Buffett Expects `Large Investment Opportunities' in China

By Bloomberg News - Sep 30, 2010 1:23 PM GMT+0200 Thu Sep 30 11:23:56 GMT 2010

Sept. 30 (Bloomberg) -- Bloomberg's Stephen Engle reports on a visit by Berkshire Hathaway Inc. Chairman Warren Buffett and Microsoft Corp. Chairman Bill Gates to China. Buffett said the meeting he and Gates had in Beijing with 50 Chinese leaders in business and philanthropy “was a complete success,” according to a release from the Bill & Melinda Gates Foundation. (Source: Bloomberg)

Billionaire Warren Buffett said he expects “large” opportunities in China, making the world’s fastest growing major economy a “logical” place to invest.

“Almost anyone, a third-grade child from America, can see that this economy is booming,” Buffett said at a briefing today in the southern Chinese city of Changsha. China’s transformation is “unlike anything that’s ever taken place in history.”

Buffett, 80, is turning his attention outside the U.S. after his Berkshire Hathaway Inc. bought Fort Worth, Texas-based railroad Burlington Northern Santa Fe Corp. this year for $27 billion in his largest deal. In China this week, he and Berkshire Vice Chairman Charles Munger visited the facilities of automaker BYD Co., part owned by Berkshire, and with Bill Gates met with local business leaders to promote philanthropy.

“China’s a very big economy and it’s going to get a lot bigger,” Buffett said. “That means it has large investment opportunities and that’s what Berkshire Hathaway is looking for. We need to put large sums to work, so China is a logical place.”

Berkshire’s largest acquisition of a non-U.S. firm was Iscar Metalworking Cos., an Israeli company with operations in China and Japan. Buffett paid $4 billion for 80 percent of Iscar in 2006. Berkshire agreed to buy a 9.9 percent stake in BYD in 2008, and last year he injected $2.6 billion into Swiss Reinsurance Co., the second-biggest seller of backstop coverage for insurers.

Economic Growth

China’s gross-domestic product surpassed Japan’s in the second quarter, expanding 10.3 percent from a year earlier, and was second only to the United States. China will overtake the U.S., where annual GDP is about $14 trillion, as the largest economy by 2027, according to Goldman Sachs Group Inc. chief economist Jim O’Neill.

The value of China’s currency, the yuan, wasn’t a consideration when Berkshire decided to invest in BYD, Buffett said today. “The subject of currency never came up and that would continue to be the case today,” he said.

The U.S. House of Representatives voted yesterday for a measure that would let American companies petition for duties on imports from China to compensate for the effect of a weak yuan. The Senate won’t take up its version until after the November election, said Senator Charles Schumer, a New York Democrat.

Munger today declined to comment on the bill, saying “We don’t think that Berkshire Hathaway should be telling the government of China or the government of the United State how to resolve their currency negotiations.” Buffett didn’t address the issue.

Overseas Deals

Li Lu, the hedge fund manager who helped arrange Berkshire’s BYD investment, may push Buffett’s company to make more deals outside the U.S., according to Michael Yoshikami, who oversees about $1 billion, including Berkshire shares, at YCMNet Advisors in Walnut Creek, California. Berkshire’s Munger expects Li, former president of the Student Congress on Tiananmen Square, to become a top investment official at Berkshire, the Wall Street Journal reported in July.

The money manager met Munger after college and the two exchanged thoughts on investing, according to an essay Li wrote for the China Entrepreneur Magazine in May and posted on the website of his hedge fund, Himalaya Capital.

Buffett previously traveled to China in 2007 and told investors then to be “cautious” of China’s stocks after they had doubled in the first 10 months of the year. Berkshire posted record earnings in 2007 as Buffett booked a $3.5 billion profit selling a stake in PetroChina Co. that he acquired for about $500 million.

This story can be a major catalysator for U.S.-listed Chinese stocks!!!!

