In the search for a teacher, I found a Guru. Thanks, Ashwath for all your teachings and most importantly, posting that on youtube to promote a free and open learning ecosystem.
Today is Teachers' day in India, and I just wish I knew about you just 5/7 years earlier.... My life would have been so different! But anyways it's never too late... I'm glad you're my teacher now (best in your subjects) Happy teachers' day Professor.
I've bought several tranches of BABA at an average price of $140.15. Your video was instrumental in my committing the capital. Should do well over a decade. Thank You!
Amazing as usual ! A shame Baidu was not here instead of Didi, which is clearly too risky, whereas Baidu has a recent history of investments and shift towards AI that can explain the drop in financial performance but could let the investors (well, VIE holders) reap the fruits in a near future. Would have loved M. Damodaran's view on this, but also the risk related to data and CCP when it comes to Baidu specifically.
In listening to other lectures by the professor, I believe his opinion of BIDU would be somewhere between his comments on JD and his comments on DIDI. They(BIDU) have the same Cayman Islands shell company thing going on, as I understand it. Their fundamental profit trend in their 10K, and cash flow trend are not as good as Baba, but not as ugly as DIDI.....
Simply amazing explanation!! Thank you for sharing knowledge! I am watching your videos on valuation. I have been learning it for long time but never find awesome content with simple explanation. Thank you very much.
Hi professor, thanks for the great post. I found one inconsistency regarding the currency you used for the input sheet of Tencent Valuation. The actual number you input here is RMB instead of HKD.
Alibaba and JD are listed in the hong kong stock exchange, ticker 9988 and 9618. Is Damodaran wrong or am I missing something? Most likely the second one :)
I think you are correct. Adding to the confusion, their current prices in HKD do not correspond at all with the share prices in CNY that Damodaran uses in the spreadsheets. Did he make a mistake with the ADR ratio or the currency translation?
@@jakelo1045 IIRC Baba's HKSE shares and NYSE shares have a ratio of around 1:8, derived from the (mostly) set exchange rate between HKD and USD. It's designed such that the prices are roughly equivalent both ways despite different currencies. Not sure about JD or how the notional of CNY used in his presentation affected things here.
A unique and informative perspective. Thanks for posting. Edit: I'm a little confused regarding the Tencent VIE comments. My understanding is that the HKG listed 0700 security and the OTC listed TCEHY both are part ownership in a VIE structure. Could you elaborate on this?
Why are the valuations so conservative for the "probable" scenario at 30:00? My guess is that they are aligned with current PE ratios. Would it be valid to assume these ratios could fall closer to what we saw before the crackdown, if the final extent of the regulations are somewhat reasonable 1 or 2 years into the future?
Professor, Suggest you doing a quick video on recently released draft rules on overseas listing from Chinese regulator. Legitimizes VIE structure. SCMP article suggests Chinese companies will be also able to direct list on US exchanges, eliminating need for VIE. More specifically, BABA could eventually dump VIE structure and directly list in the US.
I stumbled upon him through CFA's linkedin post and then saw his video on 'groww'.I had no idea he is one of the top most finance proffesors in the world.He is such a good Orator.We need him in Indian B School.
Thank you Professor Aswath Damodaran. Of all the value investing analysis I get in the internet for chinese tech companies, only yours are able to provide me a more detailed explanation. The crackdown is not temporary and it could bring permanent shift towards a company's value, hence merely looking at its past fundamentals and expecting status-quo like you mentioned do have risk.
Thank you for the very insightful article. I hold three of the aforementioned. Your pick is excellent, in the sense that I also think Tencent has the most potential, but more due to the business they are in as opposed to retail and service. The reasoning on your pick; however, omits material facts on Alibaba, which may in the process change your valuation. You can actually own Alibaba without buying the ADR; buy Alibaba in Hong Hong and avoid the concerning delisting risk. Jack Ma no longer actively involved in management. Also, one of JD's business components, a crucial one, is logistics, last mile delivery services, in which it has invested robustly in recent years. Therefore, and in addition to capturing market share, operating performance seems lackluster. Taking these factors into considerations may improve your valuation. Noting also, that your point is well taken, the Chinese Government may be adverse with regulations, but not necessarily directly adversarial as in an active target. Meaning, looking at the larger picture of why a socialist government imposes regulations is key to how that affects these companies and may provide better insights on its future actions. Thank you again.
