I think you guys are bored just reading information… and everyone has one’s own financial planning.

For me, I estimate how much cash I need, then use the rest for various kinds of investment. Bonds, Stocks and Options, ok, now I have got some cheap Yen (unfortunately) as well. Currency is a good tool as well, but as you cannot do hedging directly, but just put some money here and there… Therefore, I don’t have much interest to follow.

After much talking with Ken, I would like to do a case study with you, quite a simple one to start with: 3M

3M has announced their Quarterly result on Tue. ‘Disappointing’ was the headline in the next day. However, is that anything wrong? You can read the below, I have been following 3M for about 1.5 years (yes, I am crazy as I like to read what some companies do, even some very unrelated). The main business for them is selling film for LCD TV, cannot believe it?! However, because of the housing data and the LCD price war and sluggish sales, the result was bad. According to these 2 aspects, the worse for LCD should have passed because of the upgrade PC for new OS and upgrade TV for Blue-Ray/HD. Also, there are more and more LCD display devices, seems the top would be in this year. Tracking sales of LCD would give you some ideas of how well will 3M be. About housing data, there are lots of factors, but I guess the main one would be interest rate. US econ indeed not as great as everyone suggested, and seems instead of increasing interest rate further, what will happen is going to lower the interest rate.

3M is pretty stably floating above $70, as I said I don’t want to be uncle 6, I don’t predict about price, and I think it is interesting to follow news then give your own prediction on eventually how one company is doing. If you think it is good, as you know the tools already, you can buy stock, or buy call option, and if you think it is not good, you can buy put option! (of course you can sell call option as well la, on your own risk)

Similar to some chemical companies, if Bush really places his man to Iraq, the consequences would be high oil price and so would good revenue to those providing war materials to the government.

Eric

http://finance.yahoo.com/q?s=MMM

3M (NYSE: MMM) is the blue chip to own in 2007. It offers thousands of products that touch your life in myriad ways -- many of which you probably don't even realize. The company's culture of scientific innovation provides a formidable competitive advantage, and innovation is accelerating. With strong leadership, copious free cash, dividends, and share repurchases, 3M quite simply delivers value to shareholders.

Leveraging the innovation engine
3M's moat is its famed culture of innovation. The company derives all of its products from 40 "technology platforms," singularly or in combination. Adhesives make up just one of those platforms. At one end of the adhesives spectrum sits the ubiquitous Post-it Note. At the opposite end are structural adhesives, with strength sufficient to replace welded joints in aircraft. The goal is to develop products to make life more efficient for 3M customers. In doing so, 3M embeds itself in its customers' operations, which leads to better results for 3M itself.

All 3M employees are trained in the ways of "Six Sigma," a quality-assurance system focused on process improvement and variation reduction. (Another successful implementer, General Electric (NYSE: GE), estimated that benefits from its own use of Six Sigma reached $10 billion during its first five years.) But 3M doesn't just rely on high-concept management systems -- it's also big on kindergarten concepts such as sharing and cooperation! Knowledge and technology are shared internally, rather than hoarded by individual departments or operations. Realizing that all brilliant minds who could harness 3M's technology platforms likely don't all work for 3M, the company maintains a technology-transfer program to helps inventors find and license technologies to solve their research-and-development challenges.

Financial growth
3M employs six competitive platforms for future growth:

1.      Continuously seek to lower costs.

2.      Do things better than the competition through innovation and technology.

3.      Constantly improve the distribution system -- hey, it worked for Wal-Mart (NYSE: WMT)!

4.      Maintain a customer focus.

5.      Strengthen brands.

6.      Develop its people. (All are trained on Six Sigma.)

Growth has gone international, with 61% of sales from outside the United States. Management is aiming to push that number to 70% by 2011. That's a good thing, since it spreads business risk across multiple countries and economies.

3M's platforms have spurred financial improvements, too. In 2001, sales of $10 billion -- 62% of the total -- were for products earning margins above the corporate average. By 2005, this number had grown to $15 billion, representing 70% of total sales. A continued transition into higher-margin products falls to the bottom line of free cash flow generation.

Let's create value
Compare my calculations for 3M's weighted average cost of capital (WACC), encompassing both debt and equity financing, with the returns that it earns by investing this capital, otherwise known as return on invested capital (ROIC). True economic value is created when there is a positive spread between ROIC and WACC.

Value isn't frittered away in the corporate suite. 3M returns it to shareholders through steady dividend increases and share repurchases, as well as by reinvesting in the business for future growth.

After the stock hit a high of $88 earlier this year, disappointing second-quarter results cratered it to $67. Investors got overly pessimistic about a slowdown in sales of brightness-enhancement films for high-end televisions, a flagship product. 3M management opportunistically repurchased 17.9 million shares at an average price of $71. Management knew the business wasn't broken and took full advantage of depressive Mr. Market's gift.