Solar, Baijiu, and Banks

From 2021 to today,

Solar in aggregate went from 3 trillion rmb to 2 trillion rmb;

Baijiu in aggregate went from 5.4 trillion rmb to 2.4 trillion rmb.

These two sectors along lost 4 trillion rmb in market cap.

Guess who gained?

Banks in aggregate went from 10 trillion rmb to 14 trillion rmb in market cap, gaining 4 trillion rmb in about 4.5 years.

Solar and Baijiu are more private companies.

Banks are more SOEs.

Solar is a representation of how involution destroyed value;

Baijiu is a representation of how declined consumption/macro pressured stocks.

Value trap and being contrarian

Consensus can be right for a long time — ride it while reflexivity is reinforcing it, but be ready to turn contrarian near the inflection point.

It is not “always go against consensus.”

George Soros says the crowd is right 80% of the time.

“Most of the time I am a trend follower … Only at an inflection point are we rewarded.”

His key idea is reflexivity: market prices are shaped by investor bias, and those prices can then affect fundamentals, creating boom-bust loops. So the contrarian opportunity is when the market’s “prevailing bias” has gone too far and starts to reverse.

Being contrarian for most of the time is dangerous.


Being contrarian in investing for too long can be dangerous.

On the upward trend, if you are against the trend and short the stocks, Tiger Mgmt is a case in point – Tiger Management, run by Julian Robertson, effectively shut down in March 2000, right as the dot-com bubble was peaking.

Robertson was acting like a classic contrarian:

  • “These internet stocks are absurdly overvalued.”
  • “Eventually fundamentals will matter.”

Both statements were true.

But Soros would likely argue that Robertson fought the trend too early. A reflexive bubble can become much larger than valuation alone would justify.

On the downward trend, if you are against the trend and long the stocks, there is a term called “value trap”.

Sometimes the crowd is right: the business is structurally deteriorating, ROIC is falling, or the terminal value is lower than historical multiples suggest.


For value traps, the key question is not “is it cheap?” but:

What changes the prevailing trend?


In the case of investing and cigar butt investing like what Warren Buffett did in his early days, he bought near/below liquidation value.

In addition, he had an exit path.

Cigar-butt investing often worked through liquidation, tender offers, buybacks, asset sales, control pressure, or mean reversion. It was not “this bad business will become great.”

So Buffett avoided value trap with asset/liquidation value protection + catalyst/control.


That is even harder in China, as there is little space for an activist in China investing.

置身钉内?

一个方向看似正确的 AI 办公产品,如何在组织目标、商业压力、产品基因和真实用户需求的拉扯中走偏?

ONE 想做“让事找人”的 AI 工作入口,但最终被做成了“让组织更容易看见、追踪、管控人”的工具;它失败的关键不在 AI 技术本身,而在产品定位、组织机制和用户立场错了。

核心观点:
// 产品发心过载
ONE 同时想服务用户、证明钉钉 AI 化、承载无招回归后的战略战役、消化商业化和集团指标。目标太多,导致产品无法保持一个清晰主线。

// To B 的根本矛盾没有解开
钉钉的付费方是老板/管理者,真实高频使用者却是员工。老板要“可控、可视、确定性”,员工要“边界、缓冲、自由度”。ONE 试图同时满足两边,最后实际更偏向管理者。

// AI 放大了钉钉原有的强管控基因
钉钉早期成功依赖“已读未读、强触达、组织确定性”。ONE 把这些能力 AI 化后,用户感受到的不是效率提升,而是更细颗粒度的监控。

// 用户真实反馈被误判
内测和大客户灰度阶段,管理层反馈很好,但基层员工强烈抵触。团队一度把这种抵触理解成“不适应新工具”,而不是产品方向本身有问题,这是文章认为最致命的误判。

// “信息收敛”变成了“信息轰炸”
ONE 原本想用卡片减少消息混乱,但各业务线都往 ONE 接入内容,最后变成“原有钉钉消息 + ONE 卡片”的双重轰炸。

// 发布会倒排工期摧毁了敏捷迭代
项目不是从 MVP、小范围验证、真实数据纠偏开始,而是围绕固定发布会日期高举高打。负面数据出现后,也没有真正修正顶层定位。

// 组织结构让问题被持续放大
产品、设计、研发、商业化、各业务线之间权责不清;业务线为了 AI 指标纷纷接入;一线用户反馈向上传递时被淡化,最终形成“上层看到正反馈,一线承受真实反噬”的断层。

// 它也并非毫无价值
文章承认 ONE 的方向踩中了办公 AI 的趋势:主动式信息流、AI 进入工作流、基于组织上下文做服务,这些都可能是未来方向。失败的是落地方式和用户立场。


无独有偶,硅谷也在反复证明同一个结论:当企业试图用数据和 AI 把人的工作过程彻底量化,最后得到的往往不是效率,而是反感、抵触和讽刺性的“表演生产力”。

Microsoft 的 Productivity Score 是一个很典型的例子。它原本想帮企业理解员工如何使用 Microsoft 365、Teams、Outlook 等工具,提高组织协作效率。但因为它能暴露个人层面的使用数据,很快被外界批评为“员工监控工具”。最后微软不得不调整产品,弱化个人级别可识别数据,改成更聚合的组织洞察。这个案例说明了一件事:员工并不是天然反对效率工具,但他们不接受被这样管理。

