A Chinese stock we sold, Xinyuan Real Estate (XIN), is going all-American. It is buying a block-front on “High-Line-hot” Tenth Avenue between 44 and 45 St. in Manhattan for $57.5 mn. We owned it to play Chinese real estate and sold because of overbuilding. Now it has jumped out of the frying pan into the fire.

Here is a puzzle prepared by our daughter sent out by the parents of her niece (our granddaughter). Hint: it is related to our granddaughter's Bat-Mitzvah.

Can you make it out?

dl sry ntrht gnb ngm

nyrv f tnrf n gndnts dn

tnffd n tfl t thgr mrf gndr

tbhpl tnffd htw ggnl

slwv n gnntnc

!nttcnp lttl dn

A free year sub or subscription extension to the first reader who solves the puzzle and other prizes for runners-up.

I was punished for my remarks about the arab (the Vedan number rather than the people) by Sea of Red Ink stock market on Wednesday. And Microsoft forced me to update my laptop to Windows 10 by cutting off security services to Windows 8.1 diehards (like me), so I am writing my blog on the desktop clunker in Windows XP. Installing Windows 10 is a full-time job to keep from being made to switch your email and search and security services to Macrohard products like Cortana. Darn it. I thought Bill Gates had reformed the Windows machine as well as becoming a donor to good causes.

Indian-American

*The Indian-American dual national CEO's rhetoric was astonishing from a Silicon Valley guy:

"We are starting to see creative confidence blossoming within Infosys, David Kelley's beautiful idea that innovation is not specific to one department but is an ability within all of us, waiting to unleash our full creative potential. We are seeing Infoscions [sic] becoming innovators, bringing innovation and client value to each individual project. This confidence can only come from a culture of learning and empowerment, and the kind of company we endeavor to create”. These words were written by CEO and managing director Dr. Vishal Sikka who added:

"Alongside grassroots innovation, we continue to see growing adoption of our Aikido services, bringing the power of intelligent systems, automation and software to amplify the skills and imaginations of our people. This combination helped us deliver encouraging results despite the traditional seasonality of the quarter and the additional headwinds, and will strengthen the execution of our strategy towards consistent profitable growth."

The results at Infosys (INFY) were more modest for Infoscions who are shareholders, reported in International Financial Reporting System (IFRS). It hit the consensus forecast of 23¢.

Revenues hit $2.407 bn, up 0.6% sequentially and 8.5% year/year in dollars (or 12.5% in constant currencies) and also met forecasts. The bottom line in dollars was feeble, with net profit a mere $524 mn, up all of 0.9% from Q2, and only 0.4% up y/y. However in rupees, the currency in which INFY pays most of its bills, the rise in profits was a healthy 6.6% and at Rs 34.56 bn beat the Indian analyst consensus.

In fact INFY's older lines face by sinking demand while it depends more and more on newer technology which is still costly to prepare or acquire like internet automation across multiple platforms, risk control testing systems, m-commerce software, Finacle for finance customers, design systems, new cloud services, and of all things, advanced information management services for the oil and gas industries. The good side of all that diversification is that software writers in Bangalore are cheaper than ever for multinational corporation clients. And an international expert on strategy is steering the buying because INFY cannot develop everything in house.

But it is not always clear why Dr Sikka is buying software developers. In Q3 it bought Houston's Noah Consulting to get a footing in the oil and gas IT consulting business. This is an odd choice given the problems of oil pricing. In the quarter too INFY aput cash into Whoop!, a performance optimization system for sports teams, another bizarre investment given that India's top sport, cricket, is now being played in 20-20 minute innings rather than long 3-day test matches.

However, all was not negative. The main good news is that attrition of existing customers declined to 13.4% on standalone basis. Once hooked on INFY software and technology, customer stick around.

Guidance was good too. After its sharp rise in Q3 sales, INFY upped its revenue forecast for the current financial year to 8.9% to 9.3% in dollars (to 31 Mar.), boosted from an earlier forecast of 6.4% to 8.4%, lowered after Q2 results were lower than expected.

