Mohnish Pabrai at Boston College - Explaining Tencent to a 5-year-old

[@Camille_Boomer77000]

Aaahhh I was waiting for this video to come. :) Thank you Brad for expending on those interviews with Monish.

[@BradKaellner]

One more in the queue ;)

[@Nik-up5kg]

Great video. Do you think it’s still a great company after the possible spin off of the very successful app from Tencent ( forced by the Chinese government)? Also latest Q earnings were the lowest in the company’s history . Also Mohnish bought Prosus

[@jeremynewell9903]

This insight is amazing! Too bad I don't feel like Tencent is for me. Same with Facebook, if I wouldn't want to use the product myself then I'm going to avoid it as an investment.

[@BradKaellner]

Waiting for the fat pitches is the hardest part ;)

[@user-st9iw1fr2l]

I'm glad he read the naspers letters about tencent and shared his knowledge.

[@BradKaellner]

Yes, such a gift

[@wj3280]

Can you help me understand the -2.1% net cash to market cap? Tencent mentions in its 21Q3 earnings that their total cash were RMB 289.5 billion , or 44.6B in USD, so I want to understand more about the concept of net cash, which is -12 billion. Thanks!

[@mawean]

Thought provoking video. Thanks for sharing, Brad! 🙏👍

[@BradKaellner]

Getting the gears turning over here as well!

[@sebastianschmidtataktien-e4705]

Great video again, Brad. I had watched Mohnish‘s Video and also the Peter Thiel one just to close the loop. Not planning to sell any Tencent shares. I started my Tencent position about 2,5 years ago and also added to it during last year. Only reason i am not adding more here is - I don‘t want to increase my overall China exposure too much. I had added Alibaba though on the last dip.

[@BradKaellner]

What is China as a percentage of the portfolio?

[@sebastianschmidtataktien-e4705]

@@BradKaellner between 8-10 percent at the moment.

[@brotherleo4090]

Sebastian, if you don't mind me, how did u invest in tencent? Ameritrade? Naspers or Prosus?

[@sebastianschmidtataktien-e4705]

@@brotherleo4090 I invested in Tencent directly. Back then I didn't even know about the Naspers/Prosus constellation. If I were to add more I might be tempted to buy Prosus. Also some of their other holdings may be interesting at some point in the future. They also bought back about 1% of their shares over the past 3 months, which I find interesting.

[@brotherleo4090]

@@sebastianschmidtataktien-e4705 through some online brokerage firm?

[@compound7269]

Brad have you looked at ASML. They have a 90%+ monopoly selling lithography systems equipment essential for all semiconductor fabs including TSMC, Samsung and Intel. My question to you is, are all ