One of the better analyses I've seen out there. Earned the sub! I certainly agree, $JD and other 'high quality' Chinese companies carry a great deal of what I'll simply dub US-China relations risk (understatement lol). However, I believe 'most' of this risk is priced in at the moment. There's a reason a business like JD looks so cheap right now. 5 years ago, you'd pull the trigger in a heart beat if it was trading at these levels. The irony of investing is that you're often waiting for the 'perfect' time to buy, but when that moment comes, you either no longer want it (because of market sentiment) or it doesn't feel as good as you thought it would 😅. Be greedy when others are fearful - easier said than done.
Baba & JD valuation reminds me of the lost decade era.... Personally, i own them. they are cheap with any valuation metric used. but i understand if people fear investing in them. Good Luck & Thanks for the video
Hey Cameron . MCD is starting to head off the peaks .I would love to see their evaluation breakdown esp considering how much land they own . Also today's report about obesity in US makes me wonder how much of pivot company will have to make and if it is worth adding more margin of safety because of that. - Thanks for all work you are doing to educate people
Thank you for your videos and your effort for them. Great job. What do you think about REITs? Do you have any videos about let's say Realty Income? I would like to also learn how to assess REITs.
I understand you don't feel comfortable owning Chinese equities, but given the risk/reward here it's hard not to invest and just limit your position size. Holding a 3% position size is not that large, it could grow to be 10% of your portfolio and I believe the downside (long term) risk from here is VERY VERY low. Their net debt alone would give you 50+% protection in they went out of business.
The $33 stock price you mentioned in the video is actually th ADR price witch account for 2 shares in the Hong Kong stock exchange. Shouldn't you consider this in your model? 🤔
The last decade of tailwinds to the China economy now leads to a decade of headwinds. Bad idea to fight big secular trends: (1) Property bubble unwind (2) Bank leverage unwind (3) Diversion of GDP to military buildup (4) Diversion of GDP to infrastructure failure (ongoing reckoning of tofu-drek construction) (4) Lie flat generation - massive and growing unemployment in younger generations (5) Manufacturing sector in decline due to competition from other Asian alternatives (6) Unwind of globalization trend (US protection of bluewater routes unwinding) (7) Conflicts with India and Taiwan inevitably adding to isolation drag
@@footballfinanceguy I said nothing about the Hang Seng. I specifically said "tailwinds to the Chinese ECONOMY." Those tailwinds were created by a variety of factors including a massive credit bubble and a mountain of gov't incentives that drove unsustainable real estate expansion and endless 8%-10% GPD.
As a student of china for the past 43 years and a value investor my sources have indicated that the chinese economy is in a seriously bad situation. Do some deep research into the country before buying.
My question is, how worse can it get? Once Chinese citizens realize the importance of owning more than just real estate, their stock market could sky rocket.
The Chinese citizens have absolutely no say in the decisions. I am sure the citizens in Ukraine wish their economy was stronger, who knows how long before things improve.
@@cicatrace That is not the issue. From my knowledge it is very much intended from the chinese government that the only real possible investment you can make is the housing market. Chinese citizens can't invest in foreign markets. Otherwise a lot of chinese money would flow out of the country. But then again this closed of system deters international investors from investing in chinese companies. And obviously there are other big issues with this dictatorship.
Pls throw sobre light here, he said 9bi in debt and 20bi in cash, where do these numbers are coming from? Un GuruFocus, in seeing 46bi in total liabilities and 85bi in total assets (being 38bi and 35bi in current liabilities and current assets). Am I missing something?
These are all great numbers, but I don't see a reason why the stock is cheap now. That has to be factored in. Some good points about the Chinese economy are mentioned in these comments.
Cameron, do you delete old videos for particular reasons? I went to go back and look at your take on a company I already owned when you covered them... And I can't find it. I'm assuming you took it private or deleted it. Am I crazy? Maybe you didn't make a video on them and I'm mixing it up...