Thank you professor for another gem. I was hoping to see you on CNBC discussing China's Evergrande fallout and its implications on the rest of the market and the global growth. Would be great to hear your thoughts on the subject.
Amazing analysis, thanks alot ; question given your valuation model vs today's market values for both BABA and Tencent, it seems that they are below the worst case scenario that you have shared in the video , thus theoretically it has good margin of safety. Based on the current business, monetary and geopolitical environment what are your views about those valuations vs today's prices ?
that moment when i valued tencent at 532HKD and I bought it and Aswath also buys it :D amazing analysis professor as always. I know you would like some feedback loop. Can't give you one. Good day
Thanks for sharing. I like your approach. Like many chinese ppl, I owe shares of both companies. They are digital infrastructure in China and still have huge potential in long term, say 10 to 15 years. There is a big difference between BABA and Tencent in investment strategy. BABA tends to recruit its invested company into its operating side. And Tencent tends to stay as an investor behind the growth stories. Thus Tencent is more successful internationally. It is a holding company. A big portion of the revenue comes from the investment. It is behind the names like epic games. BABA has some short term problem, which is due to politics. That is the most problematic part in China. They dislike the politicians to be related to business. Generally, I am long on both.
my average cost on BABA is 153$. not that great compared to 112$ today but considering to buy more. This can be an opportunity where risk reward is highly asymmetrical
Do you maintain statistics on price convergence time of your investments? Would be interesting to cross-check against market returns for the same time.
@@AswathDamodaranonValuation Hi Prof, how does a VIE in HK differ from Alibaba's structure, If I understand correctly you still own the shares of the shell company, which has Wholly owned foreign entity that is in china, which in-turn has agreements with the VIE.
I believe that the Prosus discount will narrow over time, but it won't be fast or easy. I certainly can't fault you for wanting to avoid stacking corporate governance risk.
@@Simon_S22 Logically thinking if one is afraid government Prosus sounds the safest option, since if China took radical measures Prosus at least is located in EU and would probably have best chance to recouping something due to EU pressure.
Why does the discount exist in first place. Even with techy rallied until feb the discount was similar. Its not a big secret and any institutional investor who wanted to arb it out, would have. Why havent they? Why should retail investors take the initiative on one more layer of risk? I havent found this point addressed in anywhere in value investor community...
@@srh80 Perhaps the current discount is fairly close to the bottom discount that will remain until something happens? For example, maybe one of the other Prosus investments becomes valuable enough that owning it + tencent even through layer is worth more than tencent. Until then, maybe the discount just remains and even slightly widens.
Professor, you are very clever and knowledgeable. But high investment return needs luck element. If I want to invest in Chinese market, I will invest in both Tencent and Baba instead of single company.
@@AswathDamodaranonValuation hi, i tried on both youtube and the blog earlier without success...i will use another browser and see if it works.. Let u know again. Thanks Prof for educating us.all..😊
@@AswathDamodaranonValuation hi, i used microsoft edge and it worked via the blog but couldn't access thru youtube. Google chrome didn't work on blog or youtube.... hope this info will help others who need the info.. thanks Prof
I would challenge the target margins for Alibaba. 12% is definitely understated for base case. If your conspiratorial view is that China wants these companies to keep collecting data as long as they are shared with the government, that is insanely good news for Alibaba's cloud business as alibaba needs that division to grow in order to continue collecting data. That would mean China would, either directly or indirectly assist in the growth of Alibaba's cloud business - which is already the dominant force in the country. 20% is probably closer to the long term mark. Also, Jack Ma is no longer part of the Alibaba's day to day. Not sure why he keeps popping up in relation to Alibaba. He announced he was stepping down in 2018. Operationally, he was no longer really involved. It was made official in 2020. Which means any beef the CCP has with Ma is unlikely to manifest by punishing Alibaba. Remember, this crackdown was a long time in the making. Jack Ma's overreach was just the final straw.
