Code JDMBA2b: June 2005

Thursday, June 30, 2005

My Current Asian ADR Positions

Lots of people have been asking me which Asian ADR’s I currently have positions in. Although my positions may change at any time, here is the current list and a sentence or two about why I own shares in each:

NTES- Its two primary games are still growing, upcoming games and casual have high potential. Internal development leads to high margins, better game localization and reduced hacking risk.
SINA- Leading portal in China which is very attractive to advertisers who want to reach the large and growing Chinese consumer market. Huge user database that will become better monetized over time across multiple business segments.
SOHU- Multiple attractive web properties (,,,,, and Sogou has a good position in the growing China paid search market.
TOMO- Strong WVAS position, strong execution. Tom/Skype and India Games acquisition both have good long term prospects.
KONG- Almost $3 per share in case. Strong position in 2.5G, and mobile gaming markets. Well positioned for 3G going forward.
SIFY- Strong market position in corporate networking and as an ISP. Clear leader in India Internet Café market. Well positioned to monetize user base with WVAS, advertising and online gaming going forward.
TLK- Leadership position in Indonesia where wireless penetration is still low. Good growth prospect and very reasonable valuation.
WZEN- Lots of cash as compared to market cap. Although its primary game MU is aging, its game pipeline looks very strong over the next few years
SNDA- Leadership position in China online gaming market. Casual gaming, mobile games, WVAS, advertising and possibly IPTV as future growth drivers.

There are of course multiple risks involved with all of these stocks. Type the ticker symbol that interests you into the Google search box in the upper right hand corner to find more detailed blog postings of mine on each of these stocks. I am not making any investment recommendations here. Please do your own research and evaluate your risk profile before investing.

Saturday, June 25, 2005

New Google Search Box

Many of my readers have been asking for a better way to search my prior blog postings. I have just added a Google search box to the upper right hand side of the page. Try typing in the ticker symbols of your favorite Chinese stocks to find recent relevant blog postings of mine. Or type some common keywords relating to law school, business school, finance or China, to find my recent postings on the topic.

Of course you can always select "Web" instead of "" in the Google search box to find additional information on the internet relating to topics discussed in my blog.

Let me know what you think and please continue to email me suggestions about how to improve my blog!


I have been reading this blog for a while:

For quite some time many people thought it was a real blog of a big law partner. It turns out it is all fictional and written by a current Harvard Law School student. I think it is one of the funniest blogs I have ever read. While everything is made up, much of it is similar to what actually happens in big law firms across this country (perhaps just exaggerated a little at times). Here is a copy of a recent post written by AnonymousLawyer on Saturday, April 02, 2005:

"This is a terrible day. Every year it frustrates me. For no good reason, tonight at 2 A.M. we lose a billable hour. Daylight savings time is ridiculous. Individually, it's not a big deal, but think of it on a firm-wide level. That's hundreds of billable hours. Gone. Without a trace. And don't tell me we get them back in October when the clocks turn the other way, because by October everyone forgets about the debt they incur back in April, and just uses the extra hour to sleep. It's a useless waste of valuable time, and I hate having to tolerate it every single year. Definitely on the list of things I will change when I become chairman of the firm."

"Hourly billing gets a bad reputation, but I don't know why. If we charged a flat fee by project, we would have an incentive to push the work down the food chain to our most junior-level associates, or, even worse, farm it out to temps. This way, the clients get what they pay for. If I spend an hour with your file, that's one rate. If an incompetent first-year spends an hour with your file, that's a different rate. Only makes sense that way, since my time, obviously, is a lot more valuable. Everyone knows that."

If any of my readers have a blog that relates to the subjects I like to talk about please send me the link and I will be happy to add it to my blog.

Tuesday, June 21, 2005

Telkom Corruption Investigation

I was not happy reading this Jakarta Post story as TLK is one of my major holdings and has done quite well for me lately:

"The government-sponsored interdepartmental corruption eradication team is intensifying its investigation into corruption allegations at state telecommunication company PT Telkom, following initial evidence of graft allegedly committed by the company's management."

