Articles by mgedwards

Children's Grand Park

I missed out on my usual blog session yesterday, so I thought I would be prolific and write two blog entries today.  This morning my family and I went to Children’s Grand Park in East Seoul.  It has just about everything a child could want–a huge playground, botanical garden, a small zoo, a camel ride, an elephant theme show, and a water park where children can play in an artificial stream.  I have to admit, it’s pretty cool.  It only cost 900 won (90 cents) per adult, and young children are admitted free of charge (parking is a bit pricey).  You can’t beat that price.  We still spent 14,000 won for lunch and a few thousand more for some drinks and snacks, but all in all it’s a cheap date.  The elephant theme show costs 6,000 won (about $6.00) per person.  We decided to pass on the show.
 
My son had a great time at Children’s Grand Park.  He played for about an hour on the playground, sliding down slides, playing on the teeter-totter and on all sorts of kiddie rides.  He had the most fun at the water park .  If you come to the Children’s Grand Park, be sure to bring a swimsuit and towel for each child.  We didn’t and had to improvise.  Our son waded into the water in his daiper.  By the time he was finished, it weighed about a pound after soaking up water!  He had a great time playing in the water, climbing on the rocks, sitting in the boat, and climbing the small step waterfall.  After he finished, daddy lent his shirt to dry him off.  I’m sure I elicited some stares from onlookers as I took off my shirt to use as a makeshirt towel.  After all, everyone around us was Korean.  It reminds me of a time in 1994 when I visited rural China.  A freakish rainstorm drenched me as I walked in the countryside.  I sought refuge in a kind peasant woman’s house.  Not thinking, I took off my shirt to wring it dry on her dirt floor.  I’m sure I broke just about every rule of etiquette doing that!  I’ve wizened up a bit since then (I hope).  I’m sure she didn’t know what to make of this person who was probably the first Caucasian she had ever seen in her life. 
 
After we left the water park, we visited the park zoo.  My son was especially enthralled with the monkeys and the lions.  He loves the animated features "The Lion King" and "Madgascar," whose main characters are lions.  I pointed out "Simba" and "Alex," his favorites.  For the first time, he encountered many of the animals he read about in books and played with as toys, including an elephant, zebras, ostriches, tigers, kangaroos, and yaks.  I wonder whether these animals lived up to his expectations, because live animals are really never as cute and cuddly as their stuffed or drawn counterparts.  Next to the elephant pen, we saw a film crew filming the park.  I’m not sure why they were filming; perhaps they were filming a scene for a Korean drama.  Perhaps my family inadvertantly became extras in the film.
 
The park is very much a family-oriented park.  I saw some childless couples but nary a single person.  The majority of the park visitors clustered in families.  I saw some families visit without the fathers, many of whom have to work on Saturdays.  It’s interesting that Korea is a very family-friendly country, yet at the same time it has the lowest fertility rate of any OECD country (just 1.19 children per woman in 2004–the OECD represents the world’s top 30 economies).  Korea is going through a so-called "kid crisis" where the population is increasingly aging (7.2% of the population was aged 65 or over), and fewer and fewer couples are having children.  The park today was filled with families.  I saw more families here than I’ve seen elsewhere in Seoul.  Central Seoul is very much dominated by singles and couples.  I see very few children in Seoul beyond the school girls and boys who use mass transit to travel to and from school.
 
Thought of the day:  I thought it very odd that Children’s Grand Park would feature a plastination exhibit.  A macabre art form developed by Gunter von Hagen in Munich, Germany, plastination is very creepy to those who are squeamish about death and an affront to those who believe in the sanctity of the body after death.  Plastination is a process by which those who donate their cadavers are embalmed with plastic rather than formaldehyde and then carved into artistic art forms.  The plastination exhibit at Children’s Grand Park was well advertised throughout the park with vivid images of corpses that underwent plastination, including fetuses and deformed children.  I kid you not (no pun intended).  When I was in Munich in 2003, I thought about visiting BodyWorlds, home of the plastination phenomenon.  However, my American traveling companions thought I was crazy.  Plastination grossed them out.  I caved in to peer pressure and did not visit BodyWorlds while in Munich.  I personally find plastination intriguing.  I am amazed by the fantastic creations that result from plastination, and I’ve pondered what would prompt someone to donate their body to be plastinized and put on display.  Instead of being buried, one’s body ends up in an artistic exhibit for all the world to see.  Not surprisingly, plastination conjures all sorts of moral and ethical issues.  I am an American who finds plastination fascinating, yet I still think it is in very poor taste having a plastination exhibit on display at a children’s park.  This is especially true with regard to the photos of the fetuses I saw.  I wondered whether Koreans have objected to this exhibit.  Considering that Korea may be the first nation to clone a human being, I would not be surprised if Koreans generally do not object to plastination exhibits at a children’s park.  The COEX Mall also has a plastination exhibit, indicating that Koreans find this odd mummification process very fascinating.  I’m certain many Americans would be appalled.

