. But it must follow Chinese law and international custom, and responsibly handle the aftermath.” – Chinese Official

Google carefully explained its decision on its own blog. This was not a mistake, not an error, it was a carefully planned move, that had been discussed with the US government with even Barack Obama being kept informed about the process that led to this outcome. What’s most clear is that this is a bold move. No matter how powerful Google might be (and it clearly is very much so), this is a bold move that could have massive implications for internet users in China as well as all companies involved in the Chinese market.

It is an interesting strategy because it is not illegal. The Chinese website owned by Google does not display unfiltered results, which would have made it easy for Beijing to kick out the internet giant. But let’s face it, the result is the same and the ball is now in China’s camp. It can now either block Google and deal with internal problems or a less likely scenario would be for China to now compromise or be more flexible with Google. How likely is that to happen? I’d say almost impossible. China considers itself a world power and surely hates to see Google challenge its power right now.

The winner?

Of course Baidu right now is looking like a very bright star. There is no doubt that the Chinese government will be on Baidu’s side in the near future. I had been hesitant to take a position on Baidu but I’m getting more comfortable with the idea and might become even more so when it becomes more clear how the Chinese government will react to Google’s recent challenge…

A good ending to the year… (2009 stock picks – final update)

By: ispeculatornew | Date posted: 12.31.2009 (4:00 pm)

Last year, as I was preparing my picks for this competition, one of the big questions I was asking myself was if I should go for a homerun or not. The best way to go for a homerun is to build a scenario and take all 4 picks according to that scenario. Of course, if things go right, you will be very difficult to beat. But that also leaves little margin for error. A few of other contestants did just that, especially around oil prices. I also felt like oil would go up (hence my pick of USO) but was not convinced enough to put everything on that bet. And I am glad I did!!

As you can recall, I did take two companies based on economic scenarios, GLD and USO, as I expected gold and oil to rise in 2009 as fears of inflation and economic recovery regained traction. Turns out I was fairly right on both counts but that is not how I ended up winning the stock competition.

Rather, I won the competition by taking two tech stocks that I felt were much undervalued, Baidu and Ebay. Both of them enjoyed terrific returns as Baidu continued to fend off Google’s offence in China. Meanwhile, not much good news came out of Ebay in 2009 but the stock had been beaten up so badly that it actually did perform very well in the year.

Given the stock market returns this year (S&P 500 = +24, 36%, S&P/TSX = +30, 23%), any stock pick above 20% would be considered somewhat of a success:

So here is the recap for my 4 stock picks:

GLD (ETF on Gold)        +24, 01%

Gold has been discussed so much in recent months as it was able to rise well above the psychological 1000$ barrier. I can’t say I’m unhappy with this pick as it was also good protection in periods of downsides in the markets.

USO (ETF on Oil)           +18,67%

Actually happy this one did not perform too well. Other contestants had big bets on oil so a major spike in oil would have helped my performance but would probably not have helped me stay at #1 in the rankings!

EBAY (online merchant, owner of Paypal and partial owner of Skype)         +68,62%

I don’t consider that Ebay did much in terms of improving things in 2009. In fact, getting partially rid of Skype was major mistake and if they do get rid of Paypal as has been discussed, that would be another major mistake. Paypal has a dominant position in the exploding electronic payment systems market and if they do innovate quickly enough, it could mean some big numbers in the future.

BIDU (search engine, ranked #1 in China) +214,95%

Baidu got slammed because it was caught selling ads without notifying users and sometimes even tricking users. But as I had expressed, Baidu operating in China is a major difference and the way it abides laws should not be compared with how US companies such as Google must do so. Of course, that makes it very difficult for Google to compete when it cannot offer illegal downloads to compete with its Chinese counterpart.

In a few hours, I will announce my picks for 2010; hopefully they can do as well!

Here are the results of my fellow competitors!

SymbolNameSectorMarket CapDVD YieldP/EPayoutEPS BasicRevDVD Growth
BAXBaxter InternationalHealthcare22.2$B2.136923.0994.01-5.94-4.941.48
BLKBlackRockFinancial Services56.4$B2.599717.1744.1313.415.7716.87
DISWalt DisneyConsumer Cyclical159.8$B1.398818.27#N/A19.276.6338.91
GNTXGentexConsumer Cyclical4.5$B2.144714.4530.4617.1213.598.77
UNPUnion PacificIndustrials68.8$B2.707414.8149.1214.75.1627.42
HASHasbroConsumer Cyclical9.7$B2.359621.8649.975.432.1313.76
HPHelmerich & PayneEnergy6.8$B4.338229.44126.7521.6911.0467.27
JNJJohnson & JohnsonHealthcare297.2$B2.785319.6353.042.772.626.93
LMTLockheed MartinIndustrials66.3$B2.902618.9453.597.970.218.43
DISWalt DisneyConsumer Cyclical159.8$B1.398818.27#N/A19.276.6338.91
MCDMcDonald'sConsumer Cyclical109.6$B2.86325.2771.320.941.098.77
PEPPepsiCoConsumer Defensive146.4$B2.773727.5674.1-1.261.747.89
STXSeagate TechnologyTechnology10.7$B6.469418.4111.3210.873.8127.83
TUTELUSCommunication Services18.5$B4.230117.1471.422.480.66.35
VZVerizon CommunicationsCommunication Services214$B4.245212.0247.7537.174.312.99
WMTWal-Mart StoresConsumer Defensive215.1$B2.932914.747.730.442.7110.13