New home sales is ~60% of China’s home transaction, according to sqft from official stat. (Source: 全年新建商品房销售面积97385万平方米。二手房交易网签面积71812万平方米)
In the US, in 2024, ~700k new home sales vs. 4mn existing home sales. New home sales is ~15% of US home transactions.
60% vs 15%
US existing home inventory is going up to a higher level and month to clear is expected to reach 4.4 month, a slightly higher number.
US new home price is down yoy, but volume was strong. Some explains that “less expensive homes are driving sales activity“.
Homebuilder’s sentiment is running at low levels, while builders reported the average price reduction unchanged from the previous month.
Netflix was out, Microsoft, Nvidia and Tesla are in.
When FAANG was first coined, it was 2013. Netflix provided significant return in that mobile Internet and cloud era.
ChatGPT was out in Nov 2022 and swept the world in 2023.
Netflix doesn’t touch hardware and AI.
Nvidia was neglected as it’s not close to consumers except for the gaming PC. Later people may know it as a crypto mining machine, but not the backbone of an entire era.
Tesla was neglected as people can easily live without an electric vehicle. Now it seems that autonomous driving will eventually serve many people and be deployed in more use cases in the form of robots.
Microsoft was neglected because it was mature and old? Not sexy.
Reading Buffet’s early investments in Union Street Railway in the 1950s.
Company’s business is not going well, and its stock is cheap – $30–$35 per share despite roughly $60 per share in cash and bonds.
Simply by distributing dividends, the company can give $50 per share to shareholders.
While the company being cheap is important, the management’s willingness to give shareholder return is even more crucial.
A distant $50 is different from a near-term $50; not to mention other ways to destroy equity value.
Oh btw, Union Street Railway also needed local regulator’s approval to distribute it seems – so ultimately it’s also up to the change of thoughts from regulators.
Why not bond risk premium?
Bonds typically have fixed payments but inflation is uncertain. One dollar 10 years from now is very hard to value.
Instead, you can trust credible companies more. They shall hold their position in the economy and take their fair share.
Isn’t that more “certain” in some way?
Thus, why we have equity risk premium.. there should bond risk premium over high quality companies.
In the first quarter of 2025, China’s renewable generated more 816 bn kWh, 816 gwh, about similar the consumption of households and the service sector combined.
Detective Conan IP generated less than 1500mn rmb revenue in a year, with film being the largest contribution (~50%).
PopMart’s Labubu generated over 3000mn rmb revenue last year, while most people don’t know Labubu’s stories, its origin, its value, etc.
UPS and FedEx reported revenue per piece/package is ~$13-$14 (1q25).
SF Express, the most premium express in China, reported ASP of 15.5 rmb in 2024 and ASP of 14.6 rmb in 1q25.
Other express delivery companies in China reported ASP of 2.3 rmb (YTO) and 2.05 rmb (STO and Yunda) in 2024.
Meanwhile, ZTO+YTO+STO+Yuanda+SF -> 330k package per day!
FedEx +UPS is ~40k package per day.
How much would you need to be paid to switch from iPhone to another smartphone?
For many people, that’s way higher than the $1,000 or so price tag.
iPhone just works.
It’s similar in stocks.
People don’t want to sell good stocks (thus ownership of good companies) even it’s a bit pricer.
They just work.
Why do you want to switch to another company?