"Stock prices converge to profit growth in the long run." Does this quote apply to Chinese stocks too? and why has JD's share price fallen the most compared to other Chinese stocks like BABA and PDD? How can we be sure that Xi is not following Mao's path? this stock is killing me
JD was $30 when this video was made. It's now $26 as i write this comment - down 14%. While so many other stocks have soared in the intervening period. Don't invest in China - you never know how Xi or the CCCP might intervene. Levy HUGE fines, 'disappear' CEO's, prop up the stock market etc. There are some truly great companies in China - fantastically profitable yet dirt cheap stocks. But I've lost sooo much money in China over the years - JD included - because Chinese markets don't have the Four Pillars necessary for a free market. And *_YOU DON'T EVEN GET TO OWN THE SHARES_* - just some bits of electronic paper from the Caymans. God forbid China invading Taiwan (then who knows....)....
One of the better analyses I've seen out there. Earned the sub!
I certainly agree, $JD and other 'high quality' Chinese companies carry a great deal of what I'll simply dub US-China relations risk (understatement lol). However, I believe 'most' of this risk is priced in at the moment. There's a reason a business like JD looks so cheap right now. 5 years ago, you'd pull the trigger in a heart beat if it was trading at these levels. The irony of investing is that you're often waiting for the 'perfect' time to buy, but when that moment comes, you either no longer want it (because of market sentiment) or it doesn't feel as good as you thought it would 😅. Be greedy when others are fearful - easier said than done.
Baba & JD valuation reminds me of the lost decade era.... Personally, i own them. they are cheap with any valuation metric used. but i understand if people fear investing in them. Good Luck & Thanks for the video
Hey Cameron . MCD is starting to head off the peaks .I would love to see their evaluation breakdown esp considering how much land they own . Also today's report about obesity in US makes me wonder how much of pivot company will have to make and if it is worth adding more margin of safety because of that. - Thanks for all work you are doing to educate people
Would you consider putting a margin of safety of sorts to account for country/political risk?
Thank you for your videos and your effort for them. Great job.
What do you think about REITs? Do you have any videos about let's say Realty Income?
I would like to also learn how to assess REITs.
A question... why didn't you use cash & cash equivalents in the excess cash ?
The 20 B matches only the short term investments... ?
I understand you don't feel comfortable owning Chinese equities, but given the risk/reward here it's hard not to invest and just limit your position size. Holding a 3% position size is not that large, it could grow to be 10% of your portfolio and I believe the downside (long term) risk from here is VERY VERY low. Their net debt alone would give you 50+% protection in they went out of business.
Bro it is far the best analysis I've ever on RUclips ..keep it up ❤❤
The $33 stock price you mentioned in the video is actually th ADR price witch account for 2 shares in the Hong Kong stock exchange. Shouldn't you consider this in your model? 🤔
The last decade of tailwinds to the China economy now leads to a decade of headwinds. Bad idea to fight big secular trends:
(1) Property bubble unwind
(2) Bank leverage unwind
(3) Diversion of GDP to military buildup
(4) Diversion of GDP to infrastructure failure (ongoing reckoning of tofu-drek construction)
(4) Lie flat generation - massive and growing unemployment in younger generations
(5) Manufacturing sector in decline due to competition from other Asian alternatives
(6) Unwind of globalization trend (US protection of bluewater routes unwinding)
(7) Conflicts with India and Taiwan inevitably adding to isolation drag
Decade of tailwinds is a little misleading when the Hang Seng Index is negative since 2010
@@footballfinanceguy I said nothing about the Hang Seng. I specifically said "tailwinds to the Chinese ECONOMY." Those tailwinds were created by a variety of factors including a massive credit bubble and a mountain of gov't incentives that drove unsustainable real estate expansion and endless 8%-10% GPD.
Thanks for the comment. I agree with you.
Don't all these risks apply to the US as well? I would only substitute tofu-construction with lack of construction.
As a student of china for the past 43 years and a value investor my sources have indicated that the chinese economy is in a seriously bad situation. Do some deep research into the country before buying.
My question is, how worse can it get? Once Chinese citizens realize the importance of owning more than just real estate, their stock market could sky rocket.
The Chinese citizens have absolutely no say in the decisions. I am sure the citizens in Ukraine wish their economy was stronger, who knows how long before things improve.
It can get a get a lot worse. Dig into it and you may see what I am seeing.
@@cicatrace That is not the issue. From my knowledge it is very much intended from the chinese government that the only real possible investment you can make is the housing market. Chinese citizens can't invest in foreign markets. Otherwise a lot of chinese money would flow out of the country. But then again this closed of system deters international investors from investing in chinese companies.