"under the new contract Telkom should pay an annual payment to MGTI within the contract period totaling US$517 million, aside from assuming full responsibility to build and finance new telecommunication facilities in the two provinces"

"All MGTI shareholders, including Telkom's rival state telecommunications firm PT Indonesian Satellite Corp. (Indosat), Widya Duta Infotel, Telstra Global Ltd, NTT Finance and Sumitomo Corporation agreed to sell their entire stake to PT Alberta Telecommunication (Alberta) for a total of $266 million in January last year"

"Aside from the MGTI deal, the anticorruption team is also probing allegations of kickbacks during the construction of network infrastructure for Telkom's latest cellular technology Telkom Flexi."

It appears that TLK has massively overpaid for MGTI. Although some financing issues were alleged to have blocked the $266 million deal last year, I am sure that TLK could have financed it in the international debt markets. TLK is profitable, growing and in a leadership position in India. Somebody would have purchased bonds at a reasonable rate of return so TLK could have financed the deal. I am concerned about the kickback allegations. I am going to hold onto my TLK shares for the moment as I still feel that they are way undervalued (assuming any possible corruption can be eliminated) but that does not mean I am happy about this. Perhaps if TLK falls back below 20 based on continued reaction to this news I will buy more shares. My future decision to remain a TLK shareholder hinges upon the elimination of any corrupt management going forward.

Disclosure: I am long TLK

Another recent TLK related story (on a more positive note):

Monday, June 20, 2005

Identification Theft

This post does not directly relate to any of the usual topics of my blog. Nevertheless I am going to share some information with you since several of my friends have recently been a victim of ID theft. It is true that due to the amount of information that can be accessed online, nobody can ever be completely safe. Many corporations (Credit Card Companies, Public Utilities, Mortgage companies, etc) and government organizations (DMV, SSA, IRS, etc) have access to our personal information and SS#. Often this information is not completely secure. You social security number is the most important thing you want to protect. Here are some tips for people that are victims of ID theft or would like to reduce the risk of it happening to you:

  1. Order your credit report from all three credit bureaus. There has been a recent amendment to the fair credit reporting act allowing all consumers 1 free credit report from each bureau once a year: Review your report for any inaccurate data and dispute any inaccuracies promptly:
  2. Send opt out letters to each credit bureau to make your personal information unavailable to be shared with others or used for promotional purposes: This is important because thieves will often raid mailboxes to pick up credit card offers, etc.
  3. Use a P.O. Box for your mail if possible. This makes it more difficult for thieves to steal your personal financial records that can easily be removed from a mailbox on your street.
  4. Never carry your social security card
  5. Never use your social security card, birth date, etc as a password. Thieves will guess passwords that can be associated with you in order to gain access to your records. Always use passwords that are unique and hard to guess. Do not write them down or leave the passwords in unsecured areas. Memorize financial passwords instead.
  6. When applying for credit, do not freely give out your SS#. Many companies will be able to find other ways to verify your creditworthiness without your SS#. This may not always be possible, but you should avoid giving out your SS# when you can. Always ask why they need it. For example many doctors will use it as an identification number for your file, etc. However they likely have no legal requirement to ask you for it and can get by without it if required
  7. Buy a paper shredder. Thieves often will look at garbage to find data.
  8. Never throw away credit card receipts. Instead take them home and shred them when they are no longer needed.
  9. Purchase a credit monitoring service and not the kind with quarterly or even monthly updates. Buy a service than monitors your credit (with all tree bureaus) in real time and alerts you to any suspicious activity or opening of new account.
  10. Be aware of your legal rights. If your report your credit card as lost or stolen before it is stolen you cannot be held liable for any loss. Under federal law you cannot be held liable for unauthorized purchases to your credit card is excess of $50. Many credit card also companies offer $0 liability fraud protection for unauthorized credit card purchases. For ATM or Debit Card Loss or Fraudulent Transfers (EFTA) transactions your liability is limited to $50 if reported within 2 business days. Note that under Federal law EFTA liability can increase to $500 after two business days and up to an unlimited amount after 60 days if unreported:
  11. Try to find out quickly who has stolen you data and prosecute. The sooner you act, the better chance you have of catching the person before they post your data online or sell it to others.

