Tag: Investing

Stopping disclosure is a sure pressure in near term

Tencent Music $TME will no longer report the operating metrics on a quarterly basis such as Monthly Active Users (MAU) for online music services and Number of Paying Users for online music, starting from next quarter.

The stock dropped 24.65% in a day, with other concerns like more competition from ByteDance’s Soda Music.

It’s almost a sure thing that stopping disclosure on key operating metrics will make stock price under pressure.

A very similar case is Netflix in 2024.

In April 2024, Netflix announced it would stop reporting quarterly membership numbers and Average Revenue per Member (ARM) starting in 2025.

Netflix shares fell ~8% the day after the Q1 2024 report.

Here is the last report on these operating metrics.

 

The company argued that subscriber count is no longer the best indicator of health due to new revenue streams like advertising and “extra member” fees.

Netflix still discusses those in shareholder letters and gives financial guidance, like this for 4q25 earnings.

While $TME gave similar explanations, it didn’t give investors 4 quarters to adapt.

As advertising and other IP related offerings scale, and as we offer multi-tiered membership for online music subscriptions, the business impact of each paid membership varies. As a result, we are increasingly focused on revenue and profit as our primary performance indicators.

Given this evolution, starting from next quarter, we will discontinue the disclosure of certain quarterly operating metrics, including online music MAU, paying users and ARPPU.

We will instead report the number of total paying users across our music services annually, as of year-end.

– 4q25 TME earnings release

 

Nongfu vs. PopMart

Nongfu is ~25x 2026 P/E with ~13% 2027 EPS growth

PopMart is ~15x 2026 P/E with 27% 2027 EPS growth

Nongfu enjoys almost 4 times PEG vs. PopMart.

PopMart sounds like fashion – however, I see no real competitor in its space.

Nongfu sounds like a staple that can only grow – however, I see more competition here than what investors may assume.

Nio finally looks to make some money, so what?

How much losses has Nio made over the past few years?

Over 80 billion rmb, from 2020 to 2025.

In the worst years, Nio lost over 20 billion rmb per year.

Meanwhile, investors are finally seeing the light at the end of the tunnel – Nio made 0.5bn rmb in operating profit in 4q25, thanks to rising sales of large premium SUVs, which carries higher gross profit margin.

You need to take it with a grain of salt though.

1/ Fourth quarter is usually a good quarter

Indeed, Nio only guided non-gaap breakeven for full-year 2026.

Well, at least it’s not accumulating more losses.

2/ Peers like Li Auto, which was profitable before, made losses again in 3q25 

It’s the nature of auto industry to be cyclical, due to product cycles etc.

3/ Leaders like Tesla is already making money other than selling cars

If selling EVs is such a good business, Tesla should do more, rather than “diversifying” into FSD, energy storage etc.

Quality is the new darling – Walmart

Market has shifted to favor more traditional businesses including Walmart (also read Old economy is new and new economy is old).

Walmart stock is up more than 20% since Q4 2025, while Nasdaq index has returned LST.

In the most recent earnings, Walmart gave FY2027 outlook which is considered as conservative – adj. EPS $2.75 to $2.85 is below consensus of $2.96.

Here I revisited the guidance vs result in the past few years, using the annual guidance issued at 4q specifically.

Meanwhile, two other stories are underpinning the Walmart story.

1/ Higher margin and technology-driven business is growing fast, including ads, memberships, 3rd-party listings. Previous years’ investment entering “return” phase and capex, guided at 3.5% of net sales, is expected to peak this year.

2/ K-shape economy and tariffs are pushing more consumers to Walmart. High-income US consumers to “trade down” while Walmart is also the safety net for the “Downward Arm”.

AI to disrupt games?

AI has created chaos in many areas, including the gaming industry.

Google Genie was a case in point a few weeks ago.

TakeTwo (-10%), Roblox (-10%), and Unity (-20%) all down after Google debuts AI Game Creation Tool
byu/Rukuba inValueInvesting

However, I don’t think code alone is what makes a game successful.

Many successful games are like basketball or soccer.

It’s a cultural and social thing.

Shooting is fun but that’s not basketball is all about.

I bet AI can create and update new games easily but it’s the same for sports.

There can be new “sports” coming up – they can be fun to play as well. However, the number of players, the audience, the whole league/industry around a classic sport are the moat.

In the pre-AI era, I don’t think the studio that has top-tier coders is guaranteed to have blockbuster games.

