Solar Buildings Become Reality?

Check out the link below:
http://www.xprn.com/pr/09/01/09010411-1.html

Suntech (NYSE: STP) has built in solar panels into their front facade of their new HQ. The array, which can generate up to 1 MegaWatt, is plugged into the local electrical grid. The company claims to be the world's largest photovoltaic (PV) module manufacturer and I think they are today.

Just something to think about as the green revolution starts to take hold in the next few years. Architechts will have the capacity to build buildings that will generate MORE power than they use as technological advances in solar power will enable this to occur. Obviously having such a large solar exposure helps. This probably wouldn't be as beneficial in NY, NY :)




Dan Ross
http://www.DanRoss.info/

Gary Shillings (author of Deflation) prediction for 2009

Gary Shilling, president of A. Gary Shilling & Co, and his prediction for 2009.

Please note that he wrote a book called Deflation, in 2001. He's been crying wolf for quite awhile but his prediction eventually came true. In the attached videos, he predicts S&P 500 at 600 ($40 in EPS for the combined companies and a 15 multiple). I think he might be too pessimistic .....My bearish scenario is 650 to 700 on the S&P500.



In this follow up video he says that China's middle class isn't large enough to absorb the decline in exports and, as a result, there might be social upheaval in China. I've already seen people flipping cars near police stations in China so I don't find this to be a big surprise.



A noted and notable bear, Shilling predicts the following will occur unless drastic action is taken:

Average U.S. home prices will fall another 20% from current levels, bringing the peak-to-trough decline to 37%. If prices ultimately do fall 37%, 25 million Americans — or about 50% of all U.S. homeowners with a mortgage — will be underwater, meaning their house will be worth less than their mortgage.
Millions of Americans won't be able to make mortgage payments, even if they're able to refi at today's low rates.

Shilling also indicates that there is too much supply vs. demand of homes. As a result, he proposes giving more H-1B visas to attract more highly skilled immigrants, who can then purchase homes, to absorb some of the inventory. My question is "Do H-1B visa people, who don't really have any sense of permanence here in the U.S., purchase homes?" I think I am qualified to ask this question as I gained my U.S. citizenship in July this year (long time procrastinator). On another note, my father worked 30 years + as a Sr. Exec for a major telecom equipment companies and was a HUGE user/supporter of H-1B visas over his years when they needed people with the right skillsets.



Dan Ross

China Cuts Rates by 1% - Most in 10 years!

So the Chinese are stimulating their economy by spending nearly $600 billion by the government (announced last week and posted here on the blog).
http://betterbizbooks.blogspot.com/2008/11/chinese-economy-slowing-down-quickly.html


Now they are trying to stimulate their local economy by encouraging more lending. People will be paid less to save so they will need to invest their $$$ (both banks and individuals). As I have pointed out, China's economy is 50% export based so their economy gets beaten up pretty good when Americans stop buying stuff due to the credit crunch and concerns about their economy. Will it spark increased spending amongst the Chinese consumers? Time will tell....I am not holding my breath though :)



Dan Ross
http://www.betterbizbooks.com/

Retail Growth in China - Street.com Picks

Interesting take as the two suggestions are Guess and American Apparel, not Chinese retailers per se. I would focus on Chinese brands growing nationally as that is where the ENORMOUS growth opportunities are. Don't get me wrong. The Chinese middle income people will want GLOBAL brands like Guess / American Apparel but the opportunities are MUCH more limited than domestic companies and these companies have TONS of exposure to the U.S. economy and, I would think, the goal of this interview would be to get exposure to the Chinese consumer/retail growth.



Dan Ross
http://www.BetterBizBooks.com

Chinese Investing - Wind Power

So by now anyone reading this blog nows how bullish I am regarding the Chinese economy in the 21st century. I think their work ethic is 2nd to none, their economy is still in its infancy, there are TONS of geographic/trend plays still ripe for the picking and a middle class that is JUST NOW developing. I compare it to the U.S. in the 50s/60s but with the potential for wealth creation of the U.S. in the 80s as geographic expansion occurred.

If you are a growing economy you need more power. You get it from coal, nuclear, wind, solar, etc. Coal drives something like 70% of U.S. power. The Chinese have done this as well but their pollution controls haven't been as strong as ours. They have been focused TOO MUCH on low cost stuff up until now. With the growth of their manufacturing sector, their environment is in SHAMBLES.

