Luca

Selling some EXOR to add to my CHINA Basket.

Ming Fai is an interesting one, i saw that David Webb already pressured them in 2016 because they where bloated and overcapitalized which still seems to be the case, stock price even cheaper now that it is back then...

Since Fairfax is a big position for me, i am looking forward to further rates raising

Yes, I started research into Lufax (a thread exists) and Ping An Insurance, the first is more interesting. I'll open a starter into Lufax when HK stock market opens in around 12 hours. And i fully agree with your statement, Big Tech is cheap but there are even better bargains.

It wont be an immediate game changer and those countries have their own problems as does the US, France etc. But its one hell of a signal to build this alliance in the first place and to say this will "fail" without the alliance having even started is more than funny!

Yep, terminal multiple can ruin returns on a good growing business if bought too high. 1x Book doesn't seem egregious at all for FFH and still a strong buy considering the tailwinds etc. DCFs for Amazon, Alphabet etc make sense with a 25x exit multiple but 13-15x looks a lot worse.

The thought of flying around with an airplane and then getting shot down is scary But yeah, could have predicted that.

Its only a matter of time that BRICS turns the world upside down. Cheap energy, cheap labour. They have the potential to turn their economies into strong powerhouses. Africa has nothing to lose too and chinese etc are perfectly willing to work with corrupt or non corrupt leaders and built out their own economic system. Meanwhile the west produces many products and ressources there and resells at high mark up, if things get mixed up here... And tell me about decoupling. Seems like the west gets decoupled by many things too!

But despite differences, Brics leaders expressed a common belief that the international system was dominated by western states and institutions and was not serving the interests of developing nations. Nearly two dozen countries had formally applied to join the club from across the “global south”, a broad term referring to non-western nations. About 50 other heads of state and government attended the summit, underscoring what Brics leaders say is the attractiveness of its message. “This membership expansion is historic,” said the Chinese president, Xi Jinping, whose country is the most powerful in the group of non-western states that represents a quarter of the world’s economy. “The expansion is also a new starting point for Brics cooperation. It will bring new vigour to the Brics cooperation mechanism and further strengthen the force for world peace and development.” The Brazilian president, Luiz Inácio Lula da Silva, said with the admission of six new members, the bloc would represent 46% of the world’s population and an even greater share of its economic output.

And focus on the hypocrisy and onesided view of the media again, in Russia you get shot down by an Airplane. In the US you will get the Snowden and Assange treatment. But russia gets the news flow and the big headlines while assanges treatment did get critiques but its different. "He faces a real risk of serious human rights violations including possible detention conditions that would amount to torture and other ill-treatment (such as prolonged solitary confinement). The fact that he was the target of a negative public campaign by US officials at the highest levels undermines his right to be presumed innocent and puts him at risk of an unfair trial."

https://www.theguardian.com/business/2023/aug/24/five-brics-nations-announce-admission-of-six-new-countries-to-bloc Brics to admit six new countries to bloc including Iran and Saudi Arabia

Wagner official telegram account confirmed his death too, russian local governments as well. Very very scary.

Yeah many good things said, not a gun expert but id say that bullets are not as difficult to produce and distribute as something like coca cola and their specific global network. And yeah, these insanely high margin low capex businesses that are similar to coke have great moats and profitability metrics. (liquor companies, maotai). Another aspect is the nature of the item IMO, cars cant be sold many times over but everybody drinks their regular coke. Same probably also true for bullets which you dont just buy one time and then are done for life. There are some who buy ferraris whenever they are released but the nature of the product is different. Just some thoughts!

These Tension with Taiwan have been here since the KMT dropped over to Taiwan so 70 years of this, previously also with some bombin. Munger said it himself, the Invasion is off the table for a long time. If you have a good stomach and can look forward over the next few years i think there is a lot of money to be made

From everything i read about china the last years, the hours over hours i consumed, its unthinkable to me that china will be russia 2.0 or that they will attack taiwan and ruin that beautiful island. I doubt anybody wants to destroy entire generations with another war BUT you never know and you certainly cant hedge with US largecaps!

And for the Berkshire Shareholders too, 177b of value in the apple stake. More than a fifth of revenues coming from china, including taiwan even more. 1/3 of the growth coming from china in 2021 for apple revenue. China risk? What about paying 30x earnings for LVMH? If china risk is real id sell that too if i were honest with myself. the CCP already cracked down on some influencers that promote luxury status races. The world is heavily connected, decoupling is not possible and makes some good headlines and click volume.

And it can be seen by this thread how hated and disregarded china is. Its a stinking fish in the corner that everybody spits on. If id look somewhere for businesses to buy shares in id look in china! How much riskier is it to buy these 25x earnings+ flyers in the US that dont grow much compared to decently managed cheap bargains in china? Id very much prefer the latter. Stock based compensation considered alphabet trades at close to 40x earnings, 2.5% yield. Who buys this and expect meaningful performance over 5-10 years. The terminal value multiple has to be so high to get to some kind of market outperformance. And then what about the china risk? The taiwan risk? If you seriously think china will shake things up with their military, owning any larger US big market cap would be out of the picture too, the whole car supply chain, the growth in china priced in. It doesnt make any sense!

Because they are in the midst of economic problems and changing tides, They were at 1.7 in 2016. I doubt it stays this static and we have not seen significant government incentives in that regard yet. And they are already tackling many of these sectors, as we have seen with recent crackdowns. As if some outside spectator can make such a statement! Absolutely not how reality looks like, and I doubt very much that the CCP thinks they solely are in charge of capital allocation. We will see if that statement turns out to be true.

My base case is that economic problems will sort themselves over time (3-5 years), GDP growth accelerates as well by then, the US and West realizes that they cant deal without china in economic questions, get anything done regarding the climate crisis without them etc, need their markets and personell, factories etc. China will continue growing their country, todays completely disregarded valuations will get back to pre october 2022, the good strong businesses will continue to flourish and we will outperform the market by miles due to multiple expansion+ faster growing economy. I also think birth rates will reaccelerate, maybe not above 2.1 but comparable to western standards.

Around 15-20% is in China now and regarding risk, i think its way overblown and i am willing to bet a part of the PF. So far i have not seen any fundamental problems with chinas trajectory besides perhaps the slowing birthrate that is my most significant worry. I would change my mind if they actually privatize many big companies with no regard for shareholders just for the sake of privatization, a real shift away from privately owned enterprises. The tutoring companies interefered with education etc so i have an understanding for that move. But everything i hear from china i think is temporary and the long term outlook remains with growth and innovation.

Because the US has a sleepy government that just doesnt really care and can be easily bought!

Opened a basket of china retail: PDD and JD.com. And added to Prosus. Comparatively, so much cheaper than western retail and china retail will continue to grow strong. Will do further digging but JD especially seems quite cheap again with a 5 year outlook.

Literally true for western politicians too

@james22 Do you own or have you owned any shares in chinese companies or companies with significant stakes in china?