Baidu : A Lesson

In our Aug 8th posting "Another Craze: Baidu", we cautioned our readers
not to jump into that stock and invite anxiety to your home, unless you
had lot of money.

Baidu went public on Aug. 7. On that day, shares of this Chinese Web
search-engine operator vaulted 354% in the IPO market's biggest splash
in at least 5 years. Baidu.com (BIDU) opened at $66, more than double its
$27 price, climbed, stabilized and then rallied anew before plateauing a
second time and ending its historic opening day at $122.54. It traded as
high as $153.98 on its 2nd day on the market. But that's it -- after that it
was up and down all the way for finding new lower peaks.

In its first earnings report since going public in August, yesterday the
company listed third-quarter profits and income that nearly tripled from
the previous year. Baidu reported a profit of $1.1 million or 3 cents a
share, up 189.3% from the period the year before, but down 29.4% from
the 2nd quarter. The sequential decline in profit was in part due to higher
expenses, including a 66.0% increase in bandwidth expansion costs from
the previous quarter. Revenue came in at $11 million, up from $3.9 million
-- some 28% from the prior quarter.

Future? Baidu expects revenue for the fourth quarter to come in at $12.6
million to $13.1 million. The average of three institutional analysts
covering Baidu had expected fourth quarter revenue of $10.8 million.

Investors did not take kindly to the results, selling Baidu shares down as
much as 15% to $68.40 in after hours trade yesterday. Before the market
close, Baidu.com shares closed up 1.6% to $81.05.

As we reminded our readers many times -- you invest to become a
happier personn with a happy family and to sleep well at night. Do not
ever get into any craze. Be disciplined, stick to fundamentals and invest
regularly for a long time horizon. You'll surely be rewarded -- a good sleep
every night is a reward indeed!