Tiger Woman on Wall Stree
Page 25
103 have filed for bankruptcy
http://money.cnn.com/2013/03/21/news/suntech-solar-bankruptcy/index.html
110 first quarter of 2009
http://online.wsj.com/article/SB123984767545423661.html
CHAPTER 9
117 in 2008
http://www.renaissancecapital.com/ipohome/review/2010review.pdf
117 same period
http://www.dailyfinance.com/2010/12/05/a-new-record-six-chinese-ipos-to-hit-u-s-markets-in-a-week/
127 traditional IPOs
Public Company Accounting Oversight Board, Activity Summary and Audit Implications for Reverse Mergers Involving Companies from the China Region: January 1, 2007 through March 31, 2010, Research Note # 2011-P1 (March 14, 2011). Accessed through http://www.sec.gov/news/speech/2011/spch040411laa.htm#P77_41374
128 no longer filing with the SEC
PCAOB, http://pcaobus.org/News/Speech/Pages/09212012_FergusonCalState.aspx
CHAPTER 12
147 Qing rulers
Stephen R. Platt, Autumn in the Heavenly Kingdom: China, the West, and the Epic Story of the Taiping Civil War (New York: Knopf, 2012)
148 market in China
http://www.nextgen-china.com/admin/Southidceditor/1.pdf
149 in prison
http://www.chinahush.com/2010/10/21/sue-me-if-you-dare-my-dad-is-li-gang/
149 tainted milk powder
http://www.telegraph.co.uk/new s/worldnews/asia/china/3074986/Chinese-ordered-cover-up-of-tainted-milk-scandal.html
150 inspection-free privileges
http://www.bloomberg.com/apps/news?sid=aenM_612o.4c&pid=newsarchive
150 Chinese dairy products
http://www.ndtv.com/convergence/ndtv/story.aspx?id=NEWEN20080066441&ch=9/23/2008%208:19:00%20PM
150 short-term profits
http://www.voanews.com/content/a-13-2008-09-26-voa45/403825.html
151 court cases in China
http://www.reuters.com/article/2009/01/02/us-china-melamine-idUSTRE50112220090102
152 signaling equipment
http://www.nytimes.com/2011/12/29/world/asia/design-flaws-cited-in-china-train-crash.html?_r=0
153 railway’s rapid construction
New Yorker, 2012, http://www.newyorker.com/reporting/2012/10/22/121022fa_fact_osnos
153 little girl alive
http://www.forbes.com/2011/07/27/china-train-crash-opinions-contributors-rescue-xiang-weiyi.html
154 on education
http://carnegieendowment.org/files/pb55_pei_china_corruption_final.pdf
156 at SOEs
http://www.chinadaily.com.cn/bizchina/2012-08/22/content_15694719.htm
156 30 to 50 percent annually
http://europe.chinadaily.com.cn/business/2013-05/31/content_16550756.htm
156 world’s luxury products
Bain & Company’s China Market Study, 2012, http://www.scmp.com/news/china/article/1109728/chinese-consume-one-quarter-worlds-luxury-goods-says-report
157 47 mistresses
http://www.guardian.co.uk/world/2013/jan/05/chinese-corruption-crackdown
157 in Chongqing
http://news.xinhuanet.com/english/china/2013-05/07/c_132365731.htm
159 20 years’ time
http://www.richemont.com/images/investor_relations/results/annual_results/2012/annual_results_transcript_fy2012_ui36ze82bna.pdf
159 to call off its expansion
http://www.marketwatch.com/story/china-luxury-apparel-and-accessories-market-report-2012-2015-2013-07-18
160 between 2001 and 2010
Illicit Financial Flows from Developing Countries: 2001–2010, http://iff.gfintegrity.org/iff2012/2012report.html
CHAPTER 13
167 $400 million market cap
http://www.wantchinatimes.com/news-subclass-cnt.aspx?id=20110322000107&cid=1102
167 $1 billion
http://www.nytimes.com/2011/05/27/business/27norris.html?pagewanted=all&_r=0
167 were inaccurate
http://www.sec.gov/Archives/edgar/data/1412494/000095012311052882/d82501exv99w2.htm
168 preclude the possibility of fraud
http://newsandinsight.thomsonreuters.com/Legal/News/2013/04_-_April/Deloitte_s_China_unit_wins_dismissal_of_fraud_claim_over_audit/
http://www.reuters.com/article/2013/05/28/us-usa-auditing-china-deloitte-idUSBRE94R0RG20130528
172 insider trading
http://www.ft.com/cms/s/0/0b916fda-202f-11e1-8462-00144feabdc0.htmla
172 By mid-2013
http://www.sec.gov/litigation/litreleases/2012/lr22508.htm
173 $887 million
http://online.wsj.com/article/SB10001424052970204358004577029553247909414.html
173 against its earnings
http://www.bloomberg.com/news/2013-01-18/caterpillar-to-take-580-million-writedown.html
