Monday, 22 August 2011

Let's talk about Prada


prada's share price / ph: yahoo.com

prada's (1913.hk) shares closed at HK$35.95 today, the lowest point ever since they began their listing on the hong kong stock exchange back in june. the asian markets closed lower today as there were uncertainties about the european and american economies, uncertainties if we are entering a recession or not. macro economics aside, the wider situation beyond their control, i feel it is a good time now to invest in prada. the general consensus during prada's ipo (initial public offering) back in june, was that they were overpriced, and the stock would be more appealing if it was 10-15% down. today's close marked a 9% decrease from their listed price, and so i put money where my mouth is and invested a small amount.

there are wider economic factors beyond companies' control, it will affect these companies but it is situations like these that separate the wheat from the chaff. prada is very focused on china right now. a big push for their ipo was to pay off the huge debts weighing on them, as well as to help fund expansion in asia. this economic crisis is mainly driven by pessimism around excessive government borrowings (mainly in the US, italy, spain, greece etc) in the western economies, the east or china in particular, being relatively unscathed, is still poised to be the biggest consumer of luxury goods by 2015.

although behavioural patterns shift, what we learnt from the previous crisis was that consumers do not stop spending in times of recession. we (since i am a consumer too) cut back, and buy less but better. and it is with this thought, that i feel retailers who will be big in china, and retailers that are top tier enough to still command consumers' dollars in this climate, that i make my selections. i picked a few retail shares during last week's stock markets bloodbath. i adhere to the principle of "buy low sell high". it's about picking those with potential and management capabilities to steer their ships out of this storm. i hope in a few months time i can say with hindsight i am right. so it's hopefully a temporary goodbye to my leica m9 + winter wardrobe investment + holidays fund. and hopefully i'll see returns by spring. hope springs eternal right?


miu miu shoes / ph: miu miu

and any company who can produce bling bling shoes like these which appeal to both sexes is a winner in my book.







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6 comments:

  1. ...How about EPS / Debt / dividend?

    ReplyDelete
  2. ratios use historical data and analyse past performances. i'm interested in the future and potential of the company, by examining their strategies and looking at their product mix and offerings. and because i am not a big time investor, sometimes i go with my heart rather than what's rational.

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  3. funny, i hit the comment buttom to say that it seems more like a decision made from the heart than an educated punt that the share price would bounce back up with vengeance anytime soon. I bought prada stock last week but only because I feel something extraordinary SHOULD happen to the company in the future.

    ReplyDelete
  4. kowang: it's a mixture of a little educated punt, a little heart, a little glitter and all that jazz.

    ReplyDelete
  5. Those shoes are so amazing!

    xoxo,

    colormenana.blogspot.com

    ReplyDelete
  6. Quiero unos Miu Miu de esos con Brilli Brilli pero YA!!

    ReplyDelete

what's he wearing?