Amazon 内部统计 AI 使用量的做法也很讽刺。公司想推动员工使用 AI,于是开始看谁用得多、谁 token 消耗高、谁更积极拥抱新工具。但指标一旦被看见,就会被表演。有人开始为了显得自己更 AI-native 而刷 token、制造调用量。最后据报道,Amazon 撤掉了内部 AI 使用排行榜。企业以为自己在衡量生产力,实际衡量到的是员工表演生产力的能力。

Meta 的鼠标和键盘追踪则更直接。据报道,Meta 的内部项目会在员工工作电脑上记录鼠标移动、点击、键盘操作,甚至偶尔截图,用来训练 AI agent 理解真实办公行为。员工反应很强烈:内部帖子的高赞评论是“这让我非常不舒服,怎么退出?”;公告下最常见反应是愤怒表情。Meta 最初明确表示工作电脑无法 opt out,后来在压力下只开放了非常有限的临时暂停机制。它没有真正取消,但已经暴露出一个事实:当公司把员工的工作过程本身变成训练数据,员工首先感受到的不是效率,而是被采集、被观察、被占有。

这些案例和《置身钉内》里的钉钉 ONE 放在一起看,重点就很清楚了:这套逻辑正在失败。

钉钉 ONE 看见了未读、待办、遗漏和事项流转,却没看见员工需要缓冲和边界。

Microsoft 看见了工具使用行为,却撞上了隐私反弹。

Amazon 看见了 AI 使用量,却催生了刷指标。

Meta 想看见鼠标和键盘背后的工作过程,却激起了员工对数据采集的愤怒。

它们共同说明:工作不是越透明越高效,人也不是越可测量越好管理。一旦企业把“过程数据”误当成“真实贡献”,员工就会开始保护自己:要么关闭入口,要么消极抵抗,要么表演指标,要么彻底不信任系统。

所以,钉钉 ONE 的教训并不孤立。它只是更完整地呈现了一个趋势的终局:当 AI 办公产品从“帮人工作”滑向“帮组织看人”,失败几乎是迟早的事。

隐私不是效率的敌人,自由也不是管理的漏洞。很多时候,它们恰恰是一个工具能否被长期信任、长期使用的前提。

The unusual inflow

In recent 2 weeks, US stocks especially tech/QQQ went straight up, before the AVGO disappointing earnings.

There is an unusual capital inflow that accelerated.

It’s not just FOMO after fabulous run in April and May.

China’s recent crackdown also played an role – as Chinese investors investing overseas fear that they can’t add/buy for the next two years, they rushed to buy a lot!

And they are more likely to chase high beta stocks, leveraged ETFs.

That’s a problem in the short run.

And a correction should normalize this.

These investors can still sell according to rules; they can also buy/add when being abroad.

The end of a cycle of liquidity for Chinese ADR and overseas listed companies

Investors rediscovered China mostly after the policy shift in Sep 2024.

However the ADRs and overseas listed companies still sold off in the subsequent month and the “924” effect nearly reversed.

The second wave of enthusiasm came with the famous “DeepSeek moment” in Feb 2025.

However, the entire world including Chinese ADR and overseas listed companies sold off with Trump’s liberation day in Apr 2025.

The current cycle is the third one and it plays out longer.

While the previous two cycles are fundament driven (policy and tech), the third cycle is a liquidity one I believe.

The most obvious sign is the near zero HIBOR (HK over night interest rate), starting in May 2026.

Meanwhile, there are various short-form videos, social media posts and anecdotes about mainland Chinese people go to HK to open bank accounts and brokerage accounts.

The troubling sign emerged probably when IBKR rejected mainland Chinese to open accounts in Oct 2025.

The Chinese ADRs and overseas listed companies peaked about that time with subsequent AI bubble worries etc.

As the stocks had risen for quite a few months and are at quite elevated levels, it also took time for it to come down.

Iran war accelerated this.

And the Futu/Tiger/LongBridge news in May 2026 marks the end of the cycle.

While it can take some time for remaining selldown to happen, it seems still manageable and valuation is not demanding.

Chinese AI may be good at agentic tasks, but…

In 2024, OpenAI talked about five levels of AI.

  1. Chatbot/Conversational AI
  2. Reasoners
  3. Agents
  4. Innovators
  5. Organizations

We are at level 3.

Chinese AI could be good or superb in the second and third level.

Chinese people are good at solving problems (think about exams) and doing tasks (think about how efficient Chinese workers can be at repetitive work ).

However, if Chinese AI needs to at level 4 and 5, and if it’s truly “Chinese”, then Chinese people need to evolve.

True innovation is scarce in China. Chinese society currently doesn’t reward true innovation. It’s like “solving news problems with new ways”. That is not the natural motivation. Chinese AI may stuck at level 3 if we don’t do innovation right.