TOM Online

Tom Online is currently one of my larger holdings. Among the WVAS players in China with a major portal (TOMO, SINA, SINA, and NTES), TOMO seems to be the least expensive. As compared to other pure WVAS players such as KONG, LTON and HRAY, Tom Online is more diversified and has the advantage of a superior portal and content partnerships to drive traffic and WVAS usage. I also think they have done a relatively good job executing their business plan over the last year or so and expect the trend will continue.

With the expected massive increase in Mobile Gaming over the next few years in both China and India, I think the India Games Acquisition will turn out to be a big positive for TOMO. Tom Online will be able to increase WVAS advertising and gaming revenues from its increasing TOM/Skype usage, its portal that has been adding content, strong distribution network and more unique strategic partnerships such as the one reported today by China Tech News:
  • Tom Online has signed a wireless partnership with Warner Bros. Online
  • "The partnership includes the launch of the first official Warner Bros. Studios site in China on the back of's website name."
  • "Both parties agree to partner in the creation and distribution of Warner Bros. Studios wireless content for the first time in such advanced formats as MMS, WAP, wireless gaming, Flash, as well as animation and video streaming in the run-up to 3G."
  • "Warner Bros. Studios' characters such as Scooby-Doo, Bugs Bunny and Tweety will be featured on the site along with sections dedicated to the Studios' movies, games, and wireless Internet products. Websites for upcoming feature films will also be available. Upcoming titles may include Batman Begins, Harry Potter and the Goblet of Fire, and Charlie and the Chocolate Factory."

I am currently long TOMO and may consider buying additional shares at any sign of weakness between now and the 2Q 2005 earnings announcement.

Sunday, June 19, 2005

New Sina Search Engine

Is the new search engine product that Sina has had in development?

I have not read any press releases yet about its launch, but it sure looks like a Sina search engine to me. I have not been able to evaluate the quality of yet, but I will be watching it closely in the weeks ahead. is a good site to track the traffic growth of new internet sites:

Disclosure: I am currently long Sina

Wednesday, June 15, 2005

More Chinese Auction Market News

This article from China Tech News really scares me as a law student with some interest in the success of the online auction business in China:

Essentially an online auction buyer purchased a computer from what he thought was a technology company in Changsha. After he paid for the computer but never received it he realized that no company named Changsha Fengxiang Technology Company even existed. He sued 1pai (Auction JV between Yahoo and Sina) and the court granted him a judgment for the RMB3350 cost of the computer plus legal fees. If this becomes precedent it could be disastrous for the online auction providers. In China it is much more difficult to prove your identity and credibility with online auctions due to the much less advanced online banking systems, less reliable postal services, etc.

On a more positive note, this story from China Daily as reported by iResearch talks about a new escrow and logistics service created by Alibaba (the parent company of Taobao

"'s affiliate Zhejiang Zhifu Bao has entered into an alliance with China's two major logistics service providers, Zhaijisong and Tianjin Datian Group, to create the first e-commerce third-party logistics agency in China. The third-party logistics service integrates different logistics enterprises onto the online platform of Zhifubao from which the trading parties can choose. Buyers can have a specific logistics company to check and deliver goods for them and the latter will then act as an escrow agency. Zhifubao is also negotiating with the China Postal Express Corporation for possible cooperation."

Until payment systems, mail delivery and online trust can be improved for the benefit of online auction communities, it seems an escrow service (particularly with China Postal Express Corporation cooperation) could be a great thing to help foster industry growth. Lets hope Alibaba announces something like this for its Taobao division as well!

Tuesday, June 14, 2005

China Instant Messenger Market

Here is an interesting post from China Net Investor:

Essentially Tencent (ticker 0700 on the Hong Kong Stock Exchange) has a large majority of the China IM market right now and has been taking market share away from Sina and Netease. The only other competitors that have been gaining market lately have been MSN and Tom/Skype.

