by Junheng Li
Economic growth:
and consumerism, 133-136
and future of Chinese economy, 245-246
and mid-cycle analysis, 189-190
quality and quantity of, 163-164
Economic stimulus plan, Chinese, 154-156, 170-171, 223-224
Economics classes, 62-64
Education, 236-244
during childhood, 26-29
in China vs. America, 53-54, 238-241
at Columbia Business School, 3, 72-74
in Cultural Revolution, 18
father’s role in, 9-10, 26-27, 31, 47
idea- vs. knowledge-based, 2, 240
at Middlebury College, 2, 53-67
at SISU, 48-51
Education sector, investments in, 197-201
Efficient market hypothesis, 251
Einhorn, David, 97
Elicitation techniques, 75-76
eLong, 184-185
English, learning, 47-52, 56
English First, 115
Enron, 176
ERA Mining Machinery Ltd., 173
“Ernie” (“Sunlight Systems” competitor), 85
Ernst & Young, 164
Ethics:
in Chinese culture, 147-148
honor code at Middlebury College, 54-59
universal code of, 2
European Union, bank bailouts in, 225
Everbright Bank, 233
Executives, grading of, 214
Expedia, 184
Failure, 15
Fan Min, 185
Father:
and author’s education, 9-10, 26-27, 31, 47, 240
on blind belief, 20-21
Cultural Revolution and experiences of, 17-21, 61
current life of, 247
encouragement from, 110-111
factory job of, 29-30
interest in American news and culture, 46-48
involvement in author’s childhood, 29-33
job and wages of, 24
parenting style of, 2, 9-11, 26-27
SISU visit with, 51
vacation in Thailand with, 139-144
viewing Gone with the Wind with, 35-37
Fiduciary Trust Company International (Franklin Templeton Fiduciary), 3, 70-72
Financial crisis (2007-2009), 106-110
Financial industry, Shanghai, 125-131
Financial markets:
bubbles in, 3-4, 107-108, 236
first interest in, 45-46
inefficiency in, 194-195, 251-254
Financial reports, fabricated, 175-176
First Solar, 197
Fitch, 233
“Five-bagger,” 118
Food safety, 149-152, 206-211, 216
Foreign brands, 135, 210
45-day chicken scare, 206-211
Franklin Templeton Fiduciary (see Fiduciary Trust Company International)
Fraud:
at “China Little Fertilizer,” 164-165
and Chinese IPOs, 129-131
investigations of, 165-170
and M&As with multinational corporations, 170-176
and reverse mergers, 127-128
Frauds (short sale candidates), 83
Freedom:
in American education system, 53-54, 59, 243
as American ideal, 36
in childhood, 25-26
and human rights in China, 153
and Tiananmen Square demonstration, 40
Game theory, 63-64
Gang of Four, 18-19
Gaokao system, 242
Gardner, Helen, 65
Garmin, 90-91
GDP, in top-down analysis, 182, 183
General partners, 74
“GET” (see “Global Education and Technology”)
Gifts, luxury goods as, 157-159
“Global Education and Technology” (“GET”), 114-115, 117, 171-173
Global Financial Integrity, 160
Global investing, 255-258
Globalization, 94
“Go out” initiative, 95
“Going dark,” 128
Gold, Jason, 74, 92, 110
advice on “CLF” from, 123
on Chinese IPOs, 95, 98-99, 104
and financial crisis, 106, 107
first interview with, 13-16
on good companies and good stock, 82
grading of executives by, 214
investigative research method of, 75-76
phone call training with, 76-78
Goldman Sachs, 109, 167, 236
Goldpebble, 193-194, 196, 202-203, 207
Gone with the Wind (film), 35-37
Gone with the Wind (Margaret Mitchell), 37, 50
Google, 92, 177
Government expenditures, 224-226