Chinese companies growth so much because Chinese government sometimes limited access to China for foreign companies… that’s how the Tencent started and i think a lot of other companies there…
Thanks for this video and walkthrough! Been following the discussions around chinese tech for a while. Sudden pricedrops combined with revenue increases should usually demand some attention. Actually the first thing that interested me was the 'Trump vs Huawei' debacle in 18..19, and later 'Trump vs TikTok'. Here it was stated from the american side that chinese tech was dangerous to people in the west, controlled by the state, spying on us etc. When chinese govt is so actively trying to reign in its own tech giants, that narrative seem to have broken down now! Instead chinese tech is seemingly loathed by both the western and chinese govt. (While tik tok and aliexpress are still very popular). I find the discussion about these issues very poorly informed, for various reasons. I like the pricing of that sector compared to qqq for instance, BUT given what you say in this video, I'm trying to avoid individual companies, because I realize how poorly informed I am... Instead trying something like KWEB. Again, thanks for the video, china is not easy to understand or predict.
China rightly deserves the cynicism coming from international investors. They could have conveyed their intentions in a way that may have avoided the panicked sell-off altogether. I think the language barrier is a big culprit of the chronic miscommunication between China and the rest of the world. Chinese and English don't exactly translate well back and forth. But that's a whole subject on its own that I won't get into. With that said however, I think there's a very important component in the China equation that a lot of international investors are missing. Business in China is not just a circle jerk between government and corporations like it is in the US. The social welfare and well-being of the people is a massive factor to consider. It's important to ask the question, "what is the net benefit to society as a whole? ". That's a very critical component to understanding China's decision making process in public policy and business policy, just as it is in Singapore. Yes, it's about the politburo retaining power, no disagreements there. But just as it has always been in China's long history, the power of the emperors, or politburo in this case, is vested to them by the people. Without the support and will of the people, they lose the "Mandate of Heaven" and their right to rule. Think about it this way, the American system cannot be copied and pasted to China's 1.3b population. America has 1/4th the number of people to manage. What works for one country may not work for others. You cannot just copy one nation's model and paste it all around the world. You can try, but there's been plenty evidence of this failed endeavor as of late. What it comes down to in China, as far as business is concerned, is that the benefit of the few cannot come at the detriment of the many. I know this concept flies over the heads of many investors who are accustomed to the American way where they think the market is a zero-sum game. But this fundamental difference in principle is key to understanding China (or anticipating China's so called "next move") . Without any consideration for it, it doesn't matter how you shift and shuffle your numbers around your model. You might as well roll dice, ask the magic 8 ball or throw darts as your selection method for Chinese equities. On the other hand, for those that do understand this fundamental difference in government-people dynamics, the panicked sell off was a Godsend. And before people in the comments start trying to chastise me for highlighting the positive case for China, no I am not a China bot and whatever other childish nonsense of the like. I'm from Singapore and I'm invested in both US and China.
Its a cultural thing also. We are not meant to "question" the government's motives and give them benefit of doubt that they are doing things for our benefit
![Seungmin "그렇게, 천천히, 우리(As we are)" | [Stray Kids : SKZ-PLAYER]](http://i.ytimg.com/vi/kAzmhLHePqU/mqdefault.jpg)
That's by far the best analysis of the tech crackdown in China I've seen so far. Thanks a lot for sharing.
Hi, What did you deduct from this?
In the search for a teacher, I found a Guru. Thanks, Ashwath for all your teachings and most importantly, posting that on youtube to promote a free and open learning ecosystem.
One thing Mr Damodaran. While tencent is hk listed, they are incorporated in cayman islands as well. They use the same VIE structure as Alibaba.
As is Baba. Why are they so lazy that they have to hide behind VIE in Hong Kong?
Intelligent no bs information. What the world needs.