173 Caterpillar was alerted
http://www.caterpillar.com/cda/layout?m=393518&x=7&id=4326216 &mode=noNav
175 Today, the process
http://books.google.com/books?id=n-IwJdFn3JYC&pg=PA157&lpg=PA157&dq=Supreme+People’s+Court+of+China+securities+litigation+2001&source=bl&ots=7sVYFNfXjA&sig=rS8SQ6v-mYKEuSRPezwDFk1mUHg&hl=en&sa=X&ei=f8a0UcbDB83LqQHTr4CIDQ&ved=0CC0Q6AEwAA#v=onepage&q=Supreme percent20People’s percent20Court percent20of percent20China percent20securities percent20litigation percent202001&f=false
175 in favor of investors
Roman Tomasic and Neil Andrews, “Minority Shareholder Protection in China’s Top 100 Listed Companies,” p. 5
185 year on year
http://www.iresearchchina.com/views/4611.html
185 price war for many years
http://www.morningwhistle.com/html/2013/commerce_0201/217015.html
186 HK$8 per share
http://www.byd.com/na/aboutus/milestones.html
187 car demand
http://online.barrons.com/article/SB50001424052748704836204578362533369655220.html
CHAPTER 14
193 mid-2013
Nasdaq
193 500 million registered users
http://news.xinhuanet.com/tech/2013-02/21/c_124369171.htm
197 pyramid scheme
http://money.msn.com/top-stocks/post.aspx?_blg=42&post =fa0a9db0-f8cd-4ad8-a69d-932c47dbb7a0
197 “strong sell” rating
http://www.muddywatersresearch.com/research/edu/initiating-coverage-edu/
199 Chinese Academy of Social Sciences
http://www.theepochtimes.com/n2/china-news/china-sends-more-students-abroad-than-any-other-country-295022.html
204 110 countries
http://www.yum.com/company/
209 as the reason
http://www.yum.com/investors/news/ir_112912.asp
210 outbreak of a deadly disease
http://www.reuters.com/article/2013/04/24/us-china-farming-pigs-idUSBRE93N1C720130424
216 poultry supply
http://www.reuters.com/article/2013/01/07/us-yum-outlook-idUSBRE9060UX20130107
217 dozens had died
http://www.who.int/influenza/human_animal_interface/influenza_h7n9/WHO_H7N9_review_31May13.pdf
217 13 percent
http://investors.yum.com/phoenix.zhtml?c=117941&p=irol-newsArticle&ID=1809994&highlight=
218 British consumers
http://news.cntv.cn/2013/03/27/VIDE1364383682319950.shtml
218 of 1999
http://english.people.com.cn/english/200006/01/eng20000601_42067.html
CHAPTER 15
225 same number as America
http://www.economist.com/news/economic-and-financial-indicators/21581768-worlds-biggest-banks
226 at benefiting
Henry Sanderson and Michael Forsythe, China’s Superbank: Debt, Oil and Influence—How China Development Bank Is Rewriting the Rules of Finance (Singapore: Wiley/Bloomberg, 2013)
227 Japan at 60 percent
http://www.international-economy.com/TIE_W10_ChinaEngineGrowth.pdf
229 of employment
htt
p://finance.ifeng.com/news/special/zgfzlt_2012/20120317/5764772.shtml
231 200 percent of GDP
http://online.wsj.com/article/SB10001424127887324338604578325962705788582.html
231 gray market loans
http://www.reuters.com/article/2011/08/10/china-loans-idUSL3E7JA03T20110810
233 on the year
Fitch Ratings: Chinese Banks—Issuance of Wealth Management Products Heats Up as Year-End Approaches, December 5, 2012
234 Ponzi scheme
http://www.chinadaily.com.cn/opinion/2012-10/12/content_15812305.htm
242 their exams
http://www.theepochtimes.com/news/5-9-8/32106.html 00
243 five years before
http://www.nytimes.com/2012/02/05/education/international-students-pay-top-dollar-at-us-colleges.html?ref=global-home&_r=0
243 high school transcripts
http://www.nytimes.com/2012/02/05/education/international-students-pay-top-dollar-at-us-colleges.html?ref=global-home&_r=0
Acknowledgments
This book is truly a product of teamwork. I want to thank Ana Swanson and Hannah Lincoln, my “China hands,” for their tireless editing on the book. These two extraordinarily talented American women’s unique experiences, insights, and endless fascination with China were truly inspirational. Thanks to my agent, Esmond Harmsworth at Zachary Shuster Harmsworth Literary and Entertainment Agency, for his vision, dedication, and confidence in me. I also thank Tom Miller at McGraw-Hill for his skillful editing, crafting, and guidance. I also want to thank Samantha Marshall and Gwynn Guilford for their contributions to the book.