So they are increasingly turning to solar power and wind power, which they hope to export to the rest of the world later one. One way to play the "green revolution" with a strong China focus is APWR (A-Power Energy). Something to look into....Due your DD.







The weekly trends still appear downward for now but the short-term charts are pretty flat. You can see from the MACD curves that there is potential for a HUGE breakout at some point. The 10 week moving average is still coming down but it is at $9.00. An 80% bounce could happen and then get SLAMMED by the market quickly. I think I'll keep on building my cash balances and put some $$$ to work with APWR early in 2009. Same goes for Gulf Resources, which is now consolidating but the weekly trends are still coming down. That stock appears further along in its consolidation pattern and next week should indicate a crash of the stock or a potential run as the stock is now trading RIGHT AT the 10 week moving average. It is Overbought on the daily charts but NOT on the weekly charts :) We'll see which trend is more powerful....

Dan Ross
http://www.BetterBizIdeas.com

Still cautious on the stock market despite intraday reversal here

So here are a few articles I have come across in recent days as well as observations

http://seekingalpha.com/article/105472-why-i-sold-my-china-positions

1) Nortel, JCPenney & Pizza Hut all had layoffs here in Dallas.

2) American Express became a bank. They now get access to the gov'ts coffers via discount window and can sell their securitized credit card balances to the government. They get liquidity. WOW!

3) There is more push to get these auto manufacturers part of the bailout package. Did you know that GM, less than a decade ago, paid out dividends & bought back stock worth $20 BILLION? If you knew that, how would you feel about bailing out the auto manufacturers, investors and unions? If they didn't pay out the cash the unions would have taken it via DEMANDING higher wages for an "honest day" of work.

Which then brings me to this CNBC/LinkedIn.com poll. Looks like most American's, by state or career path, don't agree with the auto manufacturers getting one penny....

http://www.cnbc.com/id/27593480/

4) Finally, unemployment / weekly job claims data today stunk. Below are some graphs re: unemployment and the trends. With every passing week and datapoint I see (lots of new data) I get more adamant that 10% unemployment is possible.

Dan Ross

http://www.BetterBizBooks.com/

Chinese Economy Slowing Down Quickly

http://blogs.barrons.com/techtraderdaily/2008/11/10/focus-media-warns-on-slowing-china-ad-market-stk-falls/

It wouldn't surprise me to see Chinese stocks down notably tomorrow. After the bell, an industry stalwart (Focus Media) and big chinese holding of many mutual funds/hedge funds announced they are missing guidance slightly this quarter but guiding down EPS estimates SIGNIFICANTLY for next quarter.

Which begs the question.....How much is the Chinese economy slowing down? Will even 5% growth happen next year? Is their stimulus package enough? How much will Google's stock price fall since their EPS is based on advertising as well. Yes, this is China vs. the U.S. but people have been hearing rumors about a slowdown in online advertising spending and an "informal, unofficial" hiring policy per the video below.



Dan Ross
http://www.betterbizbooks.com/

China's $586 billion stimulus package announced today

Today China announced a $586 billion spending package to boost domestic demand while vowing to carry out "moderately easy monetary policies." China's Cabinet has approved a plan to invest $586 billion on infrastructure and social welfare by the end of 2010. They also say they will adopt an "active" fiscal policy and will offer tax help of 120 billion yuan to enterprises.



Key Questions/Points:
1) This dwarfs the $150 billion amount the U.S. spent in February to stimulate the economy.

2) Where will the Chinese get the $$$$? That question alone will cause a ripple effect as people will anticipate that they will be buying fewer U.S. treasury bonds and take more of their currency reserves back home with them to spend on their local economy. This might hurt U.S. stocks/bonds further and cause the U.S. stock market to pull back.

3) This should boost Chinese-based companies that do the bulk of their business in China and sell primarily into their economy/market. Remember 50% of their economy is export related.

Dan Ross
http://www.BetterBizIdeas.com

Great Article re: China and their growth in the next century

Bill Mann, of the Motley Fool, thinks Chinese stocks are priced ridiculously cheap right now.

http://www.fool.com/investing/international/2008/11/07/why-i-believe-in-the-chinese-miracle.aspx?source=ihprlklcb0000002


Dan Ross
http://www.BetterBizIdeas.com

The best way to invest in China?

