Guy Spier on AliBaba & Tencent

i've learned that analysis is not just what appears on the balance sheet and income statement although you should certainly be able to do that and look at it well but you know and this is this is this may be the most valuable thing i tell everybody here you know based on what i know about this person based on what i all of the history i know about them based on what i know about their financial circumstances they just made xyz move in charlie munger's case bought a ton of alibaba and what i see in china now just staggers staggers me there are factories in china that are just absolutely full of robots and are working beautifully they're no longer using peasant girls to beat the brains out of our little shoe companies in america what does that tell me about the world how does that update my evaluation of the probabilities that something will be true or false so i had to get to the realization that i'm never going to know everything first hand i have to make those inferences i have to study people like charlie munger but also study people like carl icahn and then when i see them make a move try and understand why most of the time i won't but every now and then it will update my probabilities in such a way that i have an insight which will enable me to do something so back to charlie mungo so that's some information on costco charlie munger also had an investment in a company called posco and it was a kind of like the rationale was not dissimilar to uh costco this kind of low-cost operator as nick sleep would say scale economy shared it did not work out and posco which is the leading steel producer in korea is an interesting business but it has not delivered the kinds of shareholder returns that those of us who went into it were expecting so now we go to alibaba i think that the company as best i can understand has reached a degree of centrality in the chinese economy and in the global economy that as china grows in spite of everything all the other noise that is going on it is extremely likely to be lifted and in spite of not not having jack ma at the helm anymore and i it seems to me that that's the kind of analysis that charlie munger has done so it's in this unusual place of being part of the uh retail infrastructure of um china and of the world while at the same time having some really really good economics going on around it so one of the big inferences that i made so so here's a so so um i happen to be aware that some people were selling alibaba and buying other companies and charlie munger was encouraging them and agreeing with them that that was a smart move and then i discovered three or four months ago whenever it was that he's been buying alibaba while he's been encouraging other people to buy something else which was really really interesting to me so the other sort of like sort of like blockbuster company in china 10 cent going back to my earlier point about kind of analyzing stakeholders and doing real sustainability analysis i have a huge problem with gaming companies because i think that many of those games are rotting the minds of our young people it's interesting to me that the chinese communist party decided to ban uh children from playing more than one hour a week and so for me uh gaming companies may be the new tobacco and i think that that's part of the reason why he was not interested in 10 cent last piece of the analysis i happen to know and this is a kind of inference you know he's got a huge investment with lilu lilu has got extraordinarily good understanding of china lilu is this chinese and very very genius investor who was at the tiananmen square demonstrations he was one of the protesters for a certain period of time he was a persona non grata in china and so i that leads me to believe that charlie munger has a deep understanding of um the place of alibaba not just in chinese business but the way the communist party sees alibaba i also bought some alibaba what i did was i sized the position right for uh i sized it well below what would have been right for me i think often the answer when you're investing in public markets is position sizing you're very lucky you can go especially if you're on a small fund in many many of the businesses that are out there you can go as large or as small as you like the last thing that almost keeps me up at night is the fact that china is a huge human rights abuser there's no question about that and i struggle with that at the same time i try to [Music] what i tell myself is that so long as i think that the good that the chinese communist party has done by lifting so many people out of poverty it's a something that has never happened in history before uh gives them some leeway and we have to hope and pray that at some point they become more respectful of the minorities that live in their borders the we girls tibetans and others that's my thinking about charlie munger and alibaba

Channel: Neil Denize

Views: 25,765

Keywords: tencent stock news, china tech, is tencent a buy, is tencent a good buy, value investing, prosus stock, tencent stock review, guy speir tencent, guy speir prosus, guy speir buys prosus, guy spier, guy spier interview, Guy Spier on AliBaba & Tencent, Guys spier latest interview, aquamarine capital, guy spier tencent, guy spier value investor, guy spier book, charlie munger, charlie munger china, super investor

Id: 4h3zUCe8lA4

Length: 5min 30sec (330 seconds)

Published: Fri Apr 08 2022