Caveat Emptor

  Everybody has a plan until they get punched in the face As the china central government continued their spree of popping up regulations in all areas of China economy (Minimum wages, living conditions for drivers, 996 working hours, gaming time for minors, wealth redistribution policies, Banning dancing  grannies , the list goes on), the steep decline in the HK/CN stock prices seem to be consolidating and taking a slight breather for now. Although I have stuck to the plan of disciplined averaging down from July till now, it is never easy to watch your favorite picks go cheaper as new rules are being drafted. It is never easy to stick to your convictions based on the research and thesis of the stocks you hold, and believe you are right amidst the market noise and chaos. Everybody has a plan until they get hit. Then, like a rat, they stop in fear and freeze.You can plan all you want, but you’re going to get hit – probably when you don’t expect it - and it’s going to hurt.   No plan

  Record breaking crash in Hang Seng history As the mainstream news are focused on the groundbreaking Tokyo Olympics records set by the best athletes in the world, the financial news are focused on the fastest crash in Hang Seng history, which exceeded the records set by the S&P 500 crash last year. As financial markets are increasingly driven by algorithmic trading by institutional investors, I think the trend of rapid and harrowing losses is starting to be an expected trend and not a <6 sigma event> popularized by conventional quant finance. A lot of the narrative in social media / forums seems to be to avoid the Chinese market at all costs and there is lot of retail selling among the paper hands, which prompted me to deep dive throughout the weekend to discern the noise from the facts. Between the choice of averaging up on the most expensive market reaching its All time High in US history VS buying into the crash in the All time Low in HK history, the choice is apparent to

Thoughts about regulatory clampdown on Didi and the impact on China market HK stocks took another beat-down as the Chinese government took intricate measures to interfere with the raising of capital of China companies in US stock exchanges. The Chinese government took extreme steps to punish Didi from registering new users days after its US IPO under the guise of data protection, prompting a chilling effect to China companies, which withdrew their US IPO plans. What started as a nationalist initiative from Trump to delist China companies from US exchanges <Punish the Chinese from free loading on US capital markets>, was caught on by the Chinese government whom seek to take this further. By setting new regulation on the VIE structure, tweaking the disclosure requirements, and launching crackdowns on the largest Chinese companies, the Chinese government seems focused on legitimating its control over the tech giants, as it acknowledges their market presence on the economy. This move

100 Baggers by Chris Mayer I have completed the 100 baggers book by Chris Mayer. Personally, I am not too impressed by the insights provided by the book. The content seemed to be an amalgamation of the thoughts and quotes / best practices of the more esteemed value investors, with little original insight. I personally like the philosophy of the book to prepare the investor towards longer term holdings instead of churning the portfolio unnecessarily, but there are salient points that I think are logical fallacies and very dangerous for the amateur investor, and hard to implement even for full time investors. Nonetheless, I have shortlisted a number of professional investors that is attempting to implement this approach and I may segregate a portion of my <Mental-writeoff> portfolio to these stock ideas.  Problems with the Hundred Bagger approach 1) Huge survivor-ship bias and <Qualitative Back Testing> Due to the adaptive nature of the markets, I do not think that a commo

The Pied Piper of SPACs https://www.newyorker.com/magazine/2021/06/07/the-pied-piper-of-spacs| Characteristics of Operating managers / Investing managers to Avoid 1) Two-faced inconsistent communication style between trusted followers <Rebellious Teen> and social media <Social Justice Capitalism>. Hustler like personality and shameless self promotion   Particularly talented at manipulating the media, combining storytelling, narratives and buzzwords “Polarization gets you on CNBC, it gets you Twitter followers, it gets you a megaphone. If you believe that Chamath can get an hour on CNBC to explain Virgin Galactic, then you want to buy into this deal, because attention is money.” On CNBC, he adopted the calm and serious language of high finance. On podcasts, he waxed sincere, confessing (https://www.vox.com/podcasts/2019/3/4/18247010/chamath-palihapitiya-social-capital-happiness-identity-crisis-kara-swisher-teddy-schleifer-podcast)  that, by working with two therapists, he ha

  Big Mistakes – The Best investors and their worst Investments One of the best books I recently read about investing is from Michael Batnick, which writes in his blog https://theirrelevantinvestor.com/ .One common problem for investors is that they commonly fall into the authority bias, and hero worship <The Greats>, or any new upcoming charismatic personality that is been promoted on CNBC Twitter and Bloomberg, instead of vetting their long term performance or their flaws. I personally find the story of Bill Ackman particularly fascinating and will follow up with a separate post on his hits and misses. This book provides a good reminder that even the best investors are merely human and makes the same mistakes as any other, and the wise learn from other’s costly mistakes than to make one themselves. There is a great quote from this book which I take it to heart.   <The difference between the normal investors and the great investors, is that the normal ones are setback