Government subsidies, 103-104, 224
Graft, 30
Grand Bargain, 41
Grandfather (paternal), 18
“Grandma Yangyang” (neighbor), 26, 136-138
Grandmother (maternal), 21, 43, 44
Great Leap Forward, 60, 244
Greenberg, Hank, 167
Green-tech companies, 101-104, 108, 110
Gross domestic product, in top-down analysis, 182, 183
Growth model of Chinese economy, 6
Hedge fund managers, 72-74
Hedging, 119-120
Herbalife, 197
Hewlett-Packard, 218
High-frequency risk, 236
History, in education, 243-244
Home, childhood, 24-25
Honor code, 55-59
Hope, 61-62
Housing crises, 106-108
Housing reform, 38-39
Hsieh, Louis, 200
Huaxia Bank, 234, 235
Human rights, 153
Hypes (short sale candidates), 83
IBM, 218
ICBC (Industrial and Commercial Bank of China), 142, 222, 225
ICR Consumer Conference, 216-217
Idea-based education, 2
Independence, board of directors’, 176
Industrial and Commercial Bank of China (ICBC), 222, 225
Industrial Revolution, 187-188
Initial public offerings (IPOs):
CFOs for, 122
fraud and, 129-131
IPO road show, 113-117
and reverse mergers, 126-128
three waves of, 94-98
Innovation, 148, 229
Insider trading, 172
Instant alphas, 117-120
Intellectual property, 99-103
Internet, Chinese, 176-181
Internship, M Capital, 64-65
Investigative research, 191-220
at Aurarian Capital Management, 16, 74-80
on Chinese stocks, 196-204
and influence of state media on businesses, 217-218
at JL Warren, 111
and market inefficiency, 252
meeting with Yifeng, 191-196
need for, 4
and past performance as indicator of future success, 219-220
for special situation investments, 196-204
on Western multinationals operating in China, 204-220
and x factors in China, 204-217
Investing:
advice on, 6-7, 251-259
trading vs., 187-190
Investment, domestic consumption and, 227
Invisible hand, 62-63
IPO road show, 113-117
IPOs (see Initial public offerings)
Jacques, Martin, 170
Japan, 246
Jasmine (sister), 11, 24, 133-136, 147, 152, 239, 248
Jing An District (Shanghai), 24
JL Warren (author’s company), 248
father’s investment in, 142-143
gifting estimates from, 157
investigations of WMPs by, 235
starting, 4, 110-111
Jobs, Steve, 217
“Joe” (client), 77-78
J.P. Morgan, 176, 197
KFC China, 204-217, 256
, 258
Knowledge arbitrage, 195-196
Knowledge-based education, 2, 240
“Knucklehead” (trader), 118-120
Korea, 246
Land titles, leasing of, 226
Langone, Ken, 212, 214
“Lau, Jackie,” 121-122
Lay, Kenneth, 176
Learning how to think, 67
Lee, Ann, 171
Lehman Brothers, 186
Leigh, Vivien, 35-36
Lenovo, 218
Li Gang, 149
Li Lu, 185
Li Peng, 146
Liar loans, 107
LinkedIn, 84-85
“The Little Match Girl” (Hans Christian Andersen), 28, 67
Little Sheep, 216
“Little Uncle,” 43-45
Liu Zhijun, 153
Living standards, 23-24, 46, 136-138
Local government expenditures, 224-226
Lockup period, 122
Longtop Financial Technologies, 167-169, 195
Love, 10, 11, 141-142
Lululemon, 252
Luxury goods, 133-135, 156-160, 208
LVMH, 156, 159
M Capital internship, 64-65
Ma, Jack, 97
Macau, casinos in, 155
Macro calls, 182
Macroeconomic data, 182-183
“Manfred” (at “Sunlight Systems”), 84-85
Mao Zedong, 17-19, 21, 60, 145, 244
Market bubbles, 3-4, 107-108, 236
Market inefficiency, 194-195, 251-254
Market value, stock, 188
McDonald’s, 210
Medi Spa, 78-79
Media, Chinese, 46-47 (See also China Central Television [CCTV])