Artificial Life (ALIF) article in Sunday Morning Post (China)

Augmented reality: soon it will be around us

Understanding SAIC and SEC filing discrepancies for U.S. listed Chinese stocks

A China Expert's Views on Understanding SAIC and SEC Filing Discrepancies for U.S. Listed China Based Companies

NEW YORK, Sept 27, 2010 /PRNewswire via COMTEX/ --
The following is an article authored by Mr. Benjamin Wey, President of New York Global Group, Visiting Professor of Finance: NYGG Website: http://www.nyggroup.com/

Recently, some investors interested in investing in U.S. listed China based companies have expressed concerns over discrepancies found sometimes in the financial statements between certain Chinese companies' State Administration for Industry and Commerce (SAIC) filings in China and their U.S. SEC filings.

Investors often quickly conclude that the underlying China operating entities must be fraudulent in inflating sales and earnings figures, and that their public SEC filings in the U.S. may not be relied upon for accuracy.

On the contrary, it is highly unusual and it should cause real concerns to investors if SAIC filings DO match a public company's SEC filings. Based on New York Global Group's 12 year office presence in China as well as our deep understanding of the Chinese business practices, culture, and language, the concerns over SAIC and SEC filing mismatches are overblown and unnecessary. The reason is simple: investors lack basic understanding of China's corporate registration processes and are comparing very different items. It is important to understand what these documents are, what they are not, and why it would be incorrect and ignorant to allege companies as frauds based on SAIC documents. This article intends to alleviate these concerns based on facts and our extensive knowledge of China.

There are over 50 million registered businesses in China. China's State Administration for Industry and Commerce ("SAIC") has no authority in overseeing the financials of a business in China.

It is incorrect to refer to SAIC filings as a Chinese company's "tax authority" and make accompanying accusations regarding tax evasion or derive judgment on a company's financial status. The SAIC's function is like the "Office of the Secretary of State" at the state levels in the U.S., whose primary responsibilities include business registration, issuing permits, and maintaining corporate status of a business. Here is how it works: Chinese companies are required to file annual tax returns with local tax bureaus. The same filing document is copied to the local SAIC branch office within the jurisdiction where a business is physically located. What does the SAIC office do with the documentation? It gets filed away and there is nothing more beyond that. The process is a simple formality to show that a registered business has filed its annual tax returns, which is a requirement for a business to maintain good corporate standing. In addition, SAIC has tens of thousands of branch offices across China that each provides varying lengths of information solely related to a business's registration status. There are more than 50 million registered businesses in China and all of them must register with their SAIC local branch offices before they can start doing business.

For a Chinese company, a "Certificate of Tax Completion" is all that is needed to satisfy a company's tax and annual financial filing requirements State Administration of Taxation ("SAT") is the only Chinese government
agency that has the legal authority to collect corporate taxes and receives annual financial reports of a business. SAT has tens of thousands of local branch offices across China. Corporate tax reporting in China is a local event, filed by a business within the jurisdiction of an SAT office where the business is physically located. Once a business makes its tax filings, the local SAT office issues a "Certificate of Tax Completion" to the business which provides evidence that its tax filings are complete and accepted, and that the business has satisfied all of its tax and financial reporting obligations. Then a copy of such filings is provided to the SAIC office which can certify that the business is in good corporate standing. That is the very extent of the SAIC's involvement in Chinese tax filings.

All of the U.S. listed China based companies are under holding company structures which own multiple subsidiaries in China. Unlike the SEC, the SAT or SAIC does not require a holding company to file consolidated financial statements.

If a company is a holding company that owns multiple subsidiaries or factories that are not all located in the same physical location, then each subsidiary has to file its own tax returns separately with a local tax bureau where the subsidiary is located. Each subsidiary makes its own tax filings independently from other sister businesses as well. There is no such a thing as a consolidated tax return filed with either the SAT or SAIC at the holding company level. Therefore, for a holding company that owns multiple subsidiaries, pulling a tax return on one subsidiary certainly does not represent the holding company's financials. In the case of U.S. listed China based companies; all of them have multiple subsidiaries located in China.