MSN has an advantage as Microsoft preloads MSN into Windows XP, so as users upgrade to XP from Windows 2000 it is automatically installed. Tom/Skype has an advantage in superior voice quality (Tencent followed the idea and now offers a voice product that is getting lots of usage also) and some technical advantages in being run during MMORPG play.

The other smaller players have been losing market share (Sina-UC and Netease-PoPo) for very logical reasons. First QQ offers more features than some competitors. Second if you had 3 IM products which one would you use? Most likely the same one as most of your friends. With 77% QQ market share vs. 3% for PoPo, 1% for UC and 2% for IM which do you think most of your friends use? Probably QQ! Therefore other than Tom/Skype and MSN I doubt Tencent's QQ IM product will be losing much market share to anyone else in the near future.

For those of you that would like to learn more about Tencent I highly recommend reading this Goldman Sachs research report courtesy of BillsDue:

It appears that Tencent is hiring aggressively in order to ramp up efforts in a number of areas including casual games and MMORPGs, portal, advertising, and possibly online auctions. Apparently Tencent thinks that since many Chinese Auctions users use QQ to discuss possible transactions they can succeed in launching an auction site themselves. Time will tell. The auction market is extremely competitive as I have discussed on my blog previously.

On an unrelated note, I have recently changed the advertising placements on my blog. By using much a smaller text advertisement on top of my page and fewer advertisements on the right side of my page I hope that my sponsors have become less intrusive. Your feedback is always welcome! Eventually I hope that my sponsors will help support my blog. Please let me know what I can do to better appeal to you my reader!

Monday, June 13, 2005

Paypal China Launch Date

According to this Forbes article (courtesy of AFX News Limited) one of the main reasons why eBay has been losing market share to Taobao (who launched Alipay in October of 2003) in China is the lack of a payment system:

In my recent blog post in mentioned a payment system, localization and price to be the big 3 factors in determining success in the Chinese Auction Market:

Of course the U.S. Market has taught us that a first mover advantage and high quality user friendly auction interface is also important (the site with the most buyers will attract more sellers and vise versa). I think the Chinese Internet Market is still relatively young enough that the leadership positions are not yet set in stone.

There was a very interesting comment on billsdue stating that Taobao never actually received approval for Alipay, but instead just chose to launch early and deal with any legal implication at a later date:

U.S. Firms are not accustomed to this type of practice. I have a feeling that the Chinese government would rather see Taobao succeed than eBay/Eachnet, so I bet Alipay will be allowed to continue operation going forward just fine. If this is the case, then and if Paypal is delayed much longer, Taobao could really build a big lead pretty fast in China.

China Search Market Update

China Search Market

Based on my information the current 5 leaders in the China Search Market (along with associated Chinese web properties) are:

1. Baidu (Will IPO this summer, 10% is owned by Google)
2. Google,
3. Yahoo,, (Joint Venture with Sina)
4. Sohu,,,, and
5. Zhongzou

Sina (the top portal in China) reportedly has a search engine of its own coming soon

This following article ranks Baidu first followed Sohu and then Yahoo:

I think they do not have google in second (as they should) since and are new and many Chinese have been using the for quite a while instead. I doubt they used in their Chinese search ranking analysis. The reason why I still rank Yahoo ahead of Sohu is that Sogou still has a much lower page views per user ranking than Yahoo. Based on their growth trend I have no doubt Sohu will clearly pass Yahoo in the near future. Google and Baidu are still far ahead.

The article cites CEO Charles Zhang as saying “Our [search] traffic has tripled in the last six months. In the next two months, we'll focus a lot on Sogou….I think we can pass Baidu in two years.” Zhang also said that he expected double digit quarter over quarter growth in sponsored search revenues for the rest of the year. "At that rate of growth, sponsored search revenues, which totaled US$2.73 million (HK$21.29 million) in the first quarter, could go from a current contribution of about 11.5 percent of total sales to possibly 20 percent by the end of the year, he added."

