Weekly Highlights
This weekend, I read on FT Alphaville about the strength of the US Dollar. They argue that fiscal largesse has caused imbalances in the economy. They ask themselves: does it make sense that US gas station managers make more than many European doctors? Or that Jane Street interns make more than the UK prime minister? Perhaps the US Dollar is simply overvalued.
Post of the week
Last week’s post on Asian Century Stocks was on Chinese e-commerce operator JD.com (JD US - US$57 billion). It dominates the niche of selling branded, authentic goods with fast and reliable delivery. It achieves this by selling products directly from its balance sheet and through its proprietary logistics infrastructure, much like Amazon does in the United States. The difference, however, is that JD.com trades at 9x forward P/E compared to 48x for Amazon.com. You can find my full post here.
Tweet of the week
I penned a tweet discussing the Indonesian biscuits company Mayora Indah (MYOR IJ — US$3.4 billion). The company owns a number of fantastic brand names, including Beng-beng chocolate — which is popular among children — Kopiko coffee-flavoured candies, Roma biscuits and Torabika instant coffee. Mayora is an innovative company, with several new products released in the past few years, including a dark chocolate variant called Dark Wonder. They’re even doing well overseas. The only question mark is the use of related party distributors, with potential transfer pricing issues.
Podcast episode of the week
The best podcast episode from the past week is, without a doubt, Ryan O’Connor’s breakdown of Japanese entertainment company Nintendo (7974 JP — US$xm). Nintendo just announced its latest video game console, the Switch 2. The new console will be backwards compatible, letting users play old Nintendo Switch games. And thanks to a Nvidia Tegra chip, it will finally be able to play AAA games, such as Call of Duty, in direct competition with Microsoft’s and Sony’s consoles. Ryan makes the case that Nintendo will drastically increase its earnings over the next few years thanks to the Switch 2, new theme parks and continued monetization of intellectual property through movies and other types of content.
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