Until all of a holding company's subsidiaries are consolidated into one financial statement, simply adding up the financials of each subsidiary does not equate to the financials filed by the holding company, represented as an entire organization through its SEC filings.

On the other hand, a holding company's auditor reconciles tax filings, sales receipts, and other public and nonpublic financial evidence to produce SEC and U.S. GAAP required financial statements. Experienced auditors in China are well aware of this issue. Further, adjustments are made for differences between U.S. and Chinese GAAP. Thus, SEC filings are indeed the most reliable proxy for a U.S. listed company's financial performance.

A company's tax filings with a local tax authority cannot be obtained by non-related third parties through legal means. By law, business tax filings are not publicly accessible.

It would be impossible for anyone outside a business itself to have legal access to its SAT tax filings since the data is not publicly available and confidentiality is strictly preserved by the Chinese government agency. It is certainly illegal and a criminal act to trade or disperse rumors based on such nonpublic information. Many so-called China "sources", often backed by stock short sellers, tout their abilities to get purported financial reports filed with the SAT on any U.S. listed China based company. These are illegal claims. Also as discussed earlier, no consolidated financial statements exist for a holding company in China. Even if an SAIC filing is illegally obtained on a subsidiary, it does not reflect the U.S. listed holding company's consolidated financials.

SAIC filings are not consolidated financial statements and each subsidiary often includes inter-company transactions. As an example, for a vertically integrated manufacturing business, it is common for subsidiaries to transfer revenues and expenses within the same organization for allocating profits to entities that are legally subject to lower tax rates or for the purpose of simply following a manufacturing production process. To avoid double counting, professional auditors consolidate all of a holding company's subsidiary financials after inter-company transactions are eliminated. A holding company's financials are filed with the SEC only after such inter-company related transactions are eliminated. Therefore, financial reports obtained from SAIC or SAT are absolutely not correct reflection of a publicly traded holding company's financial statements.

SAIC filings have no relevance to the credibility of a company's public filings filed with the SEC As long as a holding company structure is involved, the SAIC and SEC numbers cannot possibly match except under an extreme circumstance in which a public company has only one wholly owned operating subsidiary and there are no inter-company transactions of any sort, including expenses, different revenue recognitions under Chinese and U.S. GAAP accounting etc. at the parent company level. Presently, no such China based company exists on any U.S. stock exchange.

Any concern over SAIC filings is just one example of the many areas that investors are just beginning to learn about Chinese business practices. Be wary of less professional advice from amateur or anonymous sources that often have untold self-interest behind some seemingly legitimate arguments. There are often stock short sellers behind many "sudden discoveries of fraud" at a legitimate publicly traded China based company. Avoiding fraud involves much more than comparing apples to oranges. Understanding China, learning to speak the Chinese language, gaining better understanding of China's complex cultural and business aspects are among the right steps one should take.

China Investor King's market view

China Investor King's approach is to invest in small- and microcap companies that are in the early stage of getting attention. The last months the China space is over flooded with negative reports from short sellers and other entities. Because markets have a tendency to be irrational, extreme investor behavior has created conditions where a stock's price is most likely to be significantly different than its fair value.

This will not last forever. By patiently accumulating undervalued companies with a view to long-term ownership when their valuations are depressed because of investor's inability to look beyond near-term, China Investor King believes you can produce above-average returns over time.

Stocks like Renhuang Pharmaceuticals (CBP), Lotus Pharmaceuticals (LTUS), Weikang Bio-Tech (WKBT), China Agriculture Business (CHBU) and a lot more of US-listed China stocks will reach realistic valuations in the future.

Do your Due Diligence when you invest and look for businesses that have proven and consistent operating histories.