The market was pleased with the higher forecasts. Infosys positioned for a turnaround," said Dinesh Goel, a partner at outsourcing consultancy ISG India told Dow-Jones. He said he is more optimistic about Infosys than he has been for several years, with the firm especially making progress in its digital services and praised Sikka's management role.

Sikka is pushing INFY into developing digital services, which may be costly short-term but are a key to the transformation of the company to meet new global needs. The shopping spree has not ended as there is plenty of cash in the INFY piggy-bank, real cash of $4.765 bn and total assets of $10.771 bn (and liabilities net of shares totaling only $2.777 bn.)

Dr Sikka whose PhD is from Stamford, jumped ship from SAP in 2014 after he lost in the run to co-head the German firm. He is considered to be a brilliant strategist by observers of the IT industry. In Indian trading INFY rose 2.3% on Thursday. Crédit Suisse on Thursday raised INFY to outperform. INFY stock rose 9.23% so far on Wall St. Abhimanyu will file more on INFY tomorrow.

*SAP of Germany initially fell on the news that it had missed by not keeping Dr Sikka but now is up too. The two firms cooperate in accounting software apps.

*I trade ideas with UK newsletter Investors Intelligence which overnight put a buy on Dutch Gemalto (GTOMY) at euros 57 with a target price of 72. This is a comfort to GTOMY shareholders amid the mayhem.

Car Scandals

*While Fiat-Chrysler (FCAU) CEO Sergio Marchionne continued to hold forth bullishly at the Detroit Auto Show, FCAU stock plummeted. He told the Wall Street Journal on Wednesday that “there has been a permanent shift in consumer choice a press conference in Detroit, claiming that cheap oil would boost heavier vehicle sales (SUVs and trucks). But he also admitted that the US-Italian-Dutch car firm was taking “a hard look at our North American footprint” and “might to make some changes.” The Journal says this would include retooling US plants to feed our current hunger for heavy vehicles.

This morning in the Italian market, Fiat shares were suspended several times after the stock fell more than the 10% daily limit (under the Italian circuit breaker, on which the Chinese one was modeled. The stock collapse was caused by rumors that French regulators had visited several Renault plants looking for evidence of a “defeat mechanism” to fool auto emissions testing as had been done by Volkswagen. The French car-maker's stock fell 20% while rival Peugeot's shares lost 7%. In Germany meanwhile Daimler fell 5.5% and BMW 4.5% while the auto firm which started the whole investigation, Volkswagen, fell another 4.6%.

There were other rumors specific to Fiat which also hurt the stock, a report in Automotive News which accused it of making Chicago dealers report as sales vehicles which were still on the lot awaiting buyers. Two dealerships accused FCAU of racketeering, for allegedly paying dealers in return for false sales figures which met their targets. Both dealers belong to the Napleton Automotive Group.

FCAU issued a statement that the claim is “without merit” and also charged that the dealer group in question had failed “to meet its obligations under some of its dealer agreements.” FCAU also said it “is confident” about “the integrity of its business processes and dealer arrangements.”

Just because the firm is Italian doesn't mean it is criminal. But the charges undermine the good US sales growth on which Mr Marchionne's strategy depends. Here too we own a share dependent upon the top executive meeting very high expectations.

In US trading FCAU fell 9% at the opening before halving the drop to 4.7%. The market adage is there is no smoke without a fire.

*Nokia (NOK), whose HERE software was sold to a group of German auto firms, also it was road kill the previous week, down 6.75%. NOK then recovered and is now up 1.5%.

Pharma and Biotech

*Chickens coming home to roost may be hurting our Swiss drug-maker Novartis (NVS). NVS's US-based eye-care business, Alcon, is sick and requires hefty spending to accelerate growth as it fights off generics for its glaucoma drug. It also is seeing lower sales of its intraocular lens implants and less demand for contact lens cleaning solutions because people are switching to throw-away lenses.

