Compared to 1Q2018, Baidu's SG&A expenses were increased by CNY 2.94 billion, the content cost were increased by CNY 1.98 billion, the operating income were decreased by CNY 5.51 billion. The large increase in SG&A expenses and content cost was caused by promotional expenses related to Haokan App, Quanmin App and other baidu products. Among them, considerable resources are spent in the promotional campaigns during the Chiense Spring Festial.
The Characteristics of Financial Asset Bubble
Financial asset bubble is more like speculative epidemics
Feedback loop of Bubble
The Position of Media in Speculative Bubble
Significant market events generally occur only if there is similar thinking among
large groups of people, and the news media are essential vehicles for the spread
The Current Customer Base of Beyong The Meat
At one of the nation’s largest conventional grocers, Kroger, 93% of Beyond Burger buyers over the 26-week period ended June 30, 2018 also purchased animal protein during the same period, which evidences Beyond Meat’s appeal to meat-loving consumers.
This illustrates that the beyond burger buyer base are largely overlap with meat eating consumers. Also, a small part (7%) of beyond burger buyers are not traditional meat eators.
In the context of American and Canadian English, a patty is a flattened, usually round, serving of ground meat or meat alternatives.
beaf meat in small pieces, often made with flour, cheese and water.
The Gross Margin Advantage (Problematic)
The gross margin f beyond meat for the three months ended 2019 is 25%, above 2 times higher than tyson foods, the traditional meat maker.
However, the Sales G&A expenses of typson foods is less than half of its gross profit and typson foods has no R&D expenses. For beyond meat, this ratio is 2 to 1. Beyond Meat needs to increase sales revenue by 300% to make the same G&A/gross profit ratio. Given the 3 months ended Mar, 2019 performance, beyond meat should be able to meet this ratio level in 2 to 3 years, if Sales G&A expenses does not increase.
The Branding Problem
The company's flagship product, Beyond burger is branded as a retail product, which may introduce conflict of interest with beyond burger's distributors and retailers as it is directly competing with their existing private labelled burger products.
The Professional Employment Organization
According to the prospectus, currently each of Beyond Meat's employees is also an employee of record of the PEO.
BYND's Shipping and Handling Cost
The shipping and handling cost is included in the G&A expenses, which make the cost of goods sold seriously underestimated. As a result, the gross margin of BYND is inflated.
Based on the component of increased G&A expenses in year edned 2018, shipping and handling cost accounts for 26.6% of the G&A expenses (omit related headcount expenses). The gross margin of BYND would declined to around 10% if applying shipping and handling cost in this percentage of total G&A expenses of year ended 2018 and include them in the cost of goods sold. Also, the actual gross margin ratio would very likely to be lower given the related headcount expenses was omited due to lack of data.
In a gross margin ratio of 10%, BYND has no advantage over traditional meat producers.
Primary Component of Animal-based Meat
amino-acid, lipids, trace mineral and water
- Hormel, PPC, Tyson, WH Group
UAE ( no antibiotic ever)
The R&D expenses of Tyson food is $118 Million in the year of 2018, compared to $9.58 Million for Beyond Meat.
Productivity and Cost Efficiency
The success of tech innovations depend largely on its improvement of productivity and cost efficiency.
Leverage and Short Selling
Invest on leverage has two major characteristics: (1) As an amplifier of both gain and loss
(2) The investor can be forced to close position due to the fluctuation of market price.
Short selling is considered as using leverage in trade since the margin requirement is 150% which includes the sells proceeds, thus the actual consideration paid is only 50% of sells proceeds. The leverage can be as high as 2 is the account have only 50% of equity of the security short sold.
Leverage is considered as using borrowed capital in trade, short selling involves borrowed securities, the proceeds of short selling can be considered as the borrowed capital. The cover of a short position can be thought of as returnning of borrowed capital at a reduced amount.
Ex-ante and Ex-post
Ex-ante = Before the fact
Ex-post = After the fact
Fundamental Principle of Optimal Forcast
The forecast error must be uncorrelated with the forecast
Fundamental Research and Market Research
Fundamental research focus on determine the fair valuation of the firm in long-term perspective.
Market research is intended to evaluate the short and mid term overall stock supply and demand.
关注理由，中美贸易战引发的中概股大跌，股价走弱，虽然中国经济随贸易战承压但公司盈利基本面并没有明显变化，随着2018年年报发布时间的邻近，在爱奇艺年报超出预期的情况下，在155价位的百度股票有中长期上升空间。在155 - 160价位区间可以考虑买入。
Short Term Market Sentiment
Short term market sentiment cannot be guarranteed to extend into mid term market sentiment.
Thus the profit should be protected by placing profit taking order no higher than a 5% gain.
Also, the potentional loss should be stopped by placing a stop loss order in case the short term market sentiment is not fully realized as market price or performed at all.
The source of gain comes from uptick orders triggered by short term market sentiment.
When the inflation rate is high as well as general stock price level, the real return is overestimated because of the same high interest rate.