Personally I think it is a little early to make a prediction on passing Baidu or even Google. However as a Sohu shareholder I have been very pleased with the growth in Sogou traffic in recent months. Sohu has an advantage of having so many high traffic Chinese websites capable of sending search traffic to Sogou. Sina will have a similar advantage when they launch their search engine in the coming months. In addition the locals should (Baidu, Sohu, Sina and Zhongzou) have an easier time adjusting regulations including exactly what websites and terms can be allowed in China search results without alarming the government internet policing agencies.

There is no doubt that the China search market is growing quickly and will become huge in the coming decades. It is still too early to say for sure who the winners will be in the market. From an investors standpoint I just hope I am long shares of the leaders of tomorrow.

Disclosure: I am long SINA and SOHU

For more on Baidu see my new blog:

Saturday, June 11, 2005

Baidu IPO Is Coming Soon!

"A high-placed individual at leading Chinese search engine Baidu said the company's IPO on the NASDAQ stock exchange will take place in early July."

Here is the article from

Google is currently the leading search engine in China
"Baidu, which has enlisted CSFB and Goldman Sachs to underwrite the listing, is expected to list with a valuation of $800 million and will sell an estimated 25 percent of the company in its IPO."

Google currently owns about 10% of Baidu and some think that they could become interested in buying Baidu outright after an IPO.
"There has been speculation in the Chinese Internet industry that Google will make a bid to acquire Baidu shortly after its listing. The global search giant is rumored to be looking for an entry into China, but has yet to hire any staff on the mainland. A Google spokesperson declined to comment on any such moves."

Mr. Xu the co-founder of Baidu resigned last August to pursue biotechch startup opportunity:
"As I told my son, I personally believe that Baidu should be a billion-dollar company," said Mr. Xu in April. "To turn it into a multibillion-dollar company, though that requires a different skill set. I had to wonder whether I could go that route and become a professional manager, or whether I should go back to a startup in an area where I have background and domain knowledge."

If Baidu trades at a $800 million valuation after the IPO I may be a buyer. They are in a great position in the fast growing China paid search market. In addition they are a very attractive takeover candidate (although there could be some regulatory/political hurdles associated with a buyout offer from a foreign firm). Of course I would also like to see all their financials before buying.

For more on Baidu see my new blog:

Thursday, June 09, 2005

Sogou Traffic Keeps Climbing!

According to Alexa the traffic rank for Sogou today is 43 in the world:

As of the last Alexa ranking Sogou is number 21 (and climbing) in China:

With,,, and helping drive traffic to I think it is possible the growth will continue. This is great news for SOHU who I think has a chance to pass Sina sometime in the not too distant future in terms of advertising revenue.

I am currently long SOHU shares. Please do your own due diligence before investing.

My NBA Finals Prediction

I think it will be a close series. I am picking Detroit to win the series in 7 games.

San Antonio is favored to win and they have home court advantage. In the end I think the Piston defense and offensive rebounding ability will be too much for the Spurs. Remember that the Lakers beat the Spurs last year but lost to Detroit in the NBA Finals. Detroit is a better team this year than last year. You read it here first!

Tuesday, June 07, 2005

My Thoughts on Sina

Recently several of my readers have asked me to share my thoughts on SINA one of my current holdings. As always I am not making any investment recommendations on this blog. Please determine your risk profile and do your own research before investing.

From a fundamental standpoint I do not think that SINA is the cheapest Internet related Chinese ADRs. In the WVAS market, TOMO, KONG, HRAY and others offer more compelling valuations based on cash per share, EPS forecasts for the next few years, etc.

When it comes to search SOHU seems to be doing relatively well with as of late and along with Baidu, Google, Yisou and others have a pretty good lead over Sina. I was pleasantly surprised recently when Sina announced that they had been working on search engine development for quite a while. Unfortunately they have a long way to catch up. One thing that Sohu/Sogou taught us is that with good technology a leading portal such as Sina (and Sohu) should be able to leverage its massive traffic to build upon its search market share fairly quickly. Let's hope that Sina can catch up soon. With the low Internet usage penetration in China nothing is impossible especially for the country's leading portal Sina.

