Chinese clamor for low cost wireless phones

China is the only country where the personal access systems are popular. These systems consists of low powered handsets with a range of just a few miles that link to base stations in the user's home, which are connected to wireline networks belonging to China Telecom (CHA) and China Netcom.

It costs about 1.5 c/min compared with 5 c/min for celular and it is an adequate alternative for the vast underclass of China and other Asian countries such as Vietnam and India.

UTStarcom has had a fenomenal growth rate and has 70% of the handset market. Gfk Asia research firm says that about 21 million personal access-system phones will be sold in China this year and double that by end of 2004.

The company also sells specialized switches used by phone carriers to deliver high-speed Internet service to customers, having the leading DSL supplier in Japan, Yahoo Broadband, as its customer.

UTStarcom should profit well even with the increased competition offered by other companies such as ZTE Corp, China Putian (IPO soon), Huawei Technologies (IPO soon) and the cellular providers China Mobile (CHL) and China Unicom (CHU).

UTSI $37.88 on 11/29/2003	CHA $32.23 on 11/29/2003
CHL $14.61 on 11/29/2003	CHU $9.59 on 11/29/2003

These news may be worthy of due diligence

The port of Singapore, the second busiest container port after Hong Kong, lost a huge chunk of the traffic from the biggest shipping container lines (Maersk and Evergreen Marine) and numerous feeder lines. Tanjung Pelepas, in Malasia, is their new port of choice. Dubai also lost its role of Middle East trans-shipment hub to the port of Salalah, in Oman.

Maersk says that its loading operations in Tanjung Pelepas are 25% faster than it was in Singapore, giving a better reach in logistics and better deals with retailers like Walmart and Target, and Reebok and Ikea. Tanjung has larger cranes and deeper water to accommodate the next generation of huge container vessels.

PSA, Singapore's state-controlled port operator, had to cut its rates and sold stake on two terminals to the shipping line Cosco.

However, according to ACNielsen, the majority of people in Singapore think their economy will improve next year. The same happens in Hong Kong and South Korea. Asian consumers still have been tightly holding their wallets though.

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As the Thai stock market soars, government is looking for ways of curbing speculation to avoid another meltdown. In 1997, Thailand's growth spurt ended abruptly, triggering the Asian financial crisis. Now the government is wary of the boom in the property and equity markets in Thailand, curbing stock purchases made on credit, limiting the amounts held in foreigner's bank deposits and considering limits on real-estate credit. Thai property stocks more than doubled this year, land sales values increased 36% in the first semester. S&P says there is a lot of bad loans secured by nonproductive assets infecting 30% of the Thai financial system.

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As per CSM Worldwide, the real profit in US is based on volume sells of V-8 engines, SUVs and pickups. Toyota's new Prius hybrid (55 mpg and a lot more power) was named "Car of the Year" and it is selling 25% above projections, but Toyota is investing in pickup-trucks too. Hopefully, Prius will gain more mass appeal.

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US and foreign markets often rise and fall together, but large-cap US and foreign stocks often generate very different annual returns. Over the past 2 decades, there were 13 years when the performance differed 10%, according to a study by Meir Statman and Jonathan Scheid.

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After 3 years of rising rates, insurance rates for commercial property are expected to drop 10% to 20%. There are more of that kind of insurance in the marketplace now due to an influx of insurers from Bermuda and London and other factors.

Voice Over Internet Protocol (VOIP) seems promising

That is the technical term for Internet Phone Service. The internet has been largely unregulated by the government, and, as expected, innovation is sparkling on it. Sending phone calls over the internet is one of many emerging technologies moving quicker than regulators can react.

VOIP providers gives their customers an adapter to turn a high-speed internet line (either cable or DSL) into an internet phone and you can take the adapter everywhere in the world and pay the same low rates. Your phone number no longer has any direct relationship to where in the world you are located. This may be the end of long distance rates!

Companies like Vonage Holdings (private), Voiceglo and 8 x 8 Inc are on the crest of this wave.

If one believes the VOIP trend, the only public companies I found are 8x8 Inc (Nasdaq: EGHT), Net2Phone (Nasdaq: NTOP) and TheGlobe (OTC: TGLO.OB). But beware of the established phone companies like AT&T, Sprint, MCI, Bellsouth, SBC, etc. Verizon and Qwest are already about to launch their own internet phone services. They don't want to be left behind.

8 x 8 has two subsidiaries - Netergy Microelectronics and Centile, Inc. - that are VOIP providers and seems more promising to me.

EGHT $7.52 on 11/29/2003

NTOP $6.22 on 11/29/2003

TGLO.OB $1.59 on 11/29/2003

STOCK SPLITS

Companies split their stocks because they want the price to be low enough to entice more people to buy it. That usually propels the stock even higher. That is a cycle companies want to perpetuate. The important point is that the company that splits its stock is most likely doing well fundamentally. So, if one looks for companies that are splitting one will probably find companies that are fundamentally sound and are experiencing growth with regard to their stock price. The best of both worlds. Most companies that have stock splits see their stocks rally back to the pre split price within several months.

It is not so uncommon that a stock doubles after the split. Let's look at what happened to Nam Tai Electronics Inc ($36.10 on 11/24/03). In 7/8/2003 it splitted 2 for 1 (that is, every shareholder received 1 extra share for each share he already owned and the price was divided by 2). The post-split adjusted price was around $17, now it is around $36.

By the way, this seems to have been an excelent trading stock since then. It is easier to buy it at the bottom of the range, sell it high, and wait for it to go to the bottom of the range to do it again. Look at how it often goes higher several percentage points after approximating the 50 day moving average.