Renhuang Pharmaceuticals (CBP) Q3 results

Renhuang Pharmaceuticals (CBP), a developer, manufacturer and distributor of botanical products, bio-pharmaceuticals and traditional Chinese medicines ("TCM"), today announced its financial results for the third quarter ended July 31, 2010 and affirmed financial guidance for fiscal year 2010.

Third Quarter Fiscal 2010 Highlights and Recent Events
Net sales grew 43.8% year-over-year to $9.3 million.
Gross profit increased 32.7% to $4.6 million from $3.5 million in 2009
Gross margin was 50.1% -- Net income rose 115.8% to $1.5 million or $0.04 per diluted share, as      compared to $0.7 million or $0.02 per diluted share in 2009
New products, Banlangen Granules and Compound Honeysuckle Granules, accounted for 26.2% of gross sales in the quarter

"Our third quarter sales and net income are historically modestly lower as compared to those in the first two quarters due to seasonality of our product portfolio," said Mr. Shaoming Li, the Chairman and CEO of Renhuang. "Demand for our products often peaks in the fourth quarter, which represents the start of the flu season. Despite the third quarter being a historically slow quarter, we are pleased with the year-over-year growth in net sales and net income. It is also pleasing to report that our recently introduced products, Banlangen Granules and Compound Honeysuckle Granules, have been key drivers supporting our sales growth and strong margins."

Third Quarter Fiscal 2010 Results
For the third quarter ended July 31, 2010, net sales were $9.3 million, up 43.8% from $6.4 million in the same quarter last year. The sales increase was largely attributable to strong growth in sales of the Company's recently introduced products, Banlangen Granules and Compound Honeysuckle Granules, and an increase in the average selling prices (ASP) of certain of the Company's products. Banlangen Granules and Compound Honeysuckle Granules accounted for 26.2% of gross sales in the quarter. ASP rose 5.1% year-over-year in the third quarter of fiscal 2010, which included lower average sales rebates. Except for Shark Vital Capsules, ASP's across all product categories rose on a year-over-year basis.

Gross profit in the quarter increased 32.7% to $4.6 million, as compared to $3.5 million for the same period of 2009. Gross margin for the quarter ended July 31, 2010 decreased to 50.1% from 54.3% in the comparable fiscal 2009 quarter. The year-over-year decline in margin was mainly due to lower sales of the Company's higher-margin product, Shark Vital Capsules during the third fiscal quarter.

Operating expenses for the third quarter of fiscal 2010 were $3.2 million, as compared to $2.8 million in the same period last year. Sales and marketing expenses rose to $1.3 million from $1.1 million. The spending increase reflected continued investment in the Company's distribution network and TV advertising in order to increase product market share and create greater consumer awareness of the Company's premium quality products. General and administrative expenses declined 21.0% to $0.4 million, primarily as a result of the Company's strategic decision to purchase office space in the second fiscal quarter, which resulted in savings on rental expenses for its factory and administrative office. Research and development expenses increased 24.6% to $1.5 million as the Company's pipeline of projects continues to advance and grow.

Operating income in the fiscal 2010 quarter was $1.4 million, up 116.4% from $0.7 million in the 2009 quarter. Operating margin increased significantly year-over-year to 15.5% from 10.3%. The Company did not incur income tax expenses as its subsidiary registered in the PRC has been granted a tax holiday for fiscal 2010. For the third quarter ended July 31, 2010, net income grew 115.8% to $1.5 million, or $0.04 per diluted share, from $0.7 million, or $0.02 per diluted share in the prior year period.

Nine Months Fiscal 2010 Results
Total revenue for the nine-month period ended July 31, 2010 was $38.5 million, an increase of 33.1% from $28.9 million for the first nine months in fiscal 2009. The strong growth in year-over-year sales was mainly due to the introduction of Banlangen Granules and Compound Honeysuckle Granules in the last quarter of 2009, and an increase in average selling prices for certain other products.

