I did not know what I was doing in term of investing rather than listening to others' opinions. I did not do my one-page investment summary. It was all about "trusting" the experts.?
The positive side of investing along with others' opinion passively is saving a significant amount of time for my homework. However, whenever there is anything happen to my holding, I tend to rely on others' answer on whether I should continue hold or sell it.?
The downside side is when shit happens, I cannot concentrate or even function as a normal human being. A typical behavior is checking my phone constantly to find out whether the stock is up or down. I hate it.?
So, I deleted all the stock apps on my phone and tried to update the stock information monthly. I started to do that when it was around February 2017. I learned it from a Chinese?book written by Xiaolai Li. I benefitted a lot from reading it. He shared his insight on a portfolio GATAFA, which stands for Google, Amazon, Tencent, Apple, Facebook, and Alibaba. He predicted these six giants company will dominate the internet for next decade.?
Luckily, the portfolio GATAFA was performing really well. But I am still the noob in investing. I did not follow the advice completely. I was thinking I can find a better one to replace Tencent, which is listing in HK stock exchange. Not until May 2017, I found out I can also invest in Tencent over-the-counter trust in US account.?
The one stock I was replacing with Tencent is no way near the potential of what Tencent can be in 5 years. Valeant Pharmaceuticals is the falling angle since 2016. The stock came from $250 ish down to $8.
This idea was actually coming from?chou fund annual report. In his analysis, he summarized into 4 bullet points:
Valeant can trade back to normal multiple if the amount of debt is significantly reduced from US$30 billion to a more comfortable level. (Management actually delivered the US$8 billion debt reduce by selling a non-core?asset)
Stable cash flow from good products, for example, B + L (博士倫）
Price to earning is misleading with US$30 billion debt. It is better to take consider the debt. After analyzing the debt situation, it is not as cheap as it appeared.
Free cash flow is close to US$2b (as of 2017/12/31)
This is what Peter Lynn called turnaround play. Chou's analysis was 100% right. The share was once more than double from the bottom. I am still holding this stock because I don't?think it is currently trading in a normal multiple. Debt level and new drug will be on my watch.
Facebook is the latest trouble stock in the portfolio because of the Cambridge Analytica issue. I am not sure how large the impact will do to Facebook in long term. I am still waiting for Mark Zuckerberg's announcement. I guess the public concern why their data are misused to support Trump. It seems to me that people are blaming the knife instead of the murder. I really don't know how this will turn out. I will stay tuned.?
Amazon is the most competitive company among 6 stocks from the?Peter Thiel interviewI saw from the weekend. (48:00) The host is asking the following question:
"Can anyone beat Amazon?"
Somewhere along the line, Peter stated the following:
"Amazon is not like Apple, Microsoft, Facebook, or Google. These companies have high margin in their core business. So, when they try to expand, they are only looking into the similar high margin business. But Amazon is core business which is really low margin. Every expansion alternative looks attractive to them. You don't want to compete with Amazon. "
In 2018, my investment plan is to monitor GATAFA closely so that I can rebalance my position.
