Chill and Read

The markets have been on an uptrend for the past couple of days and weeks, with dips near the end of Nov 2020.

Basically, I am collecting my thoughts, collecting dividend, and just reading books. I try not to spend too much time on social media, and spend more time with the kids.

Portfolio

I am not that into momentum trading. Basically I am wondering would I have sufficient war-chest if the next correction occurs.

I have contributed to my CPF accounts and have subscribed to the preferential offers from Ascendas Reit (recently) and Mapletree Logistics Trust (earlier in Nov and was allocated what I applied for). In gist, I did not invest for this month except for the preferential offers.

I recently watched the below video clip of an interview with Seth Klarman.

In it, he talked about the gyration of stock market prices (you can fast forward to 6.14min). Although he does not like bad times, but he mentioned that his fund benefits from volatility and his company provides liquidity when people want to sell things in a hurry. He also mentioned that it is frustrating when the markets keep going up and up, and he worries because, just at this time, the ‘little guy’ get sucked in. The ‘little guy’ finds it irresistible, get lured in by stories from his neighbours or friends of how much money they made in the markets.

He further added that buying is easier then selling. There is no timing element… one can never get the right price. A lot of stocks are cheap for a reason, and a value investor will find out of the reason.

Earlier in the video (at 2.50min) he talked about the need to balance between arrogance and humility. When we buy anything, it is an arrogant act, eg. you are buying because you think you know more than everyone else who are selling (or at least the seller). However, you need to have the humility to say that you might be wrong.

Well, currently, my state of mind is probably at the point of trying not to be lured in. I think that (to not buy) is as important as buying when everyone is fearful, and fearing that the market will keep going down cause we will never know. To me, right now is probably not the right time to be arrogant, cause a lot of people want to get in so as not to miss out.

Things are starting to look go in the economic side, we have news of workable vaccines, and 2021 is starting to look much better already (compared to 2020).

Books

I will be taking leave from my work sometime in Dec 2020.

I recently read finish the book “Jack Ma: Dancing to the Top”, and have two books lined up for the coming weeks:

– Ma Huateng and Tencent: A Biography of One of China’s Greatest Entrepreneurs: A Business and Life Biography

– Tim Cook: The Genius Who Took Apple to the Next Level

It is amazing how Jack Ma took Alibaba from infancy all the way to what it is today, which is an ‘eco-system’ consisting of:

– Taobao, Tmall,

– And at one time having a stand alone group buying site (Juhuasuan),

– Branching into logistic – Cainiao (with the alliance with logistic suppliers and express deliveries companies),

– Finance – Alipay (getting a banking license ad teaming up with a fund management company, and transferring large deposits back to banks to get better interest for the benefits of customers), Yu’ebao (which evolved the uneasiness in many Chinese banks),

– Big data and Cloud computing – Aliyun

– And even investing in a football club.

Most of these are a result of his quest to obtain more data, analysing those data and creating a stronger ecosystem, with each part supporting one another and with the focus on customer’s experience at the core. It is also perhaps a natural progression from e-commerce. For instance logistic / express delivery and e-commerce will always be intertwined and Alipay arised from the need to retain customers’ payment prior to receiving the goods.

It also talked about why Alibaba was first listed in the US and not HK or Shanghai (‘Partnership system’ with Softbank, having major foreign shareholders, and the company being domiciled in the Cayman Islands).

At this age of mobile/social e-commerce, I wondered would Tencent/Pinduoduo be able to penetrate into the group buying, if not for the failure of Alibaba’s Juhuasuan (mismanagement, with the employees profiting from merchants, and consequently, the head of Juhuasuan was removed). There is an obvious reason why Pinduoduo developed a new in-house shipping information technology, freeing it from its dependence on Alibaba’s Cainiao.

E-commerce upstart Pinduoduo wants its data back from Alibaba (read here)

Of the big three tech firms in China (Alibaba – e-commerce, cloud computing, finance / Tencent – gaming, Wechat / Baidu – Search), Alibaba probably view Tencent more as a threat.

I seriously doubt any bank can compete with Alibaba (or Ant Financial for this matter), with data at its core.

Have you noticed the new advertisement on TV by Standard Chartered, titled “Supply Chain”. I reckon banks are starting to take the matter of recording and analysing the supply chain from consumers to manufacturers seriously (using data). However, they are miles away from the data eco-system developed within the big techs.

Nevertheless, the herculean task undertaken by Alibaba will not be easy, even though they have first mover advantage. Many small players and complex regulatory restrictions…

That’s all for me for now.

Signing out.

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