Gross profit in the first nine months of fiscal 2010 rose 34.8% to $20.3 million, representing a gross margin of 52.8% as compared to 52.2% in the first nine months of fiscal 2009. Operating income grew 35.3% year-over-year to $12.2 million. In the first nine months of fiscal 2010, net income was $12.2 million or $0.32 per diluted share, up from $9.0 million or $0.26 per diluted share in the first nine months of fiscal 2009.

Financial Condition
As of July 31, 2010, Renhuang had $28.7 million in cash and cash equivalents. Working capital was $42.3 million with a current ratio of 18.0x, as compared to $8.1 million and 12.9x as of October 31, 2009. The Company had no debt on its balance sheet. At the end of the third quarter of 2010, shareholders' equity was $63.1 million, as compared to $50.5 million at the end of fiscal 2009.

Cash flow from operating activities was $22.9 million for the nine months ended July 31, 2010, as compared to $3.1 million during the same period in the prior year. The cash flow increase was primarily attributable to an increase in net income and a decrease in trade receivables that reflected a change in credit terms and more aggressive receivable collection efforts year-over-year. Average days sales outstanding fell to 76 days in first nine months of fiscal 2010 from 249 in the first nine months of fiscal 2009.

Outlook - Affirming Fiscal 2010 Guidance
Renhuang is affirming its fiscal 2010 guidance for net sales in the range of $54.7-$55.6 million, which represents a 26% to 28% increase over reported revenues of $43.4 million in fiscal year 2009. The Company continues to expect fiscal 2010 net income, excluding any non-cash, non-operating gains and expenses (such as the change in fair market value of warrant liability), to be in the range of $18.6-$18.9 million, up 26% to 28% from net income of $14.8 million in fiscal year 2009.

Fourth quarter sales and net income are expected to exhibit strong growth, as it is historically our outstanding quarter with peak sales primarily driven by the beginning of the flu season.

Renhuang expects sales of its leading Siberian Ginseng products to expand as it benefits from further market penetration and the Company's rapidly growing new products to continue their growth momentum driving future revenue and net income growth. Renhuang plans to terminate sales of Shark Vital Capsules by the end of the fourth quarter of 2010 and launch its new product, Badger Oil -- a natural medicine for the treatment of burns with no known toxic side effects or allergic reactions -- in the same period. The Company also launched Qing Re Jie Du Oral Liquid, a TCM for the treatment of influenza and upper respiratory infections in June 2010 and Compound Schisandra Tables in July 2010, a new all-natural anti-depressant and nerve regulation product.

"During the current Spring and Autumn season, China battles with influenza (or common flu), which drives up the sales of our Banlangen Granules and Compound Honeysuckle Granules. These products have established a strong market reputation due to their high-quality and performance," added Mr. Li. "We will continue to maintain our focus on botanical anti depression and nerve regulation products, and invest in research and development of these products. Our target is to become the leading pharmaceutical company in botanical anti depression and nerve regulation medicine in China. In addition to focusing on organic growth, Renhuang continues to actively evaluate external growth opportunities through strategic acquisitions."

We knew that Q3 is their worst quarter. They reaffirmed their guidance for 2010. So EPS should be around $0.50 for 2010. The stock is trading under book value of $1.68 and has a P/E below 4.

POSITION: LONG

Tell the truth, the whole truth, and nothing but the truth

The last months short seller's and other so called bashers battled the China Smallcap and Midcap Arena.

Two weeks ago, Barron's magazine printed a feature article titled "Beware This Chinese Export", written by Bill Alpert and Leslie P. Norton. It was labeled as a "study" and subtitled "Chinese Reverse-Merger Stocks Lag Key Indexes." The tone of the article was very negative about anything related to U.S.-listed Chinese stocks that went public via reverse mergers. It basically warned investors not to touch any of those when the article closed with this caveat: "the reverse-merger industry gathers in Hawaii this week at a Roth conference—a venue equally favored by China stock touts and by the sector's short sellers. The rest of us should probably stay home."