Should you Baidu?

On August 5, Baidu.com will
list ADSs (American Depository Shares) on NASDAQ (symbol BIDU). 
Baidu, which means "100 levels" in Chinese, is China’s largest search
engine and the 7th most globally trafficked Web site.  Privately
Baidu will only float about 3.7 million shares and will IPO between $19
and $21 per share.  It is a highly anticipated public offering,
and it will likely IPO at $21/share and will rise quickly on the
first day of trading.  Because the underwriters are CSFB and
Goldman Sachs, it will be a traditional IPO.  Thus, average Joe’s
like myself will be locked out of this IPO opportunity (I am a strong
proponent of auction IPOs because traditional IPOs participants are
typically limited to institutions, high net-worth investors, and
special guests). 
 
I’ve been mulling over buying some shares at the outset, likely at
a higher price than the initial price of $19-$21.  This investment
is a very risky one, but there is a tremendous amount of potential
that Baidu will be a stellar buy.  First, the negatives.  If
Baidu.com’s ADRs list at $20 per share, the price-to-equity ratio for
BIDU shares will be 528.  This is far, far higher than the P-E
ratio for any major tech stock, including Google.  It is very
overvalued–on paper.  The question is whether a small,
market-leading company in the world’s fastest growing Internet market
will expand quickly, bringing down the P-E ratio.  Secondly,
Baidu.com is the search engine leader for China, beating out Sina.com
and Sohu.com, two other larger, older China Internet plays. 
It is very much like Google, with a spartan, no-frills interface. 
However, Google is quickly making inroads into China and is especially
popular among Chinese who speak foreign languages.  Google is the
800-pound Gorilla of search, and there’s a big risk that Baidu will
lose its place as the king of Chinese search.  Thirdly, the
Chinese Internet market is growing, but volatile both financially
and politically.  While Internet search in China is growing
by leaps and bounds, this nascent market is fraught with risk. 
It’s still unclear whether search will be a very profitable endeavor in
the Chinese market.
 
Now for the upside.  This IPO will be HOT.  For those
who missed out on the Google IPO, Baidu.com will be a second chance to
get in on the ground floor of the fast-growing Internet search
market.  Initial buyers will disregard the sky high P-E
ratio.  The question is–at what price is it savvy to buy shares,
and at what price is it foolish?  Secondly, Google owns 2.6% of
Baidu.com, indicating that global search leader Google highly
regards Baidu’s growth prospects.  It has been speculated
that Google will buy Baidu outright to quickly enter the
Chinese search market.  However, it’s also been noted that Google
may opt to go it alone, making Google a formidable competitor to
Baidu.  Also, Chairman & CEO Robin Li and others will
continue to own a large majority of shares after IPO.  I believe
it’s good when a company’s executives have their wealth tied
to their company, because they have a personal interest in their
company’s success.  Plus, they lock away shares, discouraging
share dilution.  Thirdly, at present it appears that Baidu’s
Internet search engine technology is superior in terms of handling
Chinese search.  Chinese characters are unicode, not ASCII. 
As a result, Google and other potential competitors must built of their
unicode search indexes.  In this respect, Baidu is at the
forefront and should dominate Chinese language search, at least in the
next few years.  Chinese who speak only Chinese will prefer
Baidu’s search capabilities.  Google would do well to buy Baidu
and incorporate it as its unicode language (primarily East and
Southeast Asian languages) search engine.  (Google recently opened
a research center in Shanghai to beef up its unicode search, but it is
currently embroiled in a legal dispute with Microsoft for hiring away
one of its top Chinese executives.) 
 
