Earnings Review
As of October 29, 2022, the year-to-date return of the U.S. S&P index was -18.15% (the Nasdaq index was -29.04%), the Hong Kong Hang Seng Index was -36.48%, the CSI 300 Index was -28.32%, and The real return of the Time Portfolio was -39.2%, down 2.6 percentage points from last week, underperforming all indices.
Positions this week
This week’s investment summary
1) Position changes. Meta position from 10%→5%. In the past few years, I personally seldom made investment decisions because of a single quarterly poor financial report. Originally, any business is a fluctuating operation and cannot develop completely linearly. But this time I made a “conservative” decision ahead of the earnings report. First, because of the current market environment, there is a lot of pressure in my investment career; second, the performance of giants such as Google and Microsoft in this quarter has been surprising, and the probability of Meta being excluded is relatively small. Not much.
Sure enough, Meta plummeted by 25% after the financial report was released. Because I lightened up my positions in time, my losses were relatively much smaller. I read the earnings conference call carefully. In fact, Meta’s performance is relatively stable, with stable revenue, and the decline in profits is mainly due to a large increase in capital expenditures. Xiao Zha’s determination to invest scare investors.
Also, separate a few concerns about Meta. First, the current impact of TikTok on Meta has been revealed. According to the late report, TikTok’s revenue scale has not kept up with user growth quickly. The target for 2022 is US$12 billion. For Meta, which has an annual revenue of US$120 billion, it is still not enough for the time being. It is not a threat, but it is worth vigilance; second, the impact of iOS14 on Meta, from the perspective of YOY growth, has been fully digested; third, Meta repurchased $6.5 billion in the third quarter, which is quite a bit based on the current stock price. At 2.4% of the market value, if this rate is maintained, the annualized repurchase can reach 9.6%. Even if it does not increase, as long as you spend restraint, you can still achieve good investment returns. I choose to hold temporarily.
Changes in other positions are caused by the rise and fall of the stock price.
2) Reflect on your own bad math again. In 2021, I will lose 31.5% of my investment, and in 2022, I will lose 39.2% of my investment. Excuse me, how much will I lose in the two years combined? I always thought it was 31.5%+39.2%=70.7%…
The actual loss is 1-(1-0.315)×(1-0.392)=58.4%… Because I feel that I have not lost as much as 70%, 58.4% is more in line with my intuition.
3) Maotai is close to cutting in half from a high point. The price of Maotai at the highest point was 2,575 yuan, and it has now fallen to 1,360 yuan, a 47.2% retracement from the high point. Why pay attention to Maotai? Because I think Moutai is a representative company of value investment in China, I once mentioned in this article that Maotai has plummeted data and reasons over the years. In the history of Moutai, it rarely happened because of the company’s fundamentals, most of which happened. in the financial cycle.
Therefore, we can use Moutai as a reference for backtesting our own system. If I go all-in on Moutai at the high point in 2021, the current loss is as high as 47.2%, which is relatively better than my own 58.4%, but it is also a little bit better. not too much…
4) Let’s talk about the current Chinese concept. The market is too panicked right now… My strategy at this stage can be seen from the positions I hold. I only take a few companies that are most likely to get out of the crisis, and at the same time I have to keep enough cash to prepare for the worst.
At this stage, I will not buy the dips, because the position in China is already high enough, and I will not sell it, because the companies I hold are good enough.
5) What should I do if the stock falls and is uncomfortable? Once you realize that your mission is to value a business and buy its stock well below its value, you’ll be relieved. Greenblatt said: “If you can look at investing this simple and keep it that simple, then you’ll find the idea very appealing, and you’ll find other ideas stupid. In its impact Next, I put 99% of what people told me about how to see the world and the market behind me.”
Important statement: The stocks and opinions mentioned above are only personal records and are subject to change at any time, and do not constitute any investment advice. My investment ideal is to leave a 50-year investment record. I do not recommend stocks. It has nothing to do with me making money or losing money by copying homework.
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