Aguero1010 @Aguero1010: "𝐈𝐧𝐯𝐞𝐬𝐭𝐢𝐧𝐠 𝐢𝐧 𝐂𝐡𝐢𝐧𝐚/𝐄𝐦𝐞𝐫𝐠𝐢𝐧𝐠 𝐦𝐚𝐫𝐤𝐞𝐭𝐬 𝐢𝐬..."

Romania

𝐈𝐧𝐯𝐞𝐬𝐭𝐢𝐧𝐠 𝐢𝐧 𝐂𝐡𝐢𝐧𝐚/𝐄𝐦𝐞𝐫𝐠𝐢𝐧𝐠 𝐦𝐚𝐫𝐤𝐞𝐭𝐬 𝐢𝐬 𝐫𝐢𝐬𝐤𝐲? Dear investors, copiers and followers, Roughly 35% of my portfolio is in companies from the emerging markets. Half of this is invested in China based companies. Most of the investments are significantly down for more than one and a half year. $9988.HK (Alibaba Group Holding Ltd (Hong Kong)) $0700.HK (Tencent) According to analysts, emerging markets (especially China) should be avoided by investors because of several risks like slower growth, real estate problems, regulations and restrictions, but the main problem could be that these markets are just simply different from the developed markets where everything is made to look good. Saying it's easier to invest in emerging markets than in developed ones would be untrue. It's tougher due to less available information, lack of transparency, and other complexities. It's possible that due to my background in an emerging area, I tend to look for opportunities and overlook news that focus on problems. Let's see what we have from these risky markets: 1. Alibaba and Tencent - two giants of China lost 60-75% of their capitalization in the past 2 years, but they are generating tons of cash and the sales are growing. The margins are lower, the growth is not like before, but when you ask me if I would buy a company with double digit net margin, almost 0 debt with growing sales at a PE of under 8.. I think I will do it. 2. $0992.HK (Lenovo Group) - one of my favourite. Not the best margins, not the best growth rate, but with plenty of good decisions of the management. The company is trading near the all time high price due to the good perspectives from the latest earnings.I invested in it because of the main business. The main business looks stable, but there are two other segments which are growing fast and there are many opportunities for a brand like Lenovo. In the past years they spent a lot in R&D and who knows what can they deliver additionally from their core business. The position was trimmed and the profit was invested in other companies. 3. $1585.HK (Yadea Group Holdings Ltd) - The business is growing at a rate of over 20% and the market gives it a PE of 12. It is not a business with 50% net margin, it is cyclical, it is influenced by the trend, but they are in the top of their industry, they are expanding, growing fast and doing good things. 4. $AGRO (Adecoagro S.A.) - doing boring business (farming) in South America. It is a simple business, it was improved in the past years and I expect realistic and stable returns from it. Price to earning of 7.. My other investments are in the Romanian market. There aren't many choices, but there are companies with price-to-earnings ratio of below 10 and a consistent dividend yield of 7-10% over the years. These companies are mainly in boring sectors like utilities, finance, or agriculture. I'd rather invest in undervalued companies with solid fundamentals than pay a premium of 40 times the earnings and worry when the market changes its mind. I prefer to profit from the sentiment shift. I aim for long-term investments, so I'm glad to buy more shares of these companies when their prices decrease. These are not investment recommendations, they are just my personal opinions. Patience is one of the best skills in investing. Keep it simple, Levente

5 Mentioned

9988.HK

Alibaba Group Holding Ltd (Hong Kong)

0700.HK

Tencent

0992.HK

Lenovo Group

1585.HK

Yadea Group Holdings Ltd

AGRO

Adecoagro S.A.