In short, I plan to buy Baidu.com ADRs shortly after IPO.  I
think it will be a great long-term buy, at least in Internet
time.  I have that same good feeling I had with a couple of other
choices, including Google, Morningstar, and Cogent Technologies. 
But I will not buy Baidu if the price exceeds $25 at open. 
Keep in mind, some risky bets turn sour.  Last week Infospace, a
stock I own, announced its 2Q results.  Although it beat analyst
expectations by 6 cents per share, it slashed its outlook for the rest
of the year dramatically.  The stock dropped 35% in one day. 
I didn’t lose too much because I didn’t have a big stake, but it
reminded me that investing can be risky.  In the case of
Infospace, nothing could have indicated they would revise their
forecast by so much.  Most analysts rated them a buy, and in the
aftermath most analysts changed their ratings from buy to hold or sell
and slashed their price target by about $20.00.  I feel that
Infospace mislead investors and analysts and opened themselves up to
shareholder lawsuits.  If there are any class action lawsuits, I
would definitely sign on.  What Infospace did shafted share
holders.  My recommendation changes to a strong "Don’t buy"
if you don’t own Infospace shares.
 
Here are some research links if you would like to research the upcoming Baidu IPO further:
 
 
In case Internet search is not of interest to you, you could also
invest in Tim Hortons, a staple in Canada.  Known for its donuts,
Tim Hortons is very popular north of the border and in the northern
U.S.  Wendy’s International, parent company of the hamburger
chain, owns Tim Hortons and will spin off up to 18% of Tim Hortons in
an initial public offering.  I haven’t looked at the
company’s financials to see if it will be a good investment. 
Fortunately, it is not a tracking stock, and Tim Hortons has a cult
following similar to Krispy Kreme.  Krispy Kreme, which in my
humble opinion makes much tastier donuts, used to be a darling stock
until it over-expanded and was caught doing shady account.  If Tim
Hortons financials are sound, and it has a realistic expansion plan
into the U.S. and elsewhere, it could be a decent buy.

When it rains, it pours

I knew it was going to be a crazy day when I stepped outside today.  I rushed to catch the shuttle and didn’t have time to grab an umbrella.  I knew it was raining, but I didn’t realize just how torrential it was.  I have not seen such a heavy downpour for ages!  It literally seemed as if someone had turned on heaven’s faucet.  I rushed out to the shuttle stop not far from our home, and within moments I was drenched.  I had no where to go but inside the shuttle stop shelter, and I had to wade through a swallow lake of water to get there.  I was soaked from head to toe.  I stood inside the shelter and waited for the shuttle to arrive.  In the meantime, I heard thunder claps nearby.  Oh great, I thought wistfully.  Here I am standing over a lake, soaking wet, and in the middle of a lightning storm.  I hadn’t felt so nervous since I was on a salty beach on Antelope Island at the Great Salt Lake in Utah, a mile from my car, running back to it and watching in awe as a lightning storm approached.  I felt like a cornered, drowned rat.  The shuttle was late, battling the rain.  When it finally arrived, I had no choice but jump back into the lake of water and wade through it to the waiting shuttle bus.  What a miserable start to a very long day.
 
After that, the day didn’t get much better.  I put out a few proverbial fires at work and hustled to catch a car to Daejeon with my Korean translator.  We drove in the pouring rain down to Daejeon to visit with some Americans held there.  I spent about an hour with them, gathering their requests and ensuring they were treated well.  Then, after a brief lunch, we drove back to Seoul.  It was an all day endeavor visiting Daejeon, and I didn’t get home until 7:30 tonight.  (Daejeon is about two-and-a-half hours south of Seoul on Interstate 1.)  The trip was even slower than expected because driving visibility was so poor.  We almost had to drive from Daejeon to Incheon tonight to do something important, which would have brought me home after 9 p.m.  I wish I could say that not going to Incheon today was a welcome change.  Unfortunately, not going to Incheon today means that I will have to wait until Tuesday to finish something important.  If I had gone to Incheon today, it would have been done tomorrow.  Now I have to wait four more days to get it done.  When I got home tonight, I was contacted by the person I was supposed to meet in Incheon.  Sometimes work finds you!  I wish the work always ended when I left the office, but sometimes it follows you homes.  Cases are piling up, and tomorrow I have a stack to work on in the office.  The sound of pouring today was not merely caused by rain.  It was also the sound of work raining down on me.  I can’t wait until next Tuesday, when this latest round of issues is resolved.