For us there is a bit of what the Swiss call Schadenfreude over ACL's problems. We owned ACL stock before it was taken over by NVS from Nestle (which owned only 23% of ACL), avoiding a full payment to buy out the majority US shareholders at the same level, namely us. Alcon's board fought to get US shareholders equal treatment with the Swiss owners but they were ousted in late 2010 to save NVS from paying up. Instead of paying $50 bn Novartis got Alcon for under $13 bn by squeezing out US shareholders. We bought it at Frida Ghitis's call assuming there would be fair play.

*Other drug and biotech stocks were all doing well the previous week. GlaxoSmithKline (GSK) head of vaccines Moncef Slaoui told FiercePharma on Thursday at the JPMorgan drug jamboree that splitting GSK up as a big British biotech analyst Neil Woodford asks, would be a big mistake. Dr. Slaoui cited “synergies” between vaccines and pharma and they share distribution, back-office and even compliance staffers, which saves money for GSK. This was triggered by GSK CEO Sir Andrew Witty on Wednesday told the confab that consumer health could be spun off because it is so big.

*Even Benitec (BNTC) is up but the August 2010 warrants I bought with such difficulty (not added to the model portfolio for that reason) have failed to follow suit. BNTC is Australian.

Materials

*Delek Group (DGRLY) crashed on Thursday in Israeli trading because of low oil prices, down 5.2% because of foreigners exiting Arab stock markets over the low oil price (and OPEC strategy. The only comfort for Tel Aviv is that other sectors held up well, whereas the Gulf and Saudi exchange simply crashed. DGRLY here moved the same way.

*Because markets can only focus on one big horror-show at a time, Latin resource stocks were up the previous week. Vale (VALE) in European trading gained 2.7%. On the NYSE was up for 10+%. The death spiral has been reversed. However it may drop again now that the Brazilian Federal Police charged “environmental crime” against VALE and its partner BHP Billiton over the Samarco dam collapse. This will allow formal charges against the two firms as “direct polluters.” Vale said the accusations are a “surprise”. The key now is whether using the dam which burst for tailings from its own mine rather than only those for Samarco production means Vale can be charged on its own, regardless of the guilt or not of the partnership which ran the tailings dam. It is all very confusing but the market seems to be convinced that the latest futbol feint by Brasilia is irrelevant.

*Agrium (AGU) of Canada is up over 3% in sympathy. AGU makes fertilizers.

*Cameco (CCJ), Canadian uranium miner, is trending upward. Energy Fuels, UUUU, a bonus stock, is up even more than CCJ, but more sharply being more radioactively speculative.

*Veresen (FCGYF) , now mostly a pipeline operator, is up on the latest moves to link up Canada to the US without using Keystone XL which was vetoed, and without spending anywhere near as much money. There is talk of a merger of Energy Transfer Equity and Williams Cos, one of my retirement US stocks was up ~25% on Thursday. Another deal will link the TransCanada pipeline to the Magellan Midstream one to bring Canadian oil to Texas ports.

*Ecopetrol (EC), which pays for installations and work in Colombian pesos, rose 4.2%.

*BP plc (BP) is up around 6% after Libyan talks with the oil majors about repairs to its heavily damaged oil export terminal was blown up by ISIS. The talks are headed by Mustafa Sanallah who also has the problem of finding a unified government to give him orders.

Funds

*Pershing Square Holdings (PSHZF) lost 11.4% YTD based on its latest NAV, coming on top of the loss last year of double that amount. It cut its stake in Valeant 8.5% after Mike Pearson took ill, booking a distributable capital loss, but other things have now hurt Bill Ackman's fund. It was down 3.5% on Thursday, more than $10 below the $27 and change we paid and also below its NAV fixed last night at $18.57. It was an experiment to watch how a hedgie works, which may not continue unless Mr. Ackman figures out a change of strategy.