Hi, What did you deduct from this video?
hello casey burns investing, i see you everywhere in the comment section
The Tencent shares in Hong Kong are also VIEs just not ADRs I believe
exactly
35:05 Alibaba is also listed on HKEX, Jack Ma is no longer involved with alibaba
Today is Teachers' day in India, and I just wish I knew about you just 5/7 years earlier.... My life would have been so different!
But anyways it's never too late... I'm glad you're my teacher now (best in your subjects)
Happy teachers' day Professor.
@35:20 Isn't Tencent also listed under the VIE structure?
I've bought several tranches of BABA at an average price of $140.15. Your video was instrumental in my committing the capital. Should do well over a decade. Thank You!
Amazing as usual ! A shame Baidu was not here instead of Didi, which is clearly too risky, whereas Baidu has a recent history of investments and shift towards AI that can explain the drop in financial performance but could let the investors (well, VIE holders) reap the fruits in a near future. Would have loved M. Damodaran's view on this, but also the risk related to data and CCP when it comes to Baidu specifically.
In listening to other lectures by the professor, I believe his opinion of BIDU would be somewhere between his comments on JD and his comments on DIDI. They(BIDU) have the same Cayman Islands shell company thing going on, as I understand it. Their fundamental profit trend in their 10K, and cash flow trend are not as good as Baba, but not as ugly as DIDI.....
Great lecture. Unbiased, clear and easy to understand. Thank you for this!
Appreciate your work on this analysis. So much “no way” or “time to load up”. Makes it difficult to trade with confidence.
Simply amazing explanation!! Thank you for sharing knowledge! I am watching your videos on valuation. I have been learning it for long time but never find awesome content with simple explanation. Thank you very much.
Hi professor, thanks for the great post. I found one inconsistency regarding the currency you used for the input sheet of Tencent Valuation. The actual number you input here is RMB instead of HKD.
Excellent presentation. Thank you so much for the well informed analysis. Your students are lucky to have you.
Alibaba and JD are listed in the hong kong stock exchange, ticker 9988 and 9618. Is Damodaran wrong or am I missing something? Most likely the second one :)
I think you are correct. Adding to the confusion, their current prices in HKD do not correspond at all with the share prices in CNY that Damodaran uses in the spreadsheets. Did he make a mistake with the ADR ratio or the currency translation?
@@jakelo1045 IIRC Baba's HKSE shares and NYSE shares have a ratio of around 1:8, derived from the (mostly) set exchange rate between HKD and USD. It's designed such that the prices are roughly equivalent both ways despite different currencies. Not sure about JD or how the notional of CNY used in his presentation affected things here.
A unique and informative perspective. Thanks for posting.
Edit: I'm a little confused regarding the Tencent VIE comments. My understanding is that the HKG listed 0700 security and the OTC listed TCEHY both are part ownership in a VIE structure. Could you elaborate on this?
I think you are right. Besides, I wonder if buying Naspers or Prosus is not a smart way to avoid the VIE status (besides the discount).
Why are the valuations so conservative for the "probable" scenario at 30:00?
My guess is that they are aligned with current PE ratios.
Would it be valid to assume these ratios could fall closer to what we saw before the crackdown, if the final extent of the regulations are somewhat reasonable 1 or 2 years into the future?
That was the best video on china stock you can find on youtube. Thank you!
Professor, Suggest you doing a quick video on recently released draft rules on overseas listing from Chinese regulator. Legitimizes VIE structure. SCMP article suggests Chinese companies will be also able to direct list on US exchanges, eliminating need for VIE. More specifically, BABA could eventually dump VIE structure and directly list in the US.
Thank you for this session, it is a much needed one
I stumbled upon him through CFA's linkedin post and then saw his video on 'groww'.I had no idea he is one of the top most finance proffesors in the world.He is such a good Orator.We need him in Indian B School.