The whole article was fish feed for short sellers and had strong biases built in, read article:

http://chinainvestorking.blogspot.com/2010/08/article-barrons830-beware-this-chinese.html

Today a great article was published by Rames-el-desouki, founder from Trading China, on SeekingAlpha. The article shines a thrutful light on the Barron's article. Read it and follow this guy. The truth has to come out for God's sake.

http://seekingalpha.com/article/224913-the-myth-of-underperforming-chinese-reverse-mergers

Lotus Pharmaceuticals (LTUS) takes action to get more attention

Yesterday Lotus Pharmaceuticals (LTUS), a growing developer, manufacturer and seller of medicine and drugs in the People's Republic of China ("PRC"), announced that it has engaged RedChip Companies, Inc., to lead its public and investor relations efforts.

"RedChip's integrity, professionalism, and established reputation for improving investor visibility in the small-cap space prompted us to choose them to lead our ongoing investor relations efforts," stated Dr. Zhongyi Liu, Chairman and CEO of the Company. "Their platform of media and investor relations services is the most comprehensive in the business. We look forward to working with them, and we are confident that RedChip's programs will enable us to build strong, long-term relationships with investors."

"We are pleased to have the opportunity to represent Lotus," said Dave Gentry, President and CEO of RedChip Companies, Inc. "China is one of the world's largest and fastest-growing pharmaceutical markets, with annual sales expected to reach $24 billion in 2010. Continued economic development within China, as well as Chinese government policies aimed at expanding citizens' access to healthcare, is anticipated to drive future growth in this sector. With its strong R&D capabilities, innovative product development pipeline and well-established national distribution network, Lotus is poised to become a market leader. We look forward to introducing them to our investor network as we implement a comprehensive investor relations program that includes research, radio programming, road shows and investor conferences."

Today the Company has appointed Jeff Hon as its new Chief Financial Officer.

"We are excited to welcome Mr. Hon to our executive team," said the Company's Chairman and Chief Executive Officer, Dr. Zhongyi Liu. "Lotus is experiencing strong sales growth and tremendous positive momentum, and we are on track to become a leading player in China's pharmaceutical market. Mr. Hon has successfully guided the expansion efforts of numerous growing companies, and his vast financial and business development expertise will be of great value as we execute our strategic growth plan."

Mr. Hon, who will oversee Lotus's finance, investments and internal investor relations, will report directly to Dr. Liu. Prior to joining Lotus, Mr. Hon was the manager of the IPO/M&A department in the Hong Kong office of Westcomb Financial Group Ltd., an investment banking firm based in Singapore. Previously, he was the senior consultant at Sunbelt Business Advisors, a U.S. M&A consulting firm based in Hong Kong. Prior to that, he served as corporate development manager of Shanghai Technology Company Ltd., a wholly-owned subsidiary of Shanghai Broadband Technology Company Ltd., a Chinese company listed on the Shanghai Stock Exchange. Mr. Hon received his Bachelor of Electronic Engineering (Honors) degree from the City University of Hong Kong, a Master's degree in Corporate Finance from the Polytechnic University of Hong Kong, and a Master's degree in Professional Accounting from Southern Cross University of Australia.

Some details of the RedChip contract
Lotus Pharmaceuticals (LTUS) is a client of RedChip Companies, Inc. and of RedChip Visibility, a division of RedChip Companies. LTUS paid RedChip Visibility, a division of RedChip Companies, Inc., $30,000 for RedChip Visibility Program services, which included the preparation of the equity research report(s). The equity research report(s) were prepared for informational purposes only and were paid for by the company portrayed in the report. Information contained in the equity research report(s) is obtained from sources believed to be reliable, but its accuracy and completeness are not guaranteed. The equity research report(s) are not a recommendation of a solicitation to purchase or sell any security, nor do they constitute investment advice. RedChip Companies, Inc., is currently engaged by this company to provide investor awareness services. Investor awareness services and programs are designed to help small-cap companies communicate their investment characteristics. LTUS agreed to pay RedChip Companies, Inc., a fee of $8,000 in cash per month for 12 months of these investor relations services. Additionally, LTUS agreed to pay RedChip Companies, Inc., 50,000 shares of common stock under Rule 144 for 12 months of Visibility Program and investor awareness services. RedChip Companies, Inc., employees and affiliates may have positions and affect transactions in the securities or options of the issuers mentioned herein.

To get investor's visibility and the company under the radar cost money. Dilution is going to be just a fraction of their outstanding shares. Less than 1%, the one-time fee and the $96.000 year-long fees ($8k x 12 months) total just $126.000, a fraction of their quarter net income. With increasing sales and income these professional costs are not going to be a problem!

POSITION: LONG

Artificial Life (ALIF) good news this week.

Yesterday Artificial Life (ALIF) (http://www.artificial-life.com/) announced the "Be A Gladiator" contest for the official "Spartacus: Blood and Sand" iPhone game to celebrate its success on Apple's App Store. The winner of the contest will be able to have his or her face represented as one of the Gladiators in the game!

The "Be A Gladiator" contest is open worldwide from September 7, 2010 (Tuesday) to October 7, 2010 (Thursday). Players can enter the contest by publishing their results in the game's Story Mode onto Facebook. Contestants will be ranked on the contest leaderboard by their submitted scores--the higher the submitted score, the higher the contestant is ranked. Further details and an alternative entry method can be found on www.spartacuscontest.com. A video demonstration on "How to Be a Gladiator" is available at www.spartacuscontest.com.

The grand-prize winner's face and features will be rendered into a brand new actual fighting Gladiator in the "Spartacus: Blood and Sand" iPhone game*. Additional "Spartacus: Blood and Sand" souvenirs will be awarded to the second, third, and fourth place winners of the contest.

To enhance the players' gaming experience, Artificial Life has published an exclusive tutorial video that demonstrates the essential combos and tactics to complete the Story Mode of the game. These combat tips are available at www.spartacuscontest.com.

The Starz original series, "Spartacus: Blood and Sand," was a breakout success for Starz Entertainment earlier this year. The "Spartacus: Blood and Sand" mobile game is published by Starz Digital Media in association with Artificial Life.

Today the company appointed Gaming Veteran Kazutoshi Miyake as New Board Member

Mr. Miyake is a well known and very experienced games industry veteran. He has worked for over 30 years in various international business development and senior management positions.

From 1972 to 1993, Mr. Miyake was Manager of Nissho Iwai Corp, Japan's leading trading house. From 1993 to 1994, he was General Manager of Sega Enterprises Japan, responsible for Europe, Middle East and Asia Pacific, and then from 1994 to 2001, he was CEO of Sega Europe. From 2001 to 2003, he held several board positions with companies including Andromeda, Akaei and Infogrames. Since 2003, he has been CEO of Stride Asia, CEO of Atari Japan and Chairman of Telcogames.

Mr. Miyake replaces Claudia Alsdorf, who resigned as a member of the Board and the Audit Committee effective September 1, 2010 following her acceptance of a new position as CEO of a start-up mobile company.

"We are excited to have such an experienced manager and gaming expert on our board now. Kazu-san has an impressive CV and will certainly be a major contributor to our future Japan and Asian activities in general. I also want to take this opportunity to thank Claudia for her great support over the last years and wish her all the best luck with her new job and responsibilities," said Eberhard Schoneburg, CEO, Artificial Life, Inc.

Positive news on both fronts, which could lead to renewed interest in the stock.