Mengniu, 150
Mergers and acquisitions, 170-174
Mid-cycle analysis, 188-190, 258
Middle class, Chinese, 137-138
Middlebury College, 2, 15, 52, 240
art class, 65-67
economics classes, 62-64
educational experiences in China vs. America, 53-54
honor code and cheating, 55-59
M Capital internship, 64-65
students’ behavior at, 54-55
viewing of To Live (film), 60-62
Milk powder scandal, 149-151
Ministry of Education, 239
Ministry of Finance, 225
Mistress economy, 157-158
MNCs (see Multinational corporations)
Monetization, 177
Morality, 145-147, 175
Mother:
Cultural Revolution and experiences of, 21, 61
current life of, 248
garment import-export business of, 30, 42-43
housekeeping by, 25, 46
job and wages of, 24
music instructor’s treatment by, 32
qualities inherited from, 14-15
MSN, 207
Muddy Waters, 128, 165-171, 174, 196, 197, 200-204
Multinational corporations (MNCs):
in China, research on, 204-220
transparency problems for, 170-176
valuation of, 195, 219-220
Music, 20, 32
Mutual fund managers, 72-73
Nanjing, China, 222
Nanjing Road (Shanghai), 134, 137, 163
Nasdaq, 96, 98, 164, 176
National Bureau of Statistics, 182, 183
Neighborhood, childhood, 25-26, 49, 136-138
New Oriental Education & Technology Group, 96, 197-204
New York City, 124-125, 248-249
“Nick” (friend), 126, 127, 129, 164
“Nikolai” (classmate), 57-59
Novak, David, 212-214
One-child policy, 198-199
Online travel industry, 184-185
Opportunity cost, 63
Oversubscribed (term), 117
Parenting style, 2, 7-11, 26-27
Past performance, 219-220, 257-258
Paulson, John, 166-167
Pearson, 171, 172
Pei, Minxin, 154
The People’s Daily, 46, 218
Pershing Square fund, 197
Pettis, Michael, 236
PF Chang’s, 219
Phone calling (research technique), 76-80
Piggybackers, 97
Pitch books, 70
Pollution, 50, 151, 221
Poverty, 23-24, 26
PPR, 156
Pride, 11
Principal-agent problem, 256-257
Private equity, 130
Privatization, 38-39
Progress, 37-38, 105
Qihoo, 180-181
Quantum Fund, 181
Questioning, 27, 67
Rand, Ayn, 203
R&D programs, 99-100, 148
Real estate market, Chinese, 49, 236
Red Guard, 19
Red Party, 114-116, 130, 256, 257
Redemption, 108
Reeducation, 18
Reform and Opening Up program, 23, 35, 37-40, 145, 187
Religion, 134, 145-147
Research business trips:
for Aurarian Capital Management, 93-94
at Fiduciary Trust International, 71
first trip to China as an investor, 98-106
(See also Shanghai research trip [2010-2011])
Retail stock, 123-124, 204
Reverse mergers, 126-128, 130
Richemont (see Compagnie Financière Richemont SA)
Risk factors, Chinese stock, 257
“Robert” (friend), 126, 129
Rogers, Jim, 181-182, 184
Rogers, John, 84
Rupert, Johann, 159
SAC Capital, 14
SAIC (State Administration for Industry and Commerce), 180
Saint-Saens, Camille, 32
Samsung, 218
Scalping, 41-42
Securities and Exchange Commission (SEC):
insider trading lawsuit by, 172
investigations of Chinese companies by, 164, 167, 169-170
reverse mergers and, 126-127
treatment of Chinese IPOs by, 97, 98
Shadow banking, 223, 230-236
Shanghai, China, 222
financial industry in, 125-131
life in, 54, 247-248
reform movement in, 37-39
Shanghai International Studies University (SISU), 48-51
Shanghai Jiao Tong University, 192
Shanghai research trip (2010-2011), 124-131, 133-138
