Everyone of course heard for last few decades that PRC is a big opportunity and than it was consistently validated by high GDP growth and other signs of fast development of the country.
At the same time there was/is a concern that PRC is not democratic and lacks western freedom.
I subscribed to the latter for a long time, assuming that no significant innovation can come from a society which lacks true democracy. Over the last few years I came to question this, partially because of Charlie Munger's appreciation to China progress, partially as I appreciated that different cultures might be, well, different. The latest trigger to rethink this came from Grzegorz Kołodko's book, 'Will China save the world?' It makes for a fairly balanced overview of current circumstances and path ahead China and the world.
I'm even more bullish on China after reading it and will try to spend some time on researching investment opportunities there.
What triggerred my somehow increased interest in China (and buying the book) was evalauating and finally buying into BYD. While I did not do enough research to fully understand company's situation and fundamentals to be fully comfortable, I think there are a few good reasons why it is a sound investment:
I intend to spend less time following stock news and do less 'incremental trading' from now on, to spend more time on a side project. Let's see how much I'll manage - investing is addictive.
At the same time there was/is a concern that PRC is not democratic and lacks western freedom.
I subscribed to the latter for a long time, assuming that no significant innovation can come from a society which lacks true democracy. Over the last few years I came to question this, partially because of Charlie Munger's appreciation to China progress, partially as I appreciated that different cultures might be, well, different. The latest trigger to rethink this came from Grzegorz Kołodko's book, 'Will China save the world?' It makes for a fairly balanced overview of current circumstances and path ahead China and the world.
I'm even more bullish on China after reading it and will try to spend some time on researching investment opportunities there.
What triggerred my somehow increased interest in China (and buying the book) was evalauating and finally buying into BYD. While I did not do enough research to fully understand company's situation and fundamentals to be fully comfortable, I think there are a few good reasons why it is a sound investment:
- It's clear that EVs are the future, especially in China, with pollution and government incentives
- Few (and certainly not Tesla) can match China in manufacturing prowess, with BYD being experienced player
- Based on some evidence (including Berkshire's early investment) BYD management seems to know what they are doing and have necessary integrity
- The runway and company's plans are ambitious, yet achievable
- Last but not least, the valuation seemed to get back to reality and be attractive again
I do not have enough confidence in my due dilligence for BYD to justify more than 1/5th of a single 'big five' position. Anyway, you have to start somewhere with China, and BYD seems quite reasonable place to start for me.
I intend to spend less time following stock news and do less 'incremental trading' from now on, to spend more time on a side project. Let's see how much I'll manage - investing is addictive.
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