WWR Research Note
- The company acquired Turkey graphite mineral resources in 2015, but did not generate any revenue until the license was terminated in 2018, why is that.
- 英方的核心诉求在于享受欧盟权利却不履行欧盟成员国义务，这在欧盟看来是对其核心利益和秩序的侵犯，不可退让。 同时由于公投导致的退欧使得英方在谈判上的底线已然确定，直接导致了英国在谈判中的弱势地位。
Sohu 2018 Annual Report
- Brand advertising segment gross margin was 20% for 2018, compared to negative 16% and 17%, respectively, for 2017 and 2016.
Notes: The imporvement was mainly attributable to a decrease in video content costs and impairment charges compared to 2017.
The operation is sohu video is approaching profitable under the current trend as stated by the 2018 annual report.
However, the revenue drops accompanied with cost cut is significant. It is expected that sohu video will drop to a revenue level the same with sohu website advertising, and loss its position as the company's future revenue driving force.
- The search and search-related advertising gross margin was 35% for 2018, compared to 48% and 51%, respectively, for 2017 and 2016. The decrease in our search and search-related advertising gross margin for 2018 was mainly due to higher traffic acquisition costs as a percentage of search and search-related advertising revenues
Notes: The traffic acquisition cost surges along with the growth of revenue, which is a negative signal. Actually, the cost of revenue increased faster than ad revenue.
InterDigital Wireless Inc
Business: Wireless Patent monetization
Time Period: 2011-7-20 to 2011-8-10
Price: 67.79 to 68.84
Patent portfolio interested by Google, Apple, etc. The time period is in the middle of communication patent (4G) hikes.
YRC Worldwide Inc
Time Period: 2013-5-6 to 2013-5-28
Price: 15.48 to 19.5
Proposed merger with another freight company got rejected, unclear why the stock price hike in this period.
Business: Drug R&D
Time Period: 2015-9-2 to 2015-9-24
Price: 11.44 to 12.44
Weight Watchers International, Inc
Business: Personal Services (Weight Loss Training)
Time Period: 2015-10-20 to 2015-11-10
Price: 18.25 to 22.53
Oprah Winfrey announced her investment into the company.
Business: Aluminium production
Time Period: 2015-11-6 to 2015-11-30
Price: 8.19 to 8.77
Cause of Price Hiking in the time period mentioned above: unknown
Lsb Industries Inc
Business: Chemical manufacturing
Time Period: 2016-3-2 to 2016-3-23
Price: 9.19 to 12.27
Cause of Price Hiking in the time period mentioned above: unknown
Business: Building material wholesaling
Time Period: 2018-3-13 to 2018-4-4
Price: 34.04 to 34.14
Price hide due to merger with another building material wholesaler, expecting increased operation efficiency and related cost-saving effect.
AGM Group Holdings Inc
Business: Finance Technology (Chinese Company)
Time Period: 2018-6-13 to 2018-7-5
Price: 16.21 to 21.32
Merger news, possible 炒作 by Chinese investors
Business: Consumer Electronics
Time Period: 2018-5-11 to 2018-6-4
Price: 16.03 to 17.84
Battle Royale gaming trending brought increasing demand for headset from new players.
Gravity Co., LTD
Business: online gaming
Time Period: 2017-1-19 to 2017-2-9
Price: 20.60 to 21.21
- For historical signal backtesting, the ticker list currently used only contains common stocks currently listed on the exchange. Common stocks that were listed in the time period on which the back-test were conducted were missing. Thus the data only reproduced the results for part of the stocks that were then listed in the past.
The backtest algorithm have not been cross examined by another person and might contain bugs which produce inaccurate backtest result.
Data Source Notes
Quantopian Research Environment
get_pricing API will honor symbol change, return the same historial data for one company
/stock/%s/chart/ historial API will return old symobl data from the begining to the end of the symbol termination time, will return new symbol data from symbol effective time until most recent trading day.
The CIK maintained by SEC may be changed due to change of legal listing entity, but stock exchange may comtinue to allow using the original stock symbol for trading.
Current Best Signal
The current best trading signal in terms of maximum drawback and average return is RS_T1 (50%_20%_3), which is currently implemented as the online watcher.
Key Metric Interpretation
- Active buyers are those who have placed at least one order in the past 12 months, regardless of cancellation or returns.
Bank Management (Peter S Rose)
The asset weight of commerical banks among financial service providers declined from 66% to 25% in a century.
Citigroup as a global financial service provider is well diversified across three contients. Altough Citigroup is bearing the risk of global economic downturn, it's valution is at a low level compared to pre-2008 financial crisis. After 10 years of recovering, Citigroup are dumping legacy business assets to focus on remaining two business segment: consumer banking serivce and client banking service. The continous growth of adjusted stock price accompanied with the recovering key operation metrics reflects the market recognition of Citigroup's recent performance. I personally have confidence that Citigroup is back on track and can potentionally hit a post crisis new high if external environment is favorable. With such expectation, I would recommend buy-in Citygroup's stock at the current price level of $ 67.