Index
Please note that index links point to page beginnings from the print edition. Locations are approximate in e-readers, and you may need to page down one or more times after clicking a link to get to the indexed material.
Ackman, Bill, 197
“Active Chip,” 99-101
Adolescence, 1, 35-52
business practices at mother’s factory, 42-43
death of “Little Uncle,” 43-45
education at SISU, 48-51
exposure to American popular culture, 35-37
father’s interest in American news and culture, 46-48
interest in financial markets, 45-46
living standard during, 46
reform movement, 37-39
Tiananmen Square demonstration, 39-41
ticket scalping, 41-42
TOEFL examination, 48-52
ADRs (see American Depository Receipts)
Alibaba, 97
Alpha, 3, 117-120, 233-234
American culture:
Chinese education about, 53-54
first exposure to, 35-37
sports in, 241-242
American Depository Receipts (ADRs), 174, 177, 194-195
American Superconductor Corporation (AMSC), 102-103
Andersen, Hans Christian, 28, 67
Andor Capital Management, 14
“Andrew” (husband), 89-92, 110-112, 142
Antidumping actions, 103
Apple, 206, 217-218, 252, 254
Art class, Middlebury College, 65-67
The Art of War (Sun Tzu), 87
Art Through the Ages (Helen Gardner), 65
Asset management, 70-72
Audrey (niece), 239, 248
Aurarian Capital Management, 3, 74-110
communication at, 74-75
education on short selling at, 80-83
effects of financial crisis on, 106-110
first interview at, 13-16
first trip to China as an investor for, 98-106
investigative research methods of, 74-80
investments in Chinese companies at, 94-98
research with “Andrew” for, 89-92
sacrifices for work at, 92-94
shorting of clean-tech stock at, 83-88
Avian flu, 217
Baidu, 96, 118-119, 176-181, 256
Bank of America, 225, 236
Banking industry:
American, 70
investing in Chinese, 222-225, 252-253
shadow banking in, 230-236
Battle Hymn of the Tiger Mother (Amy Chua), 241
Bear Stearns, 197
Behavior of students, 27-29, 54-55
Beijing, China, 221-222
Beijing Olympic Games (2008), 241
Beliefs, shared, 148-149
Benton, Dan, 14
Berkshire Hathaway, 126, 186
Best Buy, 89-92, 252
Block, Carson, 128, 165-166, 202, 204
Blockbuster Entertainment, 126
Boards of directors, independence of, 176
Bottom-up stock selection, 184
“Brian” (portfolio manager friend), 115-116, 129
Bubbles, market, 3-4, 107-108, 236
Buddhism, 134, 147
Buffett, Warren, 185-187
A Bull in China (Jim Rogers), 181-182
Bullet train crash, 152-153
Business practices, 43, 95
BYD, 186-187
Camelot Information Systems, 174
Capitalism, 62-63
Catching falling knives, 197
Caterpillar, 173-174
Catherine (SISU classmate), 52
CCTV (see China Central Television)
CFOs, IPO, 122
Channel checks, 89
Channel stuffing, 86-87, 129
Chanos, Jim, 236
Charles River, 197
Cheating, 28-29, 55-59, 242-243
Chengyang Wei, 234-235
Childhood, 1-2, 23-33
education during, 26-29
and effects of parenting, 7-8
father’s involvement in, 29-33
father’s parenting style, 9-11
home and neighborhood, 24-26
living standard during, 23-24
China Central Television (CCTV), 45, 177-180, 217-218
China Construction Bank, 235
“China Little Fertilizer” (“CLF”), 120-124, 164-165
fraud and, 164-170
