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The week's question
In March 2025, in the thread "Re: OT, out", Umm asked the members: "Do you think it is because America is made up of magical soil that makes businesses based in America magically profitable?" This week it is put to everyone again. The button below opens the small thread re-asking it - read what others have said so far, then give your own answer as an ordinary reply.
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Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
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Author: Manlobbi ✺  😊 😞
Number: of 22352 
Subject: Re: PDD
Date: 05/12/25 6:30 AM
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Does PDD meet the Steadfastness criteria you have described elsewhere in your Manlobbi method of selecting investments?

PDD doesn’t meet my own Steadfastness apparaisal, though that is likely owing to my ignorance rather than the firm (and jurisdiction) itself. The 4th pilar of steadfastness in the Manlobbi Method, subtle but crucial, is that you have to be able to appraise it oneself rather than infer it from someone’s else’s conclusion.

They seem to be really financially disceplinned though, not succumbing to speculative research and super focussed on getting stuff to the Chinese public at the lowest conceivable cost - requiring bulk sending to groups to achieve the goal.

Their overseas business (Temu) is about 25% of their sales, so less important than their local ludicrously-low-cost business model, despite the attention it gets here.

30% of the present market cap in net cash! If the low price continues that will just rise and eventually they could purchase nearly all their shares back.

But a non-Steadfast (having a chance of the company not being around in 40 years, or the *lower bound* for the 10th year of trend-earnings being simply not forecastsble) can *still* have a place in a portfolio in (1) small allocation such as 2%, and (2) thinking of the investment from a central estimate perspectice rather than lower bound perspective.*

- Manlobbi

* If you have lots of non-correlated bets each with a 10% chance of catastrophic failure but the average return over all of them (including the failures) expected to be 18% per year, then it is effective (though this approach is the antithesis to the Manlobbi Method which emphasizes very large, highly understood, positions) to buy all of them but strictly only when each is in small quantities.

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