Stock Analysis Just Like Sports

Welcome back! Actually, that was a message for me.

Truthfully, I didn't think anyone was reading this...so I stopped spending my time writing posts to this blog. (Plus, I've been working on other projects.)

A thought occurred to me last night.

As I read or listen to sports predictions, it amazes me how often things replay themselves--including people's analysis of sports events as they unfold.

For basketball and hockey, it's playoff season. So there is all sorts of analysis. A lot of this analysis tends to be extreme.

Every year, teams will play best-of-seven series. The format (usually) is that the higher ranked seed gets to play their first two (2) games at home. The next two games are played at the other team's (lower seeded team's) home arena.

At some point during the playoffs, the home team wins the first two games.

To me, that seems pretty logical. They were ranked to be the "better" team, and they had the more favorable conditions of playing at their home stadium in front of friendly fans.

However, every year, you see sportswriters doom the lower seeded team, even though they have not played a home game, yet. A lot of the fans follow in the jubilation or panic--depending which team they want to win.

There are plenty of times when a team loses the first two away (non-home) games, but they eventually win the playoff series. You'd never guess that by the headlines that people write.

What do sports playoffs have to do with the stock market?

Quick Analysis: Baidu Inc. (BIDU)

BIDU: Baidu Inc

Internet Search Engine: uses Chinese Characters

Recent Range: $15/share – $110/share (Current Price: 101.25, as of close of 12/21/10)
Price/Sales (P/S) = 34.92 (10.24, Industry)
Price/Book (P/B) = 32.55 (7.89)
Gross Margin = 70.7% (64.6%)
Pre-Tax Margin = 48.2% (34.3%)
Debt/Equity Ratio = 0.00 (0.04)
Current Ratio = 3.6 (4.3)
Return on Equity = 48.5% (23.0%)
Return on Assets = 37.9% (18.0%)

Analysis: This company is definitely in a hot industry within a hot geographic region (China). It also appears to manage its money really well. I really like the company, but I am afraid of the stock.

Stock Market: Am I the only one excited by this sale?

The stock market is going DOWN!

Isn't that awesome?

If you've been following my blog, you'll realize that I'm NOT being sarcastic about this.

It's Splitsville for Baidu (BIDU)

Wow! I just looked at the price for Baidu (BIDU), the China version of Google.

The indicator said that it went up, but the price was below $100/share.

Eventually, I figured what happened.

The Baidu (BIDU) Bounce--One Time Deal or a Glimpse of Chinese Way of Doing Buisness?

Wow! A week ago, I never heard of Baidu (BIDU).

Many of you have, but for those who are not familiar with this company, it is sort of the Google (GOOG) of China. Baidu provides Internet searches using Chinese characters, which removes the need to know English--pretty big if you live in China and don't know English.

I heard there are a couple of people who live in China--say 1 billion or so. So there isn't any market, is there? Nah!

I'm learning about Baidu, still, but the Google-like connection gives it some intrigue.

You know what else makes it intriguing? Today, it jumped from $620/share or so to OVER $700. In fact, earlier this morning, it reached as high as $718/share.

What caused THAT?