Interesting take on how to play the growth of the Chinese economy. I think it is a pretty sound strategy. Tough to gauge everyone's EPS though right now. Everything I keep seeing right now says OPEC is cutting production, which will BOOST barrel prices and cause oil to go back up at some point.

The real question is "when will demand destruction end?"



Dan Ross
http://www.BetterBizIdeas.com

China: Significant Policy Change in Property Market - loosening of credit to increase domestic consumption

So the number of real estate deals is down 72% Y-Y during their holiday period. Some people are now taking a "wait and see" approach and are staying on the sidelines. People say that the remaining potential buyers are "marginal" buyers who have to stretch to afford a home.

http://english.people.com.cn/90001/90776/90884/6510493.html

The government is easing credit requirements to buy property. This should help to sustain real estate prices. Please note, however, that Chinese finance rules say down payments of 30% are being reduced to 20%. I guess they never heard of our 0% down financing here stateside and the wonderful results it has generated :)

http://www3.uobgroup.com/assets/pdfs/Flash_1023A.pdf

Source: http://english.peopledaily.com.cn/200208/09/eng20020809_101182.shtml

Then there is the rumor of U.S. Investment banks selling their chinese owned properties. Chinese politicians/developers are worried that this may cause a drop in commercial real estate values.

http://english.people.com.cn/90001/90776/90884/6511242.html



My take: There are a few investment plays on China real estate.

XIN - XINYUAN Re: Holdings (real estate development) - It focuses on developing residential projects consisting of multiple residential buildings that include multi-layer apartment buildings, and sub-high-rise or high-rise apartment buildings, as well as auxiliary services and amenities comprising retail outlets, leisure and health facilities, and kindergartens and schools. The company also develops small scale residential properties; and leases certain properties, including an elementary school, a clubhouse, a kindergarten, and parking facilities, as well as offers real estate related services, including landscaping and installing intercom systems. As of December 31, 2007, it completed 14 projects with total gross floor area (GFA) of approximately 1,001,199 square meters; 7 projects with a total GFA of 1,069,144 square meters under construction; and 6 projects with a total GFA of 1,452,013 square meters under planning. The company was founded in 1997 and is headquartered in Beijing, the People�s Republic of China.

EJ - E House Holdings - Basically a real estate broker. More volume = more profits (once they cover their costs) This is the safer play on chinese real estate development. It primarily offers real estate agency services to real estate developers of residential properties. The company also provides real property brokerage services, and intends to provide listing and brokerage services, which include sales and rentals. E-House (China) Holdings focuses its secondary real estate brokerage services in three metropolitan areas within China, including Shanghai, Wuhan, and Hangzhou, as well as in Hong Kong and Macau. Its real estate consulting services include land acquisition consulting and real estate development consulting; and other consulting services to investors interested in purchasing businesses with land or other real estate assets, as well as to banks, real estate trade associations, and governmental property and planning agencies. The company�s real estate information services comprise the CRIC system, which supports its primary and secondary real estate services, and consulting and information services. The CRIC system consists of real estate sales data in China covering information on land, residential, office, and commercial spaces, as well as real estate related advertisements. The company was founded in 2000 and is headquartered in Shanghai, the People�s Republic of China.

Dan Ross
http://www.BetterBizIdeas.com/

Economic Slump is hitting China workers now

China's exports are drying up due to a weakening economy. Mattel and others don't need as many factories working given rising inventories and weakening demand.

I have to wonder if all the Chinese scandals are catching up to the economy as well. Toys with lead paint a few years ago, milk this year.....

Dan Ross

http://www.BetterBizIdeas.com

Advanced Battery Technologies (ABAT) Announces New Contract

Advanced Battery Technologies Announces New Contract

What is interesting here is that you have a $45 million company (2Q'07-2q'08 revenue) that just signed a contract for $27 million and the stock only moved up 8%? That just shows how beaten down investors are right now. I hope to buy some shares at current levels over the next few months. I think, in the long-term, they'll pay off handsomely, as Lithium Ion Batteries become more popular in vehicles.

One interesting sidebar is A123 Power, which was to go public late in the summer/this past fall. The private company never got their IPO done and it should be interesting to see what kind of buzz there is with oil coming down and gas prices coming down. Those folks were working with GM and their Chevy Volt batteries for cars.