And obviously there are other big issues with this dictatorship.
@@joephysics5469 Realistically speaking, if it gets a lot worse, don't you think the Chinese gov will step in and ease monetary policy?
I am buying! I love love love the best country in the world!!
Good luck
Mbly ? Wat to do sell?
Thanks for this video! 😃
Great channel. Covering some great stocks.
Pls throw sobre light here, he said 9bi in debt and 20bi in cash, where do these numbers are coming from? Un GuruFocus, in seeing 46bi in total liabilities and 85bi in total assets (being 38bi and 35bi in current liabilities and current assets). Am I missing something?
What's the difference between not using EPS to value the DCF instead?
Lesson learned with BABA, country risk is huge in this one.
Bingo. No bueno lol
These are all great numbers, but I don't see a reason why the stock is cheap now. That has to be factored in. Some good points about the Chinese economy are mentioned in these comments.
What do you think of Centrica PLC?
great analysis! thanks for this
I just can't do it. I will not touch Chinese equities. I'll ride the waves with options and possible leaps, but outright owning the stock is nuts lol
I agree
What do you think of Funko Pop stock? Seriously
Hello sir can you talk about AliBaba stock please
Cameron, do you delete old videos for particular reasons? I went to go back and look at your take on a company I already owned when you covered them... And I can't find it. I'm assuming you took it private or deleted it. Am I crazy? Maybe you didn't make a video on them and I'm mixing it up...
I leave them up. Only deleted one. It’s was the one to one hundred video from Trulieve
"Stock prices converge to profit growth in the long run." Does this quote apply to Chinese stocks too? and why has JD's share price fallen the most compared to other Chinese stocks like BABA and PDD? How can we be sure that Xi is not following Mao's path? this stock is killing me
If the shares outstanding rise should you also take that in consideration for the shareprice in 10 years? Just a beginner question.
You need to have a share price prediction to make a per share price prediction. 👍
@@shawnstanley4784 indeed, everything else is a prediction, so you can also predict a rise based on historical data?
Very very very good analysis.
Great Work, Again. Thank you for sharing.
Thanks again!
Yes If it’s not fake numbers
BABA update?
It's time to buy! Big upside
Wow this guy is smart
hey, any chance for an Intel update?
Im buying all i can. See you on the other side.
Good luck
Not a fan of China and the geopolitical risks that come to holding ADRs. If you're comfortable with the risk then go for it. Me personally, I am out.
Can you do Baidu?
Genial, acabo de poner 10 % de mi portafolio a 25 USD por acción
In the last couple of months, Michael Burry has been buying shares in JD.
Great video:) can you do an analysis on Anta sports?
Country risk is way too high for this one
very high political risk, that is true.
I wonder what the hypothetical risk-adjusted return would be.
Baked into the price already.
And that's why you get an opportunity like this. There is no free lunch.
Hard to see all the risks here
high risk high reward !! billion people entering middle class shopaholic phase
400% or 400x is quite a difference lol
Are you saying that the stock 400 x'ed from 20 USD to it's high?
Is the 16.7% return wrong? That's not what I get when I punch it into a compound interest calculator
it's correct. Are you including the cash flows?
How do you calculate IRR? please share your calculation.@@CstewartCFA
MBUU next plz
This one aged well
The issue with any Chinese share is this: you dont own it. You own a derivative of the share. Very big difference.
Nice
JD was $30 when this video was made. It's now $26 as i write this comment - down 14%. While so many other stocks have soared in the intervening period. Don't invest in China - you never know how Xi or the CCCP might intervene. Levy HUGE fines, 'disappear' CEO's, prop up the stock market etc. There are some truly great companies in China - fantastically profitable yet dirt cheap stocks. But I've lost sooo much money in China over the years - JD included - because Chinese markets don't have the Four Pillars necessary for a free market. And *_YOU DON'T EVEN GET TO OWN THE SHARES_* - just some bits of electronic paper from the Caymans. God forbid China invading Taiwan (then who knows....)....
Wen mooon? 😂
Well hopefully you didn’t invest in it before today 😂
Typical value trap
Thank you for picking me, I've send you an email
I haven’t seen your email. Did you send it to cashflowinvestingpro@gmail.com ?
How can I stay 10 years if Trump winning could trash the ADR in a few months?