The title picture comes from: Visual China, this article comes from WeChat official account:Tencent Finance (ID: financeapp) , author: Feng Biao, editor: Shen Chong, the original title: “60 times PE of Maotai can buy it? “Alternative” Investor Dong Baozhen: Be wary of double bubbles caused by double collapse”
On March 30, Kweichow Moutai announced its financial report showing that the net profit for the whole year of 2020 was 46.697 billion yuan, a year-on-year increase of 13.33%. Although the performance is still good, the sharp correction of Kweichow Moutai’s stock price since the beginning of the year still caught many investors by surprise.
Among the many investors in Maotai, “alternative” investor Dong Baozhen left the market in 2018 after investing 12 times in Maotai. In the following two years, Maotai’s share price has soared from about 800 yuan to the current 2,000 yuan. .
“When the stock price of Moutai was 100 yuan, people mistakenly believed that Kweichow Moutai would be in a long-term decline, which created the investment value of Kweichow Moutai, which was unprecedented in a thousand years. When the stock price of Kweichow Moutai rose to 800 yuan, everyone found that Kweichow Moutai was good. Therefore, the 800 yuan Moutai has no value. Misunderstanding is more important than objective attributes in the value generation process.” Dong Baozhen said.
Although Moutai’s share price has recently recovered, there are still brokerage research reports that Kweichow Moutai has a target price of 3,000 yuan in the next year, that is to say, there is still more than 50% room for increase in the current share price.
But Dong Baozhen still insists on his point of view. In a recent conversation between the author and Dong Baozhen, chairman of Lingtong Shengtai Investment Management Company, his loud voice can fill the entire office. He confidently insists that he only earns valuable money, not bubble money. However, some people think that this is just his “stubborn mouth” who has not made the most profit.
Dong Baozhen believes that he is the true practitioner of Buffett’s value investment theory, and he also defines himself as a “retrograde in the market.” He believes that true value investment is based on the most fundamental principles of things. From the original investment in Maotai to the current investment bank stocks, it is based on the most essential logic, in a nutshell: “Shun Dao”.
Moutai’s value discovery: spiritual consumer goods that will increase in price
In 2013, “three public consumption” was restrictedThe market is generally not optimistic about the prospects of Moutai, and the news that Moutai will not be able to sell is rampant. Dong Baozhen thinks that it is unreasonable that no one buys good wine.
In order to confirm his judgment, he flew to the Kweichow Moutai packaging workshop to observe. He chatted with the security guards, chatted with the cleaners, waited at the bathroom door and waited for the workers to talk to the workers when they went to the toilet, and went to the transfer warehouse to investigate the delivery and sales of Moutai. When the scenes seen on the scene were completely consistent with his theoretical analysis When they agreed, he was so excited that he had dug up gold. Although Moutai’s stock price fell more than 60% in the following two years, Dong Baozhen was dubbed the “bearest fund manager” because of the severe drop in the fund’s net value. However, time finally proved that he had indeed dug the “gold”.
Q: Why did you pay attention to Moutai?
Dong Baozhen: I have been following it before. I study Buffett’s value investment. Buffett is a major consumer and finance. I learn it mechanically and look for it in consumption. During this process, I suddenly discovered that there is a type of consumer stock that can be increased in price. It is both consumer stocks and the ability to increase prices is double insurance. In 2005, I wondered why the prices of Moutai and Wuliangye kept increasing? Moutai is a consumer stock that can raise prices. By 2007 and 2008, I understood that consumer stocks that can raise prices are all big bull stocks. Of course, the valuation must be reasonable, and the valuation is high.
Q: You were steadfastly optimistic about Moutai during the period when Moutai was not favored. How did you discover the value of Moutai?
Dong Baozhen: Around 2013, the main point of disagreement surrounding Moutai is whether Moutai can sell well. No one has hyped the concepts of Moutai’s management level and production quality. At that time, the prevailing view was that no one in Moutai was drinking, so no one bought it. There was a backlog in Moutai, and some people even said that Moutai dealers sold instant noodles on the Internet. Our research and investigation center around demonstrating whether Moutai can sell or not. The main thing that sells is price, but there was a panic at the time, so the price was distorted, and the dealer didn’t dare to hold the inventory, and sold it as soon as it got the supply. It’s like stocking up as soon as they get the goods, because the price was falling at that time, and the dealers were afraid to get the goods. So if you want to know the true supply and demand relationship, you can’t simply look at price trends, but look at inventory. In my research, I looked at its inventory. I suppose I am a buyer, and I asked the dealer for 50 boxes of Moutai. As a result, almost no one can provide it after calling all the dealers. At least no one can provide it right away. I know that there is no inventory and they are all sold.
