Today, let's take a look at 'China's Buffett', known as the god of investment in China - Duan Yongping. His investment strategies and thoughts (summarized into 10 points) will definitely inspire you after reading them carefully!
Duan Yongping's entrepreneurial experience
Duan Yongping is indeed a somewhat legendary figure. In 1988, at the age of 28, he contracted a small factory that was losing over 2 million yuan (the later 'Little Tyrant Learning Machine' production factory). After becoming the factory director, he reformed the management comprehensively, and within a few years, the annual output value rapidly increased to about 1 billion yuan.
In 1995, due to disagreements with the original company on equity reform, Duan Yongping left Yihua Group and, together with his core team, founded BBK Company, whose products included learning machines, VCDs, MP3s, and telephones. He focused on marketing, winning the CCTV advertising 'king' title for two consecutive years, making BBK an industry giant with an annual output value exceeding 10 billion.
In 1999, Duan Yongping split BBK into three major business groups: education electronics, communication technology, and audiovisual electronics, which later gave rise to the OPPO and vivo smartphone brands. In 2001, after turning 40, he once again 'retired at the peak' and handed over the management of the business, moving to the United States and officially turning to an investment career, which has also been very successful, with current assets estimated to exceed $30 billion.
On June 30, 2006, Duan Yongping won the opportunity to have lunch with Buffett at a price of $620,100, becoming the first Chinese investor to obtain this opportunity. During lunch, Duan Yongping recommended Apple to Buffett, saying that Apple's business model is even better than Coca-Cola. Later, Buffett bought a large amount of Apple stock. Duan Yongping is also deeply influenced by Buffett's value investing philosophy and practices it accordingly.
Take a look at the main cases and performance of Duan Yongping's investments.
- NetEase: In 2001, when NetEase faced a lawsuit and its stock price dropped to around $0.8 per share, Duan Yongping decisively invested heavily. Just a few months later, the stock price rebounded significantly. His investment of about $2 million appreciated to over $100 million, yielding about 20 times profit. It was reported that the investment return rate exceeded 68 times over three years. NetEase should have been the first pot of gold in Duan Yongping's investments.
- Apple: In 2011, when Apple's market value was less than $300 billion (approximately 2 trillion yuan), Duan Yongping began to heavily build his position in Apple stock and held it long-term. The subsequent stock price of Apple increased by several times, making it Duan's primary holding. By the end of 2024, the market value of Apple holdings in his managed US stock investment account (H&H) still reached $10.233 billion, accounting for 70.50% of the total position.
- Kweichow Moutai: Duan Yongping regards Moutai as a 'long-term bond', believing that if there are no better opportunities for idle funds, placing them in Moutai is the safest. He holds almost all of his capital in Moutai in his yuan account and expects that in ten years, Moutai's stock price will outperform traditional assets like bank deposits. He has repeatedly emphasized that Moutai's intrinsic value has always been stable, only the price fluctuates, making it suitable for patient holding.
- Pinduoduo: In August 2024, when Pinduoduo's interim performance was below expectations and its stock price plummeted, Duan Yongping actively built his position by selling put options. According to the US stock 13F report, in the third quarter of 2024, H&H Fund increased its holdings by 3.8 million shares of Pinduoduo, making it the fifth-largest holding.
- Tencent: During the downturn of Tencent's stock price in 2022-2023, Duan Yongping bought Tencent ADR multiple times. At the beginning of 2022, he shifted part of his Tencent position to Apple; in November 2023, he stated that he bought 200,000 shares of Tencent ADR at about $41.05–41.10 per share (approximately $8.2 million). He also said he would gradually increase his holdings by selling 1,000 Tencent put options daily and believed that the current stock price corresponds to the company's performance, making it a good time for 'insurance opening'.
Summarize Duan Yongping's 10 investment insights:
1. Go fishing where there are fish: This is a quote from Charlie Munger, make money where you can. The A-shares have been hovering around 3,000 points for over a decade, while the US stocks have risen for 20 years. So why did Duan Yongping turn to US stocks instead of staying in the A-shares? Choosing the right direction is much more important than working hard!
2. Choose stocks for a year, hold them for 10 years. If you choose the right stocks, be friends with time. Buffett says if you can't hold a stock for 10 years, you shouldn't hold it for even one second. A stock god in China named Lin Yuan says that big money is made while sleeping; you must buy a stock that allows you to sleep well.
3. Buying stocks is buying companies. If a company's product is good, its business model is good, and the founder has vision and perspective, why should you still be afraid? For example, Tencent and Tesla, which recently plummeted.
4. Investing requires faith. Believe it from the bottom of your heart and do not be swayed by any influence, because everyone has a speculative heart! Duan Yongping has two accounts: one for value investing, holding a stock for the long term. For example, he bought Apple and has seen hundreds of times returns, never selling in 14 years. The other is a speculative account, which he ultimately found only made small profits.
5. There are no shortcuts in investing. If a person thinks there is a shortcut, they will probably still be looking for one 20 years later. Here, he mainly expresses that if you look for shortcuts in investing, like speculation, you will continue to seek in that way, and speculation is basically a 50/50 chance, no different from flipping a coin!
6. Reduce investment decisions. Don't make 20 decisions in a year; making 20 decisions in a year will definitely lead to mistakes. That is not value investing. Making 20 investment decisions in a lifetime is enough!
7. If you are not making money, reflect on your strategy. After a thief is caught, all they think about is how to improve their stealing skills. This mainly refers to speculation; can constantly improving speculation techniques really make big money?
8. Buy where no one cares, sell where there is a crowd. Previously, someone asked Duan Yongping why he was so courageous to buy NetEase back then. He said, 'If something worth 10 yuan is being sold to me for 1 yuan, what courage do I need? At that time, NetEase had 4 yuan in cash per share, but the stock price had dropped to 1 yuan. If NetEase were to delist, I would still be willing to buy it.'
9. The A-shares are not about being foolish. It is a big mistake to think that A-shares are about being foolish. The ones who really make money in A-shares are value investors, like his investment in Moutai, which he has not touched for over a decade.
10. I believe in fate; you will eventually become the person you want to be. This mainly talks about the essence of human nature being unchangeable. If you are a speculator, Duan Yongping says he cannot change you. If you agree with value investing, then you will become that kind of person. This is also why he wanted to have lunch with Buffett, because he is also a practitioner of value investing and has achieved results.
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