How to judge the company’s valuation is expensive

Q: Will traditional auto companies do new energy sources, but will they fail to build new powers?
A: It may not be too good. Look at who is the number one sales of new energy vehicles.

Q: How do you see the business model of the airport?
A: Think of it as a bond. The valuation is low enough and the dividend is high enough, which is a good investment.

Q: What is your opinion on Zijin Mining’s corporate governance and corporate culture or business model?
A: This is a magical company. Its earliest deposit, Zijinshan Gold Mine, was identified as a poor mine during exploration and was not required by the state, so it was the county’s turn to develop it.

Later, they succeeded in technological innovation, and they just smelt gold from poor mines. Of course, this technological innovation also has certain risks. One of the consequences is that it poisons many fish in the river.

But the magic of this company is not here. It went on the market in Hong Kong as early as possible. After financing, it began to buy mineral resources everywhere, got rid of its dependence on primary minerals, and became one of the world’s largest mining companies in one fell swoop. At this time, it coincided with the global metal bull market around 2007. Davis doubled its performance. For many years, it grew at a rate of 100% year-on-year, scaring individuals.

Why can a company succeed in technological innovation and financial leverage twice? Why do entrepreneurs in the countryside of Shanghang County have an industrial height and a global vision? This is really unknown. Mining companies tend to give people the impression of “resource-dependent” upstarts, but Zijin Mining is not like that. It turns waste into treasure through technological innovation, and upgrades resource advantages to industrial advantages through financial markets. Every step is entrepreneurial. Manifestation.

Q: Why does Amazon’s e-commerce business seem to face much less competitive pressure than Alibaba?
A: Basically, in any industry, Chinese companies face the most competitive pressure. Chinese people are too diligent and motivated. This competitive pressure is not a bad thing. It has spawned a large number of outstanding Chinese companies and greatly improved the experience of Chinese consumers.

Q: What is the main difference between Tencent and Facebook?
A: Tencent has stronger control over users than Facebook. Facebook has a group of users with the strongest payment capabilities in the world (the United States, Canada, Europe, Japan, and Australia). Tencent’s business system is deeper and more three-dimensional than Facebook. This may mean that Facebook’s commercialization potential is still great.

Q: What do you think of electric vertical take-off and landing aircraft? Will it become the mainstream form of transportation in the future?
A: When I was a child , I watched “PHS Roaming the Future”, and most of the predictions in it were fulfilled, even far beyond the predictions. But there is one of the most popular prophecies “Floating car” has not been realized at all. This must be justified.

Q: Why does the same fund manager keep issuing new funds for public funds?
A: At the strong request of the majority of investors… the new fund is cheap, one for 1 yuan.

Q: The high housing prices in Shenzhen seem to be the key reason for the lack of supply, so why can’t Shenzhen increase its supply?
A: I don’t know about this. But I can tell the story of another place, that is, Hong Kong, which is separated by a river from Shenzhen, restricted land supply from 1984 to 1997, and housing prices continued to rise until everyone thought it was unreasonable. In 1997, the newly appointed Chief Executive believed that this unreasonableness must be corrected, the supply increased, and a huge public housing plan and a plan to increase land supply must be launched. House prices fell in response. As a result, the government found that the consequences of falling housing prices were much more serious than expensive (unreasonable) housing prices, so the plan to increase supply was aborted.

Q: In 2021, where is China in the Kangbo cycle?
A: A prosperous age not seen in three thousand years.

Q: Why is the number of newborns in China declining year by year?
A: For any group, the fertility rate will drop as the education level improves and economic conditions improve. This is a normal social phenomenon. Childbirth is closer to human instinct. From the perspective of a rational economic man, many people would think it is uneconomical.

I observe that this is close to the smiling curve—that is, the group with the lowest economic status, education level, and the group with the best economic status are more willing to bear children, and the middle class has the weakest willingness to bear children.

The best economic situation is why the willingness to have children can be restored because their financial situation allows them to solve most of the troubles in childbirth through employment.

Q: Do you think China Merchants Bank will become a real fintech company, and it will be valued according to Internet companies such as Ant Financial?
A: I don’t know what a “financial technology company” is. A bank is a bank. A good bank can make a lot of money. That’s enough. As for what others will use to evaluate, it’s someone else’s business, and I don’t care at all. . Any company will use “technology”, there is really no need to emphasize that you are “technology”.

Q: Which of the three tracks of medical aesthetics, new energy vehicles, and photovoltaics do you prefer?
A: I never watch the track, I only look at specific companies.

Q: Would you consider buying a “cigarette butt” company with a short life span (within 5 to 7 years) but with a cash flow that may be 3 to 4 times the market value?
A: I most hope to buy a company with a life cycle of only one day (to close and liquidate tomorrow) and a cash flow of 3 to 4 times the market value. Tell me which one you have.

Q: In the face of a bull market, when should one consider lightening up or taking profit?
A: I don’t know. I never stop profit. If I don’t like the stock, I sell it. Sometimes I don’t like it when it rises, and sometimes I don’t like it when it falls.

Q: For the newly listed excellent Internet companies, such as Kuaishou, would you buy it?
A: Don’t buy it now, let the bullet fly for a while…

Q: What exactly is freedom? How to pursue it?
A: Freedom is a space where ability is greater than desire. The pursuit of freedom is simple, expand one’s abilities and manage one’s desires.

Q: Is it a good strategy to buy rivals from great companies?
A: A prerequisite for doing things well is to try not to make things complicated. In business, the “rivals” of most companies are themselves, and have nothing to do with other companies. The same is true in investment.

Q: How to judge whether the company’s valuation is expensive or cheap? What do you think of the current share prices of Pinduoduo, Tencent, Meituan and Alibaba?
A: Not cheap. If a company cannot earn the money corresponding to this “valuation” for the entire operating period, I will consider it expensive.

Q: Have you ever decided to buy or sell a company due to an instant “epiphany”?
A: There are good examples of this. For example, I have owned Tesla for a while, and I have also made some money. But there are always some questions that I don’t understand. In order to understand these problems, I also bought two Teslas and drove more than 100,000 kilometers to feel and experience.

Then one day when I was driving a Tesla, I suddenly realized that Tesla was not my ideal investment target. Later, Tesla’s stock price disappeared. This matter became a long-lasting joke on Snowball…