Q: There is no question of whether Moutai can be sold, but whether it can be bought. Moutai is still the original wine, what factors have changedUp?
Dong Baozhen: Luxury cars and ordinary cars have four wheels, but the price of luxury cars is dozens of times higher than that of ordinary cars. Where does the value of these dozens of times come from? This is the need from everyone’s spiritual level. The production cost of luxury cars is a bit higher than that of ordinary cars, but not so much. Luxury cars have nothing to do with cost, and Moutai has nothing to do with cost.
There are still many Internet celebrity economies. In order to support idols, even unused goods must be bought back. This is spiritual consumption.
The price formation mechanism of the phenomenon of star chasing is similar to the price formation mechanism of Maotai. For example, there are two fans. One fan is rich and the other fan has no money. In the physical world, 1,000 yuan is more than 500 yuan, but in the spiritual world, the consumer’s expenditure is based on income. I found that the price of Moutai fluctuates between one-third and one-half of the per capita monthly income. This is the characteristic of Moutai as a spiritual consumer product.
Q: Speaking of price, Moutai currently has two price systems, one is the official guide price, and the other is the dealer’s real market price. Moutai requires dealers to sell it at 1,499 yuan, but the market sells around 3,000. .
Dong Baozhen: The dual-track price system of Moutai essentially reflects that Moutai’s sales channels are problematic and the market system has problems. This is also a manifestation of Maotai’s inability to control channels.
Any well-known consumer product has the ability to control the retail price. The control of the retail price is the control of the dealer. Only Moutai cannot control the price of its own products. Moreover, Moutai wanted to control it, but it didn’t come true after so long. why? There is a problem with the market structure. The dealers in Moutai are all small stores, each of which is 3 to 5 tons, and there are thousands of such small stores. The small and scattered market structure makes it difficult to control.
Q: But the structure of large distributors may also cause distributors to control the voice of the channel, and in turn “kidnap” the winery?
Dong Baozhen: If an industry is supported by large companies and the industry is stable, small Maotai dealers are not easy to control, because there are too many subjects, and one-tenth of them will be bad if they don’t listen to you. Up. China’s famous liquor brands have a common problem, focusing on production, because the market was outsourced in the early years, which caused the market to get out of control after it became bigger. The market channel can be understood as the princes. If the princes do not listen to the central government, they will be cut down.
Q: Now Moutai’s sales channels are changing. Direct sales channels have been added to Tmall, JD.com, and local supermarkets. Do you think it will be a trend? Will some other distributors be cancelled more in the future?
Dong Baozhen: It will be a gradual change. Incremental channels do not have the shares of traditional dealers. The proportion of traditional dealers is getting smaller and smaller, and price control is back. Moutai trades time for space. The prevailing view in the market is that Moutai will raise prices on a large scale, because the retail price is now only a few thousand yuan, and its ex-factory price is more than 1,000 yuan. Moutai distillery has suffered a miserable loss. This view is still thinking in the old model. Now the biggest interest for Moutai is to control the channels, not to put the interests of the channels in the pocket. It is still a short-term behavior of earning some money back. It is now going to revolutionize the control of channels and solve the problem of its inability to control the retail price of the terminal. How to do? It is self-employed, neither the retail price nor the ex-factory price is increased. The self-operated recycling process not only recovers the profits, but also becomes the leading sales force.
Q: There is a view that Moutai also needs dealers’ enthusiasm to a certain extent?
Dong Baozhen: No, no, no, I can say this responsibly. I have communicated with Li Baofang (Former Chairman of Maotai), Li Baofang It is painful to study how to suppress the terminal retail price, but it can’t be suppressed. Moutai has tried many ways to suppress prices, but it can’t be suppressed.
Question: Let’s go back to the point of view of spiritual demand products you mentioned by taking the price question. If Moutai really succeeds in suppressing the price to a level of 1499 yuan, will it affect its attributes as high-end consumer goods or luxury goods? ?