When it comes it advertising, Sina will remain one of the top players for the foreseeable future. It is possible that SOHU will overtake SINA in advertising revenue in the short term based on the combined traffic to Go2Map, Chinaren, 17173 and, despite having a portal second to Sina in China. However there is no doubt that ad revenues will increase substantially for Sina, Sohu, and others as the 2008 Olympics becomes nearer, more Chinese go online, and more overseas companies attempt to reach Chinese consumer market.

In online gaming, I have not been that impressed with Sina's Lineage 2 results. While the MMORPG is bringing in some profits it has not met my expectations. Sina's IGame casual gaming portal seems to be doing okay. Hopefully the people using IGame will remain loyal, so that they will try new MMORPG's that Sina may launch in the future. Based on the success of WOW, perhaps Sina should attempt to license another high profile game in the future (assuming the licensing games are not as high as The9 is required to pay Blizzard). I would like to see Sina move more heavily into mobile games in the near future before KONG, TOMO, SNDA and others gain a large lead in the China market.

In the online auction market Sina/Yahoo has attracted lots of users since its launch last year. However is still a very distant third to Ebay/Eachnet and Alibaba/Taobao in the China Market. Yahoo was able to beat eBay in Japan but Yahoo is mush different. In order to succeed, 1Pai will need to better localize services to match Chinese culture, develop an acceptable payment system and market heavily while continuing not to charge any listing fees for quite a while.

There is no doubt in my mind that ad revenues will continue to grow nicely going forward. I am more concerned about gaming and WVAS revenue at Sina. I think that TOMO, and others have been better executing in the WVAS market over the last year or so and NTES has clearly been more successful at gaming. With the leading portal in China, SINA should be finding as many ways as possible to monetize the traffic. I would like to see expansion into additional e-commerce areas. I am a little confused why Sina would sell Fortune trip at this time. It seems a little early to think that they had no way of competing against CTRP or LONG (the buyer of Fortune Trip). Perhaps the Long/Sina travel partnership hinged on the sale and Sina felt the partnership was more important than retaining ownership in Fortunetrip. I would like to know the reasons for the sale. I liked the Sohu Go2Map purchase and the TOMO India Games purchase. I hope Sina starts putting its cash to good use in the near future by expanding into new areas instead of buying more small WVAS players like they did in the past.

As far as the SNDA/SINA rumors are concerned, I am not counting on the merger to occur. If it does Sina will likely appreciate slightly. It SNDA sells their SINA shares and announces they are no longer interested SINA will likely drop (as much of the last big run up in SINA shares a while back was based on the SNDA share purchase and takeover rumors). In the long run I am sure that Sina can do well on its own as can SNDA. If I were a member of SINA's board I doubt I would agree to a merger offer from SNDA involving only a small premium over current share prices.

In conclusion, I have not been overly impressed with Sina's execution in the recent past and do not think that SINA offers the most compelling valuation among China ADRs. However, I am confident that Sina will remain the top portal in China at least over the near term. The U.S. market has taught us that the industry leaders will often command a substantial valuation premium over competitors (remember Yahoo vs. Excite and Lycos). If we believe that Sina will remain the leader, which I think is very possible it may currently be a great long term investment even if others have lower PE ratios, etc right now. I am too busy right now to track every market development on daily basis, so I do not day traded much anymore. I also do not want to be caught with no SINA stock (or even worse a short position) if big news breaks (such as a RMB revaluation, SNDA merger, etc). Therefore I plan on holding my SINA shares for the long term. At this point I doubt I will sell any SINA shares before the 2008 Olympics. I am not sure how Sina will do over the short term but feel very good about where Sina will likely be 5 or 10 years from now.