It’s another problem at level 5. Most Chinese people don’t know how to organize themselves.

So it’s hard for me to see how Chinese AI can do this right either.

They may struggle for a while.

Or they might become a different animal.

The 5-year cycle in China investing

Every five years, China will have a new Politburo Standing Committee.

There are 7 members now, which are considered the most politically powerful people in China.

Not all members are new, some can stay for 2-3 term.

But the fight for becoming a new standing committee member can be quite intense.

There can be ripple effects across other areas in China.

Stock market can be quite sensitive to unknowns and turbulence.

To avoid uncertainties, it’s wise to stay away from it.

To compensate for staying on the sideline for about one year, the previous year can be quite a good year.

That seems to the case for the last 2 terms – 2017 and 2022 were the year of new committee selection. The “fight” could start in 2016 and 2021. Thus the “good” years were 2015 and 2020.

The next term is 2027. The “fight” could start in 2026 and 2025 was the good year. That seems to be the case so far.

 

How high can ads ARPU go?

Bilibili, a younger Chinese user focused video website generates advertising revenue at about 7.5 rmb per DAU per month, slightly above $1 ARPU per month.

That is less than half of Kuaishou, which is above 16.5 rmb per DAU per month, or about $2.4 ARPU per month.

Kuaishou’s DAU size is near 4x Bilibili, so ads revenue is nearly 8x larger.

But these are nothing compare with Meta, which commands about $30-$40 ARPU per month in North America.

So Kuaishou is only like 1/10.

Douyin is the highest in China.

Using $50bn pure ads in China and 800mn DAU gives about $5 ARPU per month.

On top of that there are e-commerce, local services, payments, live-streaming etc. so overall Douyin app ARPU is a lot higher than pure ads.

Just comparing ads revenue: Douyin DAU 3-3.5x Meta NA but ads ARPU is 15% of Meta, which will give you about 50% of Meta NA ads rev of ~$100bn.

Japan before Meiji vs Qing Dynasty

Japan before Meiji vs Qing Dynasty have many similarities:

1/ both are agrarian based economy that is not industrialized as western peers at the time

2/ both faced challenges and threats from the west. Qing has the Opium Wars from the 1840s; Japan encountered Perry’s Black Ships in 1853–1854.

3/ both had a structured military class – Qing with 八旗 and Japan with samurai. Both had become partly hereditary status groups living on state stipends. Many were no longer effective soldiers.

The Meiji Restoration 明治维新 and 百日维新 Wuxu Reform / The Hundred Days Reform are similar and usually compared together.

The results are vastly different though.

Why?

Shogunate is politically easy to target. Reformers can support the Emperor Meji. Meji and Tokugawa are separate.

However, Guangxu, the Qing Emperor had “invisible enemies” inside – Cixi or other Manchu noble.

The political situation difference had another profound impact – the support of armies.

Meji had key army support from Satsuma 萨摩, Chōshū 长洲 which are clearly anti-shogunate.

Guangxu didn’t have army. Guangxu had Kang Youwei who had ideas but no real power.

Military forces at that time were still loyal to the Qing court on the surface. Whether it’s 袁世凯 or 湘军/曾国藩 or 八旗, no one is clearly anti-Cixi. People could be dissatisfied but Cixi was still the powerful core of Qing court.

Yuan was likely the most possible choice for Guangxu back then, but Yuan chose not the take the risk / help a coup etc.

Yuan Shikai 袁世凯 did not have a clean, rightful banner to be openly anti-Cixi.

Excerpt from 万古江河

明祚二百余年,其实不能与汉唐泱泱大国之风相提并论。其中缘故,可能由于开国之初,太祖立“皇明祖训”,严嘱子孙不得轻易改变他订立的典章制度。固然后世皇帝破坏“祖训”之处不少,这一保守的基调是一锤定音,以致明代政治,难有改革。

明太祖废宰相,皇权定于⼀尊,于是⽂官与皇帝之间,无复汉代与宋代可见的制衡。绝对的皇权,保护了保守主义,以致质疑当时制度的思想,都难逃政治权力的压制。皇帝自己不能行使权力时,绝对的权力落在近侍、宦官手中。于是有明一代,自仁宣以后,宦寺鱼肉文官与儒生的事迹,不绝于史书。明代宦官专权,擅作威福,其灾害不在贪污败坏,更在于斫丧了文化与思想的元气。

明代中叶以后,知识分子及社会大众都对上述令人窒息的压抑之气,兴起各方面的反弹。那些史事,将有专节论述,此处不赘。反弹的力量与压制的绝对权力之间,有各种冲突。中国的人才,以及社会的文化活力,都在这一长达百年的斗争中,消耗殆尽!后果是明末的中国,不再有余力面对正在开展的世界新局。能察觉这一变局的人已经太少,更论思考如何适应这一即将叩关的世界形势!

闭关锁国 and 落后 backwardness is a result of A) first emperor’s 皇明祖训 which forbids revolution, B) a lack of a balancing of power, C) pushbacks and crackdowns destroy resources and productivity to move forward.