Dong Baozhen: There are two aspects to this. The first is that it cannot be suppressed. As long as the channel structure is not changed, the sales channel cannot be suppressed if Moutai does not lead the sales channel. Second, the high price of Moutai is not the essence of spiritual consumption. It has a cultural attribute. Drinking Moutai is a representative of the elegant Eastern culture. This is the essence. Because of this “book”, everyone loves to drink, like, and yearn for, and finally the price goes up. Of course, there are speculation factors in the price increase process, so even if you remove the speculation factor, it will still make everyone want to buy it as a spiritual source of the symbol of Eastern culture.
Is Moutai overrated? There is very little time for 60 times the price-earnings ratio
In 2020, Kweichow Moutai’s performance will still maintain high double-digit growth, and certain expectations have allowed Moutai’s stock price to continue to soar sharply in the past two years. The national grabbing of Moutai and stockholders’ speculation in Moutai complement each other.
However, Dong Baozhen successively cleared Moutai stocks in 2018. In his opinion, when everyone recognizes the value of Moutai, Moutai willThere are two ways of saying this. One argument is that from my behavior, the general public thinks that I am a reckless person. No one in China only holds one stock and adds leverage, and it has fallen by 50%. It is also difficult for China to find people who never diversify their investment. People, but I dare, from this perspective I am very reckless. However, people who know me well, including my partners, know that I am very cautious. I never make decisions lightly. I have bought two types of stocks in more than ten years, one is Moutai, and the other is the bank I buy now. The number of stocks I have bought in 10 years does not exceed 7 or 8 stocks. I don’t make decisions lightly, but when I make a decision, I just pour out my bag.
Q: So, what do you think of risk?
Dong Baozhen: When Maotai’s 8 times P/E ratio, I had a full position. Then there is no risk, there is no risk. There is no need to guard against risks when there is no risk! At that time, as long as possession is money, you should speed up to pick up money. On the surface, it looks like it was all invested and it is still falling, but in fact it is a rational behavior. I’m actually a true conservative. For example, when I have lunch at noon, I don’t eat dishes that I haven’t eaten before, and I never drink milk, because I have never drank milk since I was a child, so I drank cold water when I was a child. But my behavior makes people feel like it’s aggressive. It has a price-earnings ratio of 8 times. If it doesn’t aggressively increase, wouldn’t it be irrational?
Q: What do you think of investment theories such as portfolio management and risk quantification?
Dong Baozhen: I think the combination is difficult to understand. One question has not been figured out yet, but you have divided it into three questions. Isn’t it more confusion and unknown? I think diversified investment cannot avoid risks, but amplifies risks. In my opinion, risk is the unknown world, and risk is the unknown. Turning the ignorance into knowing and turning the unknown into knowing will control the risk. How to resolve it? Just focus on one stock. If one stock is not clear, and another five stocks are bought, and then they are safe now, because I have five stocks, I don’t know what the logic is. It’s hard to understand this theory and write it in textbooks to people every day. I don’t understand it very much. I once gave lectures in some universities, and I said that you turned out the finance textbook and turned to the first few pages. You tore me the page of efficient market theory. The students did not dare to tear it. I said you turn to it again. For the diversified investment, you tore that chapter to me. Those are all harmful, and the students dare not.
Q: In recent years, passive investment strategies such as ETFs have become more popular. The theory behind it is that it is difficult for individuals to surpass the market. Do you disagree?
Dong Baozhen: I don’t agree with it. It is a question of the level of investors. Munger can surpass, Buffett can surpass, Graham can surpass. Munger said in “The Poor Charlie Collection”, “We rely on whether we are scattered, and concentrate on betting on the greatest opportunity to achieve excess.Profitable. “This means that some people can find the most valuable and safest subject matter and then concentrate their investment. Some people can’t surpass the market and form an index fund, but it can’t be denied that someone can surpass? Exceeding, although not every day, sometimes I’m not as good as the index. I buy stocks more and more. I will find that I can surpass the market after a while.
Q: When your fund loses money, are there any investors who want to redeem it? How do you convince them?