You could buy alibaba on Hong Kong exchange too under 9988, not only BABA on US markets :)
It's still a VIE, just not an ADR :]
Thank you Professor Aswath Damodaran. Of all the value investing analysis I get in the internet for chinese tech companies, only yours are able to provide me a more detailed explanation. The crackdown is not temporary and it could bring permanent shift towards a company's value, hence merely looking at its past fundamentals and expecting status-quo like you mentioned do have risk.
this is exactly what i needed, thank you Professor
Thank you for the very insightful article. I hold three of the aforementioned. Your pick is excellent, in the sense that I also think Tencent has the most potential, but more due to the business they are in as opposed to retail and service. The reasoning on your pick; however, omits material facts on Alibaba, which may in the process change your valuation. You can actually own Alibaba without buying the ADR; buy Alibaba in Hong Hong and avoid the concerning delisting risk. Jack Ma no longer actively involved in management. Also, one of JD's business components, a crucial one, is logistics, last mile delivery services, in which it has invested robustly in recent years. Therefore, and in addition to capturing market share, operating performance seems lackluster. Taking these factors into considerations may improve your valuation. Noting also, that your point is well taken, the Chinese Government may be adverse with regulations, but not necessarily directly adversarial as in an active target. Meaning, looking at the larger picture of why a socialist government imposes regulations is key to how that affects these companies and may provide better insights on its future actions. Thank you again.
Hi were u able to open the attached valuation spreadsheets? thks
@@irenelye5706 I did not open the valuation spreadsheet.
This informative video needs more views than ever. Very well put together Aswath Damodaran.
Thank you professor for another gem. I was hoping to see you on CNBC discussing China's Evergrande fallout and its implications on the rest of the market and the global growth. Would be great to hear your thoughts on the subject.
Amazing analysis, thanks alot ; question given your valuation model vs today's market values for both BABA and Tencent, it seems that they are below the worst case scenario that you have shared in the video , thus theoretically it has good margin of safety. Based on the current business, monetary and geopolitical environment what are your views about those valuations vs today's prices ?
Why US government risk not included in the model? (ex delisting risk)
that moment when i valued tencent at 532HKD and I bought it and Aswath also buys it :D
amazing analysis professor as always. I know you would like some feedback loop. Can't give you one.
Good day
Thanks for the video. 🙏
Holding Tencent in the name of prosus.🎁
Thank you so much for the in depth analysis and learned lot of points in this 40min.
What a great video title. Bloomberg wishes they did that for their own headline
Thanks for sharing. I like your approach. Like many chinese ppl, I owe shares of both companies. They are digital infrastructure in China and still have huge potential in long term, say 10 to 15 years. There is a big difference between BABA and Tencent in investment strategy. BABA tends to recruit its invested company into its operating side. And Tencent tends to stay as an investor behind the growth stories. Thus Tencent is more successful internationally. It is a holding company. A big portion of the revenue comes from the investment. It is behind the names like epic games.
BABA has some short term problem, which is due to politics. That is the most problematic part in China. They dislike the politicians to be related to business. Generally, I am long on both.
This is such a good analysis! Thank you Sir for sharing your work with us!
Why is the cost of capital 0% for Didi in the column "Government as adversary" ?
Can you do the same for Evergrande or Huarong?
Thx so much Mr Damodaran.
What a deep analysis.
Thank you professor! Glad to keep learning from your wisdom!
Ok I have feedback. Why at 30:03 Tencent value on the net negative the value is 512.83KH$ and in the net Minus spreadsheet it's 531.16HK$ ?
my average cost on BABA is 153$. not that great compared to 112$ today but considering to buy more. This can be an opportunity where risk reward is highly asymmetrical
Tencent holding is a shell company in Cayman, too. Is there any difference between Tencent and Alibaba VIE?
I’m wondering where those 2 thousands data of GDP came from?
Good analysis and i will go with both tencent and alibaba... 50:50
Do you maintain statistics on price convergence time of your investments? Would be interesting to cross-check against market returns for the same time.
Thanks for the video! I enjoyed the analysis. Do you see the situation happening with Evergrande impacting the China stock market?
Aren't HKEX-listed alibaba and tencent shares also VIE's?
Alibaba and Tencent. Tencent's VIE is in Hong Kong, but Alibaba's is in the Cayman Islands.
@@AswathDamodaranonValuation Hi Prof, how does a VIE in HK differ from Alibaba's structure, If I understand correctly you still own the shares of the shell company, which has Wholly owned foreign entity that is in china, which in-turn has agreements with the VIE.