ABAT does LI-ION batteries for electric bicycles, scooters, Buses and, in the future, cars......The technology still has a way to go but I like a company that actually makes $$$ in a business where too many competitors lose $$$ by buying marketshare (low margin sellers) or overinvest in overhead WAY too early in the game. Based in China, where most manufacturing happens, this is an interesting company to watch over the next few years.

Dan Ross
http://www.BetterBizIdeas.com

Chinese Products Getting PUMMELLED

And deservedly so.......

Lets go through some history

Dog food with melamine in it awhile back.

Then it was toys exported with lead paint.

Now it is milk with melamine, candy with melamine & infant formula with melamine. Over 20 dairy companies now have been found guilty of doing this. This is NOT some limited issue.

The real questions is "Are Chinese products safe?" It is going to temporarily hurt exports, hurting chinese exporters.....and for a DAMN good reason. While cheaper costs attract businesses there if consumers won't buy a darn chinese product there will be ZERO benefit of producing in China. The first guy over china's product safety was SENTENCED to death over a year ago and apparently the problems with their countries product safety continue.

"Melamine, which is high in nitrogen, is used to make plastics and fertilizers and experts say some amount of the chemical may be transferred from the environment during food processing. But in China's case, suppliers trying to boost output are believed to have diluted their milk, adding melamine because its nitrogen content can fool tests aimed at verifying protein content.
Melamine can cause kidney stones, leading to kidney failure. Infants are particularly vulnerable. Melamine has been associated with contaminated infant formula and other Chinese products containing milk protein. On Wednesday, the Chinese government identified 15 more Chinese dairy companies as producing milk products contaminated with melamine, bringing the total to 20 companies. At least 100 batches of milk powder have been found to contain the chemical, according to data on the food safety administration's Web site."

Dan Ross
http://www.BetterBizIdeas.com

Chinese Milk Scare! Interesting link

http://seekingalpha.com/article/95885-synutra-goes-beyond-government-orders-in-infant-formula-recall

"A second child in China has died after being given tainted infant formula, and more than a thousand other children became sick from various forms of the product. China’s Ministry of Health has determined the problem lies in the chemical additive melamine. The chemical is never supposed to be used in infant formula, but its addition increases the reading levels of protein in milk, though not the actual amount of protein. The MOH theorizes that the chemical was added by collection centers, rather than individual farmers or formula companies.

The scandal reminds the worldwide public of safety problems caused by poor regulation in China-sourced food and drugs, even though China-produced formula is not exported. The milk powder that caused the problem came from the Sanlu Group, one of the largest producers of dairy producers in China. Sanlu recalled its milk powder last week. However, there have been complaints of problems for almost six months. The first child died on May 1 and the second on July 22. The long time lag has caused complaining in some quarters that the company has been dragging its feet before taking this drastic action. The action is certainly drastic: the MOH says that over 10,000 tons of milk powder have been recalled.

Melamine was also the culprit in the China dog food scandal that occurred last year. "

Dan Ross
http://www.BetterBizIdeas.com/

Blog on China from Reuters

Interesting blog worth bookmarking....

http://blogs.reuters.com/summits/category/china-century-07/

Dan Ross
http://www.BetterBizIdeas.com/

Vegas needs a new airport terminal ???

I've been hounding for awhile that Vegas traffic was really going to get hit during this economic downturn. Rooms are more expensive than ever, restaurants aren't cheap and it seems like it takes a miracle to find a blackjack table under $10 on the strip at times.

Anyway, from http://www.thestreet.com/

http://www.thestreet.com/story/10436739/1/airlines-hotels-clash-over-vegas-airport.html?puc=_htmlbooyah

"Las Vegas, a city built for visitors, is ground zero in the airline industry's effort to cut back on marginally profitable flights. But the city's powerful hoteliers are none too happy about the cutbacks. They still want the carriers to finance a new airport terminal, which is needed to support 32,000 additional hotel rooms slated to open by 2012. The timing is unfortunate. Traffic at McCarran International Airport fell 8.6% in July, compared with the same month a year earlier. In fact, traffic has fallen every month this year, except for February, which had the benefit of leap day in 2008. And the airlines aren't finished cutting. "

Oddly enough, I was talking last night with my mother re: her pending trip and she had indicated that Southwest Airlines was cutting one flight (out of two daily) that fly direct to Vegas from where she lives....