Dong Baozhen: Yes, most investors don’t understand investment after all, so they rely on net worth to determine your level. This standard is wrong. I have a theory that my stock has fallen, but on the other hand, the margin of safety of the stocks I hold has risen? My stock was originally worth 10 yuan, and now it has fallen to 2 yuan. My net worth has also fallen by 80%. However, this net worth of 80% has increased my margin of safety. As long as the company does not go bankrupt, it will do. Knowing that it will not go bankrupt. If there is anxiety during the decline, such investors are actually not suitable for stock market investment.
Q: Will an individual’s personality determine his investment philosophy?
Dong Baozhen: The final success or failure of investment is character. Li Lu (a well-known investor, Munger’s partner) once said that he asked Buffett and Munger about the final determinants of value investing Ba and Mang talk about disposition, natural disposition. Therefore, the personalities of value investors are very similar. You see that I’m wearing bad clothes, have you noticed it? In fact, Li Lu also dressed badly. Once I met with Li Lu, I saw that an international investor looks a bit like my outfit, and a sense of intimacy arises at any time. He doesn’t particularly care, he is very casual. He said in a speech at Peking University. He said that people who are particularly fond of luxury goods must be rich, but they are definitely not suitable for investment because he cares too much about other people’s evaluations.
value investment, first establish its bigness
Q: Now that you are investing in banking stocks, can your previous glorious results be repeated?
Dong Baozhen: I think it is possible, because its logical model is the same. Maotai’s investment opportunity is that excellent companies are treated as rubbish and mispriced. Under the interference of a certain event, the public mistakenly turned the gold stall into straw, and the gold was priced at the straw price. Over time, the price of straw has grown into the price of gold and then into diamonds. The same is true for banks, which are now considered to be bankrupt.
Q: There is a stalk on the Internet,The third and the new third of stocks, the third of which may be older old stockholders who hold oil, banking, and traditional industries. Now the new generation, such as those born in the 90s and 00s, hold the Internet And things in emerging industries, what do you think of this?
Dong Baozhen: I can say that Buffett has never bought a stock with a P/E ratio of 20 times in his life. However, Buffett has become a stock god. But now so-called emerging companies, I don’t know what their P/E ratio is, and I never look at them. The high valuation itself is a source of risk, even if it has a growth advantage. In fact, old investors are capable. In the capital market, old investors often fail to outperform new investors, but after a few years, the new investors have long since disappeared. The old investors are still there. The old investors have earned 30% after a few years. Earned 300% first, then went bankrupt, just like this game.
Q: How do you usually do investment research?
Dong Baozhen: I mainly think about profound concepts and principles. For example, in this subject research, I think about logic and reason the most, including sources of wealth, investment ability, human nature, and soul. These things seem to be useless and useless, but the more useless, the more useful. I mainly think about this thing and complete it. Own theory. I have designed many concepts myself, such as “spiritual economics” and “mental marginalism”. I string these theoretical concepts together with a string to come up with a set of theories and continuously improve them. Then my behavior is in this theoretical framework. It evolves naturally and executes naturally.
Q: Your research method is very different from those of industry researchers.
Dong Baozhen: Research can be divided into two types. One is phenomenon-oriented. The chairman has changed and new products are on the market. This is phenomenon-oriented. The phenomenon-oriented type is blind people touching the elephant, purely blind people touching the elephant. The other is an essentialist. The typical representative is Buffett. Buffett proposed that the core job of researchers is to find competitive advantage. Competitive advantage has nothing to do with new products. Competitive advantage is the company’s deep and internal competitive advantage, or called a moat. With this element, you know its future. As for what it does every day, what is its importance?
Q: Don’t pay attention to daily activities, do you usually watch the news?
Dong Baozhen: Anyway, I haven’t watched TV in fifteen or six years. I will study “Animal World”. I especially don’t watch movies, and I don’t like to watch entertainment. I consciously shut down the daily news information, because it is a trend and smoke, it has nothing to do with the essence of the moat of competitive advantage. Someone asked, how do you study Mr. Dong’s Trump policy and why is it necessary? You say that this company has closed down because of Trump’s policies, indicating that this company is too fragile. right? Look at Huawei being labeledIn that way, continue to grow stubbornly. So don’t look at the phenomenon. There are many things you fail because you know too much, and it is better not to know.
Q: I see your Weibo is still updated every day, are you writing it yourself?
Dong Baozhen: I did the scolding with others, and my partner did the others too. Because I scolded them not because of my personal affairs, I can’t stand their misleading and nonsense. For example, some people say that there is no group, and the hero sees the same thing. Isn’t that talking nonsense with open eyes, then I can’t tolerate it, and I criticize it.