My First Week As A Summer Law Clerk

I have been working at the law firm for about one week now. I am really enjoying my time here so far. I feel like I have been learning quite a bit. Most of my time has been spent doing legal research and writing. I have a feeling I will learn much more about legal research and writing this summer than I did all of last year in my legal research and writing classes at school. So far I have drafted Memos, Motions for Default judgment, Interrogatories, Discovery requests and more. Some of these documents I never produced in school. I am happy that there is an extensive database maintained at the firm that has examples of all different types of legal documents for me to use for guidance.

At this point I have to say that I do not feel very efficient in doing my legal research. I think I am one of the only first year law students at the firm so most of the other clerks have more research and writing experience than me. I feel like I can eventually figure out most of the legal problems presented to me but I am taking much longer than I think should be required to answer certain questions. When real life clients are involved I feel like I need to dig pretty deep into legal issues to make sure I am uncovering everything important. Sometimes I feel like I spend too much time researching avenues that end up not being very fruitful. At times I feel bad about the amount of time I was spending on certain projects knowing that the client would be billed. Thankfully I learned that the firm will often write down the number of hours law clerks bill when something takes too long. I also am sure that I will become more efficient over time.

So far the feedback I have received has been very positive. All of the attorneys at the firm are very busy, but they still have taken time to make positive comments about my work along with tips to help guide me with my research and help me improve. We had a picnic last week that allowed me to meet some people who worked in different departments in the firm. I am really enjoying working in litigation but I am also curious about the work done in different departments. Everyone who I have had time to talk to so far has been happy to tell me exactly what they do and how they developed there legal skills over time. I will post more about my summer clerkship experience over the next few months.

Wednesday, June 01, 2005

President Bush Will Nominate Christopher Cox To Head The SEC

According to GOP officials Bush will soon nominate House Representative Christopher Cox to head the SEC to replace Donaldson who has just resigned.

Here is the Associated Press Article:

I do not know everything about California Rep. Christopher Cox, but I like this:

"Cox has been a longtime advocate of repealing the estate tax, the capital gains tax on savings and investment, and taxes on dividends. He also has supported banning taxes on Internet commerce."

Some history on Donaldson who is now resigning from the SEC:

"Bush picked Donaldson 2 1/2 years ago as SEC chairman to restore confidence in a stock market that had been shaken by corporate scandals. A Republican and Bush family friend, Donaldson was an activist who often clashed with traditional GOP business allies. They chafed over what they perceived as an excessive regulatory zeal during Donaldson's tenure. Donaldson, who turns 74 on Thursday, told the president that "the time has come for me to step down and return to the private sector and my family." He said Wednesday he would leave the agency on June 30."

Although some in the GOP disagreed with the what they considered excessive regulatory actions during his tenure, I think Donaldson did some great things while at the SEC:

"Donaldson helped put in place the Sarbanes-Oxley Act of 2002. The law tightened oversight of U.S. corporations and came in response to financial scandals at Enron Corp., WorldCom Inc and other large companies."

"Donaldson also won approval at the SEC for a number of rules designed to clean up the $7 trillion mutual fund industry."

Just an educated guess, but I bet the US financial markets will react kindly if President Bush confirms that he will nominate Rep. Cox

As always I am not making any investment recommendations on this blog. Please feel draw your own conclusions and share your feedback if you like!

Great Day For Chinese ADRs

I came home today from my summer clerk position at the law firm to a pleasant surprise. Every single one of my major equity holdings was up today. Several were up a great deal and my Chinese stocks were not the only winners (although the Asian ADRs I own were up much more as a while than the rest of my portfolio today). Those of you that read my blog likely already know most of the stocks I own so I will not repeat it all now.

I am really enjoying my new job thus far. Everyone at the firm that I have spoken to so far was very friendly. Somehow the same type of legal research and writing (research memo's) I sometimes found boring at school became much more interesting when real life clients and real dollars are involved. I received my first grade from last semester (from the class I thought I did the worse in) and was pleasantly surprised by the result! If my portfolio performs this well for the next few days I will have had a truly wonderful week.