No Random Walking!

 Chesapeake Energy officials were on hand for a ceremony as drilling for natural gas began at Dallas/Fort Worth International Airport. (DMN)

The 18,000-acre airport sits on top of the Barnett Shale -- one of America's richest natural gas deposits which is spread across about 15 Texas counties and is estimated to contain about 26 trillion cubic feet of natural gas resources.

Chesapeake plans to eventually drill more than 300 natural gas wells directly beneath the airport but has not given an estimate on how much gas it thinks is lying in that location.

Links to Video and Text

If you are still skeptical about the potential of Chinese online services, think again! Today both The9 and Shanda posted profit that smashed analysts' estimates. What is really special about these surging profits is that they were achieved after the companies adopted the free-to-play model! Defying the earlier skeptics, these companies are actually making more money by offering the games for free while charging fees for virtual items such as weapons.

Both companies are making multiple-year high record in stock prices. I was right when I "discovered" those then under-valued stocks last year, but made big mistakes of having sold them too soon! (I sold SNDA at 22, it is now over 29. Sold Sina at upper 20s also, which is now around 40).

I am very positive on most of other online service providers also, especially those with some new services in the pipeline that will increase company's revenue significantly in the coming months.

An interview of Blackstone's CEO: Link to ??????CEO???????????????????-????-???

State Investment Co. will buy a nonvoting stake of less than 10 percent, Blackstone said on May 20. The investment company will hold its Blackstone shares for at least four years and isn't allowed to take an equity stake in a competing private-equity firm for a year.

Link to As private equity deals grow, so does public anxiety - Los Angeles Times

A seven-part series on economics of virtual trading, which happens to be popular among gamers in China also. Will read later.

Online fantasy games have booming economies and citizens who love their political systems. Are these virtual worlds the best place to study the real one?

Link to Game Theories

Below is an excerpt from Luqiu Luwei(????)'s blog ( ???????BLOG ). Luqiu is one of the news reporters for Phienix TV and is currently studying at Harvard University. She is one of the most prolific bloggers. Her blogs cover a wide range of topics related to what's happening in China.

???????????????????????????????????????490?????????????269????????????????????????????????????????????????????165??????????????????????1200?????????????????????294????????????????????5?8??????????????????????

Interesting ... 

... once the cells have been without oxygen for more than five minutes, they die when their oxygen supply is resumed.

Link to Docs Change the Way They Think About Death - Newsweek Health - MSNBC.com

I have been very impressed with the strength of Sohu, which until recently has been the worst performing company among the three Chinese portals. After some researches, I think the reasons for the strong performace of Sohu after the less-than-spectacular quarterly report could be the following:

1. The Olympia Games effect. As the official sponser and the games are only a year away, people are expecting Ads revenue to shoot up for Sohu. [Personally I doubt it because nowdays people can get news from different web sites.]
2. Google admitted that it used part of Sohu's word libraries in its own PinYin input tool. This dispute has increased the visibility of Sohu.
3. This could be the biggest reason of all: Sohu just released a internally-developed MMORPG TianNongbaBu (?????based on the popular noval of the same name on May 9. The initial reaction from the users have been positive. It's a free game but a user can buy goodies to empower him/herself. As of today, the game is the second most searched online game in China (ahead of the popular "???" but behand "?????". This popularity could be because it's a new game. Whether or not it will last is the key to its success.
4. All of above should increase the traffic at its portal sites, hence increasing the Ads revenues, Sohu's core business.
5. The last but not the least, Sohu has always been mentioned as a potential acquisition target by Google/Yahoo/Baidu/...

I think the strength will continue, with bumps on the way (e.g., big move that could happen after Sina's earning report on Monday).

Call it an irrational move, but I sold pretty much everything today (except for those which are still showing good relative strength). This resulted in heavy loss in some cases.

Although taking loss is painful, I think preserving cash is the most important thing to do at the moment. The way the market sold off today together with the weak retail sales report, on top of the recent market run-up, seem to suggest that the market is going to be rough ahead and the dropping is just starting!

Las Vegas Sands(LSV), a star in the gambling industry in US and Marco and one of the hottest stocks last year, has been a great stock to go short against since its quarterly report last week which missed the expectation. Even now, with a P/E close to 70, LVS is still a good and safe shorting candidate!

One more piece of data: A Stifel Nicolaus analyst upgraded the stock today, saying a steep sell-off in stock of the global casino operator has turned its stock into a bargain. Thank you, sir, for being so nice to the public!