$RBLX $TTWO $TCEHY

US equity entering a period of 垃圾时间

AI is driving up inflation like those shown in the December PCE – Recreational goods and vehicles (incl. personal computers) prices are up due to higher memory prices.

Higher PCE is limiting Fed’s ability to lower interest rate, which is needed to support US economy and US equity.

I think we shall see this dilemma for a couple of month – faster AI development means higher interest rates for longer, while slower AI development should hit sentiment as well.

Where is bitcoin price heading?

There are many theories out there and one of them is to compare with the 2021-2022 bitcoin crash.

From Nov 2021 to Jan 2022, bitcoin price crashed ~50%

  • $68,789.63 (November 10, 2021)
  • $32,917.17 (January 24, 2022)

From Apr 2022 to Jun 2022, bitcoin price crashed ~63%

  • $47,313.48 (April 3, 2022)
  • $17,708.62 (June 18, 2022)

Things are not the same this time – back then Fed was entering a rate hike cycle, Russia-Ukraine war/conflict broke out, and LUNA crashed.

Let’s say this time things are less severe. Fed is not going to raise interest rate anytime soon, although it may shrink balance sheet, plus major wars may be ending.

From Oct 2025 to Nov 2025, bitcoin price crashed ~33%

  • $126,272.76 (October 6, 2025)
  • $84,209.42 (November 22, 2025)

Let’s call the scaling ~2/3 vs 2021-22.

Then the second crash should be down ~42%.

In Jan 2026, bitcoin price was around $97,860.

To crash 42%, it would be ~$56,759.

We saw recent low at $60,074 on Feb 6, which is ~5% from our calculation above.

See previous posts on bitcoin

Big capex is not longer welcomed

US big tech continue to post higher capex outlook for 2026 and those figures are surprisingly large.

However, you now start to negative reactions.

1/ Their own stocks respond negatively

2/ Nvidia stock, which presumably is a beneficiary for higher capex, hasn’t responded very positively

#Why capex is less welcomed?

1/ It could just be higher inflation across the chain. higher price for infrastructure, power equipment and construction workers etc. Therefore, it’s a less-efficient use of money

2/ Investors don’t see immediate growth. The 2026 growth outlooks, which should be supercharged by already massive capex in 2025, is not impressive enough. Investors fear that marginal incremental growth coming from additional capex looks small, at least in the current year.

Chatted with ChatGPT and created model for gold price

With a 5-year time frame, I tried to create a gold price model for 2028, based on 2023 gold price.

Gold_2028 (USD/oz)
– Low $4,087
– Base $6,070
– High $9,556

gold_2028_model_with_deficit_cb

Disclaimer: I am not expert on gold nor did I have spent considerable time in studying it. But I was trying to understand different drivers behind gold price. I asked ChatGPT to pick the coefficients, so there is little credibility behind these coefficients.

 

Notes of Paul Tudor Jones (PTJ) on AI bubbles

Paul Tudor Jones on the AI Bubble Debate by Bloomberg

The only way to reduce debt to GDP is to have obviously nominal growth exceed your interest rate.

– Paul Tudor Jones

Here are notes for Paul’s interview and my opinions

  • Today feels like Oct 1999, but if this is a bubble, it’s a small one. Past bubbles ran 400–600%. Nasdaq is “only” ~200% off the bottom. Blow-off possible, not inevitable. [I agree; see my previous post Is it like internet bubble? in October]
  • Key bull case: rates. If Fed funds fall toward ~2.25–2.75%, that’s powerful fuel for equities. Markets look 6–9 months ahead, not at today’s data. [Sure]
  • Difference vs 1999: companies are profitable. [I don’t agree; I believe AI model companies like OpenAI etc. are losing a lot of money; let’s see when they publish numbers for IPOs]
  • Risk isn’t traditional leverage like in margin accounts — it’s derivative leverage: options, leveraged ETFs (up 250% from 2022 bottom), and trader-driven equity flows. [Very real]
  • Jones stays a trend follower. Recently, gold & silver > Bitcoin despite massive crypto inflows. He now expects precious metals to outperform crypto into year-end. [I wouldn’t agree back then; but I would be very wrong, so far]
  • Bond vigilantes were held in back; money debasement happened in gold and bitcoin instead. [True]
  • Biggest risk: concentration everywhere — stocks, investors, and policy power. [Agree]
  • Bottom line: short-term cautious, but Paul believes markets can be substantially higher by year-end. Likely long: Nasdaq. Short: Bonds.