Q: Is there anything consistent in your investment research? Can you summarize it?
Dong Baozhen: Let it go, follow the truth. Value investment is to comply with the law of value, the law of value is the truth, and value investment is to predict the future. What determines the future? The future is determined by reason, by law. As long as you know which law determines it, you can predict, adapt and wait for the law to happen when you understand the law. So just drop by.
Sometimes reality is the opposite of truth, but you have to believe in truth. It is unreasonable that LeTV is soaring at an 8 times P/E ratio for a company as good as Moutai. The world has the greatest truth, which is consistent and ultimate. There is a difference between Moutai and the bank, but what is the difference from the perspective that it is abstracted to conform to the law of nature to make a profit? It’s all the same.
The thinker Lu Jiuyuan said “first establish its greatness”, saying that it is useless for you to read books. You first establish the greatest truth. His greatest truth is called loyalty and benevolence. His famous view is to establish its greatness first. It is to first understand the principle and practice the principle. You do not know how to write calligraphy, and you are educated because you are loyal, filial, and benevolent. Investors are different from entrepreneurs. Entrepreneurs need to know everything about people, property, and everything. Investors don’t need to know trivial truths because they don’t do real things. Investors know the biggest truths and just wait.
Q: What is the biggest “Tao” in investment?
Dong Baozhen: The margin of safety is the biggest and most important way. Graham has become the father of value investing by relying on these four words. The Chinese value investment circle is very interesting. They all say that they are value investors, and they all say that they learn from Buffett’s value investment, but they don’t talk about the margin of safety.
Q: Recently, some fund managers are particularly sought after, what do you think?
Dong Baozhen: My level is very low, but at my level, those popular star fund managers only ration me “shoes.” First, a real good investor rejects leeks. Investment level is as high as oneAfter setting the level, he no longer mixes with leeks, because he knows that mixing with leeks is inevitable. He needs to choose customers. He does not accept irrational customers. Instead, he must find truly rational long-term funds. Those who really understand investment must This is the case, choose long money in customer selection and funding sources, and the customer also needs to understand logic and trust each other.
Secondly, as an old investor, I know his philosophy after reading what they have bought. They are still buying stocks with several hundred times the price-to-earnings ratio. For example, buying liquor stocks is a traditional industry and not an Internet company. How can there be a surge in the future? It is a Ponzi scheme. I belittle these funds for the public good, and I do not have personal hatred against these people. The money of the world should be so squandered, which is harmful to the society, the country, and the investors. The recent trend of liquor stocks has hurt many people. It is not easy for ordinary people to make some money. Some stocks have fallen 40% in two weeks.
Sometimes, the more money a fund manager earns, the less able to invest. On the contrary, the more able to invest, the less profitable it will be in a specific market environment. The more you understand investment, the less money you will make. I didn’t buy leverage or bubbles before, so I bought a Moutai honestly.
Q: You are not from a financial or investment subject. How did you form these ideas?
Dong Baozhen: I used to be in charge of computer equipment in a securities company, responsible for transaction clearing. I was the first to contact securities in China. I had no food to eat in my work unit, and I couldn’t find myself in a group of people. I couldn’t adapt to the environment, so I came out by myself.
I am a more serious person, love to ponder, and it may also have something to do with my personality. Before I was 20, I focused on finding aliens. I studied where aliens are and what they might look like. I also subscribed to a magazine called UFO Exploration, which is what I love to study abstraction. The other is love to ponder, especially when it comes to the stock market, it needs to be pondered.
Q: When you advocate value investment and long-term investment, will you consider your company’s short-term performance? Does your company have KPIs?
Dong Baozhen: I don’t know what KPI is.
Q: Is it the goal, performance, set a goal for yourself?
Dong Baozhen: I did not track down or ponder this issue. I also have goals, but many people think I can’t achieve them. I will publish two books, “The Banking Game” and “The Marginal of Mind” recently. I hope that my thoughts and concepts will still be popular in 500 years.
Q: This conversation is very interesting and inspired.
Dong Baozhen: I have no other ability, just a set of flickers.
This article is from WeChat official account:Tencent Finance (ID: financeapp)< span class = "text-remarks">, author: Feng ment