Ever thought about changing the templates here and there?
Excellent analysis!! Thanks a lot prof
are the valuation spreadsheets are longer available?
I believe that the Prosus discount will narrow over time, but it won't be fast or easy. I certainly can't fault you for wanting to avoid stacking corporate governance risk.
He’s afraid of being canceled by China
@@Simon_S22 Logically thinking if one is afraid government Prosus sounds the safest option, since if China took radical measures Prosus at least is located in EU and would probably have best chance to recouping something due to EU pressure.
Why does the discount exist in first place. Even with techy rallied until feb the discount was similar. Its not a big secret and any institutional investor who wanted to arb it out, would have. Why havent they? Why should retail investors take the initiative on one more layer of risk? I havent found this point addressed in anywhere in value investor community...
@@srh80 Perhaps the current discount is fairly close to the bottom discount that will remain until something happens? For example, maybe one of the other Prosus investments becomes valuable enough that owning it + tencent even through layer is worth more than tencent. Until then, maybe the discount just remains and even slightly widens.
Thank you for the free and quality lecture , professor !
Excellent one. Thank you Prof for making this lucid a presentation.
Wonderful presentation of thesis, interrelating and presenting in an order.
I really enjoy your analysis! Thank you very much.
Hi! I see that Prosus owns about 29% of shares. Not 46.5. What do you ment saying that it owns 46%?
When 40 mins worth 40 hours
👍 A very interesting video, I learnt a lot, thank you! I'd really like to see a video of some of India's major emerging public companies too? 🇦🇺
Isn't alibaba listed as well in HKEX?
I'm deeply grateful for the knowledge you share thank you
I'm at the gym right now but when I saw this video I immediately clicked.
Professor, you are very clever and knowledgeable. But high investment return needs luck element. If I want to invest in Chinese market, I will invest in both Tencent and Baba instead of single company.
Sir can you do a video on hedera hashgraph
The Best Thing in the world right now..Thanks Prof.
sounds all good and great... but you missed 1 important thing.... you're actually not buying the company shares
At which dates were prices sampled for this video?
Thank you 🙏 I am surprised so few investment managers share this information. You would think it is relevant to investment decisions.
Sir you are a lovely teacher.
I love this entire breakdown!!
This is incredible! Thanks a lot, Professor.
Hol do u calculate the value per Share in Page 18
BR
Great wisdom of fishing in choppy waters.
Hi Prof, can u give us access to the valuation spreadsheets? Thank you very much
Try a different browser. Google Chrome has issues.
@@AswathDamodaranonValuation will do.. Thank you!!
@@irenelye5706 I am not sure what’s going on, but the links are down in the RUclips page. They are accessible from the blog post.
@@AswathDamodaranonValuation hi, i tried on both youtube and the blog earlier without success...i will use another browser and see if it works.. Let u know again. Thanks Prof for educating us.all..😊
@@AswathDamodaranonValuation hi, i used microsoft edge and it worked via the blog but couldn't access thru youtube. Google chrome didn't work on blog or youtube.... hope this info will help others who need the info.. thanks Prof
Is alibaba any different from a spac
Excellent presentation.
is alibaba worth 170$ for it's ADR ?
The Valuation spreadsheets links doesn't work
I would challenge the target margins for Alibaba. 12% is definitely understated for base case. If your conspiratorial view is that China wants these companies to keep collecting data as long as they are shared with the government, that is insanely good news for Alibaba's cloud business as alibaba needs that division to grow in order to continue collecting data. That would mean China would, either directly or indirectly assist in the growth of Alibaba's cloud business - which is already the dominant force in the country. 20% is probably closer to the long term mark.
Also, Jack Ma is no longer part of the Alibaba's day to day. Not sure why he keeps popping up in relation to Alibaba. He announced he was stepping down in 2018. Operationally, he was no longer really involved. It was made official in 2020. Which means any beef the CCP has with Ma is unlikely to manifest by punishing Alibaba. Remember, this crackdown was a long time in the making. Jack Ma's overreach was just the final straw.
hi,, is anyone able to open the valuation spreadsheets? thanks
Yeah it works.