global enthusiasm for, 3-5
instant alphas from, 117-120
Internet companies, 176-181
at IPO road show, 113-117
and multinational corporations, 170-176
and quality/quantity of economic growth, 163-164
Shanghai research trip on, 124-131
top-down approach for, 181-187
trading vs. investing mindset, 187-190
China Media Express, 167
China Youth Study, 242
China-based investments, 163-190
Chinese companies:
goals of, 105
investments in, 94-98
research on, 116
valuation of, 121-122, 186-190, 258
Chinese culture, 145-161
corner-cutting in, 152-153
corruption in, 154-160
crisis of confidence and, 160-161
and demand for luxury goods, 156-160
ethics in, 147-148
lack of faith in domestic products in, 149-152
religion and morality in, 145-147
shared beliefs and social trust in, 148-149
Chinese economy, 221-246
American economy vs., 5-6, 105
banking industry in, 222-225
domestic consumption and investment in, 227
and education system, 236-244
effects of financial crisis in, 109-110
future of, 245-246
and global economic recovery, 4
local government expenditures in, 225-226
nature of economic activity, 104-106
shadow banking in, 230-236
SOEs vs. SMEs in, 227-229
wealth management products in, 232-236
Chinese legal system, 44-45, 175
Chinese stock, 3-5
in banks, 235-236
investigative research on, 196-204
investment tips, 255-2
58
investors’ knowledge about, 118-120
at IPO road show, 113-117
retail, 123-124, 204
Chua, Amy, 241
Cinderella, teaching of, 238
Citic Trust Co, 235
Citigroup, 254
Citron, 167
Classroom environment, 27, 55
“CLF” (“China Little Fertilizer”), 120-124, 164-165
Clinton, Bill, 47
Cohen, Steve, 14
Collaboration, 241
Columbia Business School, 3, 72-74
Commercial banks, 222-223
Commodity companies, 101
Communist Party of China, 6, 23, 28, 41, 46, 129, 145
Communist Youth League’s Young Pioneers, 25
Compagnie Financière Richemont SA, 156, 158-159
Companies:
Chinese (see Chinese companies)
and good stocks vs. good companies, 82-83, 254-255
Competition, 101, 237, 242
Competitiveness, 52
Competitors, investigative research involving, 85
Consumer confidence crisis, 150, 160-161
Consumer products, research on, 252
Consumerism, 39, 133-136
Consumption, domestic, 227
Corner-cutting, 135-136, 152-153
Corporate governance, 172-176
Corruption, 154-160
Corruption rent, 227
Country Style Cooking, 208
“Covering a short,” 81
Creativity, 40, 41, 236, 239
Credit, 106, 108, 228, 229 (See also shadow banking)
Credit Suisse First Boston, 2-3, 69-70, 109
Ctrip.com International, 96, 184, 185
Cultural Revolution, 1, 17-21, 39, 60-61
Dacheng, 211
Danone, 210
Deloitte Touche Tohmatsu, 167
Demand for luxury goods, 156-160
Demand response companies, 84
Deng Xiaoping, 21, 23, 29, 37, 41, 98, 140, 145, 225
Deutsche Bank, 167
Diminishing marginal utility, 63
Dimon, Jamie, 176
Dishonesty, 242-244
Distributors, investigative research involving, 85-86
Dodd-Frank banking regulations, 109
Doing your homework, 6-7, 258-259
Domestic consumption, 227
Domestic products, lack of faith in, 149-152
Down to the Countryside Movement, 18, 19
Due diligence, 168-169
Earnings estimates, 255
Economic correction, 219-220