My 2nd Tenbagger – The Tencent Story

Note: a “Tenbagger” is a stock having increased ten times of the initial value for an investor. The term was created by Peter Lynch, the most successful fund manager in the world.

My Prediction Comes True

Since the trade war between the US and China became inevitable, both Shanghai and Hong Kong stock market went down, so was the exchange rate of RMB. Many P2P platforms crashed. Hundreds and thousands of middle class people lost their life savings. Yet, this is just the beginning. China’s problem is far greater than this. Be prepared for worse, although it’s a bit late now.

The following is what I written on our web site: (valuebay.net)

Buy America & Avoid China
Sun, 02/28/2016 - 12:18 — William Dai

The Good News is the Bad News

The most recent news in financial world is “Warren Buffett's Berkshire Hathaway had $111 billion of cash on its balance sheet at the end of last quarter, the most in the company's history.” This also implies that almost all investors using Warren Buffett’s way of investment have made lots of money in the past few years.

Is iRobot A Good Investment?

I bought iRobot at $30s and sold about half of the shares hold at over $100. I regret that I failed to sell them all. Even after iRobot's dropping about 40% from the top, I am still hesitating whether to go back into the game with more investment because I am not sure whether the company can defend their leading position in the long term. It seems that many companies can make a robotic vacuum cleaner now.

Here is an excerpt from a brilliant article that Warren Buffett penned in Fortune in November 1999, "Mr. Buffett on the Stock Market:

Seven insights from legendary investor Warren Buffett

Warren Buffett is one of the world's greatest investors and business leaders. Over the years the man who famously made today's equivalent of over $50,000 as a teenager has uttered some pretty prophetic statements.

1. "It is not necessary to do extraordinary things to get extraordinary results."
Buffett suggests that the best successes in the workplace can come from those who are consistent. Flashy ideas and grandiose plans only take you so far. In the end, the results speak for themselves.

Human Weakness in Investment – Herd behaver

We almost cannot live without the Internet now. If you are not too young, you must remember the dot-com bubble in 1995–2001. Over the period, investors were crazy about companies in the Internet business and were ready to buy these companies at any prices. On the other hand, companies could cause their stock prices to increase by simply adding an “e-” prefix to their name or a “.com” suffix, which one author called “prefix investing”. By the end of the 1990s, the NASDAQ hit a price-to-earnings (P/E) ratio of 200.

Human weakness in investment –incapable of self-reflection

There is a saying that “love is blind”. This means a person in love would not be able to see any imperfection in the lover. This is maybe an extreme case. However, people do have the tendency of refusing to change their position when the relevant situation having been changed, or have bias on anything against whatever they initially believed in.

For example, a boy was brought to the same church by his parents frequently, he would not only mostly likely believe in the same religion when he grows up, but also strongly reject any other religion or atheism.

Buy America & Avoid China

There will be an inevitable crash in the Chinese economy. China to exceed America in economic power under current totalitarian communist regime will only happen in the dream of ignorant people. I totally agree with Mr. Buffett that “America’s economic magic remains alive and well." Buy America. Avoid China.

The following is another chance to learn from Mr. Buffett.

Warren Buffett’s annual letter is out-- 7 things that will have everyone talking

Yahoo Finance
By Nicole Sinclair

Warren Buffett's Advices

INVESTING

Don’t be too fixated on daily moves in the stock market: "Games are won by players who focus on the playing field -- not by those whose eyes are glued to the scoreboard. If you can enjoy Saturdays and Sundays without looking at stock prices, give it a try on weekdays." (from letter published in 2014)

Don’t get excited about your investment gains when the market is climbing: “There’s no reason to do handsprings over 1995’s gains. This was a year in which any fool could make a bundle in the stock market. And we did.” (1996)

Clear and Present Risk in China

There is a clear and present risk in China economy. Maintains of debt are always the last stage of any economic crisis, if we have ever learnt anything from history. Look into the details at the following link.

http://www.ft.com/cms/s/0/e13e2cf8-6e48-11e4-bffb-00144feabdc0.html#axzz...

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