Dan Ross
http://www.BetterBizIdeas.com

WAMU CEO out.....HUGE win for regional banks...

So I have been out on vacation the last few days and my phone has been getting lit up with txt messages from friends/buddies re: Fannie Mae/ Freddie Mac, WAMU, etc and they are curious re: my thoughts about it. To be honest, I was COMPLETELY out of the loop on this as I was enjoying my time off.

I read this commentary re: WAMU and its CEO getting axed yesterday and it really rang a bell with something that Jim Cramer talked about re: how the FDIC's new strategy is going to be a HUGE win for regional banks.

Here is something to chew on. From something I read.....not Cramer....

"Kerry Killinger was one of those lucky guys in the right place at the right time. He built WAMU by buying distressed thrifts out of the last S&L crisis. It was a lucky streak of acquisitions. Essentially he had acquired a bunch of rain buckets which collected the mortgage refi bounty resulting from the lowest bond yields in history. He never effectively integrated those acquisitions. When the drunken refi mortgage party ended, he couldn't pull himself away from the tap and charged headlong into subprime to keep the party going. It was a disaster in the making."

Now hear Cramer's take on the FDIC and their changing strategy re: banks.

http://www.thestreet.com/story/10435631/1/cramers-mad-money-recap-fdic-to-the-rescue.html

While in Vegas the end of last week and early this week I noticed that Zion's bank (one of their subsidiaries) had taken over a large Henderson NV bank via the same method in the link above. So we now have TWO examples of regional banks buying deposits cheaply and getting bigger. We just have to hope that these folks HIRE or already have people that can integrate all these systems/banks together.

For the record, Cramer likes BB&T, a bank that he considers a conservative regional lender with a sound balance sheet that should be allowed to buy these guys on the cheap throughout FL and the SE.

Dan Ross
http://www.BetterBizIdeas.com

Nasdaq-listed Zhongpin Inc (HOGS.NASDAQ) Link

http://thechinaperspective.com/articles/livingonthepig039sback4419/index.html

A few key takeaways....

"New pork processing industry regulations take effect at the start of August. How will these affect your company? We view this as a positive for Zhongpin as the new regulations will definitely speed up the modernization of the pork processing industry in China and encourage the transition from the traditional wet market to modern “dry” market processing. We expect that some processors who cannot meet the national standard will eventually leave the industry and consumers will have better access to safer and healthier pork products. As a leading meat and food processing company that utilizes state-of-the-art equipment and advanced technology in our production, we believe the new regulation will enable us to seize opportunities for further expansion and increase our market share, especially in second and third-tier cities"

"When do you expect to complete your new factories, and how will this increase your total production capacity? The new factory in Luoyang City had already started production at the end of June and the Shangqiu plant will begin operations by the end of the fourth quarter of 2008. These two plants will increase our capacity of chilled and frozen pork to 471,560 metric tons, excluding outsourcing from OEMs, equivalent to a 42% year-over-year growth rate. In September 2008, a new facility in Changge City with 28,800 metric tons of prepared meat will start production, which indicates our capacity will increase 114% to 54,000 metric tons per year after completion. Our annual production capacity of fruit and vegetables will increase by 114% to 56,280 metric tons when a facility in Changge comes on-line by the end of this year."

Dan Ross
http://www.BetterBizIdeas.com/

BRIC growth slowing notably?

Brazil, Russia, India and China are called the BRIC countries. These are former "3rd world" economies that are experiencing rapid economic growth, have large populations and have generated some of the largest investor returns in the world for the last 5-10 years.

With occupancy rates in some Indian hotels approaching 60% (at 90% last year) the growth in the hospitality industry is quickly slowing down.

From Business Standard
http://www.business-standard.com/india/storypage.php?autono=332964

"The total number of hotel rooms planned is being cut by 40 per cent and many developers are putting their portfolio on sale due to the decreasing business traffic, rise in interest rates and economic slowdown. Nearly 50,000 hotel rooms were planned in the country and that number may not be built by developers as business traffic has fallen 30 per cent in the last couple of months and lending rates for developers have increased significantly"

Dan Ross
http://www.BetterBizIdeas.com/