POSITION: LONG

The Great Deleveraging: Economic Growth and Investing Strategies for the Future

This book addresses why the United States took on so much debt and, eventually, how the debt will be reduced—delevered—and the costs of that deleveraging. In between, it differentiates sources of real economic and financial market growth from those that hinder and undermine them. It also provides some perspective on asset class returns over the last nine decades and some insight into the foundation of past secular bear and bull markets. That perspective is meant to better frame some basic rules of the investment road and hopefully make for more effective future navigation in an increasingly shifting global economy and more diverse market environment.

For all your economic or investment books look at Investment Books Blog Shop at this blog or visit the website: http://thebestinvestmentbooks.blogspot.com/

Artificial Life (ALIF) mobile content provider with vision

The smartphone market is growing at an annual clip of 50%, according to IDC, and is expected to continue robust growth for many years to come. A whopping 118.3 million smartphones shipped in the first six months of 2010, reflecting a 54% increase from the 76.8 million units that were sold in the first half of last year. Analysts at ABI Research project smartphone sales to double from about 200 million units this year to more than 400 million units in 2014, which indicates forecasted compound annual growth of 20% for the next four years.

ABI’s forecast of growth in the smartphone market is probably on the low side. Consider that industry specialists at Frost & Sullivan expect that close to 500 million smartphones will be sold in Asia-Pacific alone in the year 2015. That would easily put worldwide annual sales in the ballpark of 700 – 800 million.

The point is that as smartphones get smarter and more affordable, and 4G service expands, we expect to see smartphones taking the place of PCs for a growing number of consumers. And this trend may already be emerging (especially in emerging markets) as evidenced by the relative expected growth rates in the years ahead and by deals like the Intel/Infineon one cited above.

So it’s possible that a few years down the road, many consumers will forgo even owning a PC and will rely on a smartphone as their primary computer instead.

With all this talk of smartphone growth, I figure we should continue a bit with this (for once) positive tone and talk briefly about healthcare in the smartphone market.

Healthcare is a niche market with growth potential for Smartphones, according to healthcare market research publisher Kalorama Information. The firm cites high rates of physician use of Smartphones and PDAs and available applications among many factors making healthcare ideal for Smartphone sales. In 2009, PDAs and Smartphones for healthcare applications were worth about $2.6 billion combined—according to Kalorama’s recently released report, “Handhelds in Healthcare: The World Market for PDAs, Tablet PCs, Handheld Monitors & Scanners.”

Kalorama notes that the industry is no stranger to portability. While healthcare is just a fraction of total Smartphone and PDA sales, just about five percent of the total market, Kalorama predicts that healthcare is one of the growth areas – particularly for Smartphones, because of their ability to combine communication with alerts, references and records.

“Healthcare is a mobile profession and lends itself to these devices,” according to Bruce Carlson, Publisher of Kalorama Information. “They provide a wide range of conveniences and workflow efficiencies which can’t be achieved with traditional notepads and pocket drug references.”

The firm notes that several wireless companies have tailored their product offerings to the needs of the healthcare industry and expects this to continue.

This year Artificial Life (ALIF) introduced GluCoMo. GluCoMo is a mobile telemedicine and healthcare solution allowing diabetics, caregivers, doctors, and hospitals to share and communicate through mobile mediums such as smartphones, tablets, netbooks and other mobile internet devices. With the facilitation of mobile data sharing and smart back-end processes, the goals are to promote better personal diabetes management habits, increase peace of mind for friends, families and caregivers, and enable remote and real time monitoring and management of patients by doctors and hospitals for advancement in healthcare services and a reduction in administration costs.

GluCoMo is a customized mobile device front-end client and portal as well as a custom back-end infrastructure supported by Artificial Life's m-commerce solution OPUS-M. http://www.glucomo.com/site/en/home

The recent stock price of $0.95 doesn’t reflect the enormous potential Artificial Life (ALIF) has in this niche market. With an EPS-projection between $0.25-$0.30 this year there is enough upside potential for this stock.

POSITION: LONG