economic growth and consumerism, 133-136
financial industry in Shanghai, 125-131
living standards of family, 136-138
modern Chinese culture, 145, 160-161
motivation for, 124-125
vacation with father, 139-144
Shanghai Stock Exchange, 45
Shanghai No 2 Toy Company, 43
Shared beliefs, 148-149
Shin Kong Place, 156
Short selling, 80-83
of China-based investments, 104-106, 120-124
of clean-tech stock, 83-88
in housing crisis, 107-108
and Muddy Waters’ fraud investigations, 166
Short squeeze, 81
Sina, 176, 193-194, 207
Sino-Forest, 166, 195
Sinovel, 103
SISU (Shanghai International Studies University), 48-51
Small and medium-sized enterprises (SMEs), 227-229
Small-cap stocks, 253-254
Smith, Adam, 62-63
Social trust, 148-149
Socialism, 62
SOEs (state owned enterprises), 155-156, 227-229
Sony, 91
Soros, George, 181
Special situation investments, 196-204
Sports culture, 241-242
Starr International fund, 167
State Administration for Industry and Commerce (SAIC), 180
State media, influence of, 217-218
State owned enterprises (SOEs), 155-156, 227-229
State-controlled banks, 222-225
Stock:
Chinese (see Chinese stock)
good companies vs. good, 82-83, 254-255
Stop-loss rules, 81-82
Strangers, helping, 148-149
Students’ behavior, 27-29, 54-55
Su Hai Group, 206, 211
Success, future, 219-220, 257-258
Sun Tzu, 87
“Sunlight Systems,” 83-88, 122-123
“The Swan” (Camille Saint-Saens), 32
Swatch Group, 156
Tai Xing Road (Shanghai), 24, 136
Taiping Rebellion, 147
Taobao, 208
Tencent, 185, 207
Test of English as a Foreign Language (TOEFL) examination, 48-52, 200
Testing, in schools, 27-28, 56-59
Tiananmen Square demonstration, 39-41, 146
To Live (film), 60-62, 244
TOEFL (Test of English as a Foreign Language) examination, 48-52, 200
TomTom, 91
Tongshang Guoyin Asset Management Company, 234
Top-down approach for investing, 181-187
Toshiba, 218
Trading, investing vs., 187-190
Transparency, 170-176
Travel industry, online, 184-185
Tribeca Grill, 192
Trust, 59, 148-149
Tudou, 202
United States:
bank bailouts in, 225
China as threat to, 6
Chinese investment in, 141, 152, 160
desire to go to, 2, 35-52
economy of China vs., 5-6
education system of China vs., 238-239
goals of American vs. Chinese companies, 105
preparing to go to, 48-52
shadow banking in, 230
Urbanization, 214-216
Valuation:
of Chinese companies, 121-122, 186-190, 258
of multinational corporations, 195, 219-220
Valuation inefficiency, 194-195
Variable interest entity (VIE) structures, 96, 198
Voice of America radio broadcasts, 2, 47
Wang, Gary, 202
Wealth management products (WMPs), 232-236
Weibo, 193-194, 207
Wenzhou, China, 229-232
What the U.S. Can Learn from China (Ann Lee), 170-171
When China Rules the World (Martin Jacques), 170
Winn, Peter, 114-116, 125, 198
WMPs (wealth management products), 232-236
Women:
in American popular culture, 36
in mistress economy, 157-158
reputation of Shanghai, 25
Work, addiction to, 65, 92-94
Work ethic, 70, 92-94, 249
WuXi PharmaTech, 197
X factors, 204-217
Xi Jinping, 159
Xiao Gang, 234
Xinhua, 217
Yahoo, 97
Yang (family friend), 41
Yianjie (classmate), 27-28
Yifeng (of Goldpebble), 191-196, 202, 208
Youku, 176
Yu, Michael, 201-202
Yum! Brands, 204-217, 219, 220, 256
Zhang Yimou, 244
Zhengzhou Siwei, 173-174