Was getting the file not on server errror on RUclips app.
You can go to the musings on Markets blog with your browser to get the files.
Chinese companies growth so much because Chinese government sometimes limited access to China for foreign companies… that’s how the Tencent started and i think a lot of other companies there…
Always appreciate your insight. Thank you.
Valuation Spreadsheets working for anyone?
Much needed, thankyou!!
Thank you, Professor 🙏
content like these r for free. India will gain a lot
before you start patting yourself in the back 😂😂😂 he knew we'd be doing that
Thanks for this video and walkthrough! Been following the discussions around chinese tech for a while. Sudden pricedrops combined with revenue increases should usually demand some attention. Actually the first thing that interested me was the 'Trump vs Huawei' debacle in 18..19, and later 'Trump vs TikTok'. Here it was stated from the american side that chinese tech was dangerous to people in the west, controlled by the state, spying on us etc. When chinese govt is so actively trying to reign in its own tech giants, that narrative seem to have broken down now!
Instead chinese tech is seemingly loathed by both the western and chinese govt. (While tik tok and aliexpress are still very popular). I find the discussion about these issues very poorly informed, for various reasons. I like the pricing of that sector compared to qqq for instance, BUT given what you say in this video, I'm trying to avoid individual companies, because I realize how poorly informed I am... Instead trying something like KWEB. Again, thanks for the video, china is not easy to understand or predict.
China rightly deserves the cynicism coming from international investors. They could have conveyed their intentions in a way that may have avoided the panicked sell-off altogether. I think the language barrier is a big culprit of the chronic miscommunication between China and the rest of the world. Chinese and English don't exactly translate well back and forth. But that's a whole subject on its own that I won't get into.
With that said however, I think there's a very important component in the China equation that a lot of international investors are missing. Business in China is not just a circle jerk between government and corporations like it is in the US. The social welfare and well-being of the people is a massive factor to consider. It's important to ask the question, "what is the net benefit to society as a whole? ". That's a very critical component to understanding China's decision making process in public policy and business policy, just as it is in Singapore. Yes, it's about the politburo retaining power, no disagreements there. But just as it has always been in China's long history, the power of the emperors, or politburo in this case, is vested to them by the people. Without the support and will of the people, they lose the "Mandate of Heaven" and their right to rule. Think about it this way, the American system cannot be copied and pasted to China's 1.3b population. America has 1/4th the number of people to manage. What works for one country may not work for others. You cannot just copy one nation's model and paste it all around the world. You can try, but there's been plenty evidence of this failed endeavor as of late.
What it comes down to in China, as far as business is concerned, is that the benefit of the few cannot come at the detriment of the many. I know this concept flies over the heads of many investors who are accustomed to the American way where they think the market is a zero-sum game. But this fundamental difference in principle is key to understanding China (or anticipating China's so called "next move") . Without any consideration for it, it doesn't matter how you shift and shuffle your numbers around your model. You might as well roll dice, ask the magic 8 ball or throw darts as your selection method for Chinese equities. On the other hand, for those that do understand this fundamental difference in government-people dynamics, the panicked sell off was a Godsend. And before people in the comments start trying to chastise me for highlighting the positive case for China, no I am not a China bot and whatever other childish nonsense of the like. I'm from Singapore and I'm invested in both US and China.
Its a cultural thing also. We are not meant to "question" the government's motives and give them benefit of doubt that they are doing things for our benefit
Great insights , thank you so much for sharing.
Thank you 🙏
Sir You are Gem ! Always amazing content !
Sir please review indian stock market
Thank you Guru.
Thank you soo much prof!!
hey Professor Damodaran, I feel Jack ma has almost little to no control over Alibaba as of now tho.
Thank you, Professor!
Thanks for sharing!
great content! thanks for sharing!!! 👑
How to buy tencent in usa?
Tcehy otc market
@@srh80 which app u use?
@@ap1038 interactive brokers
@@srh80 thank you for information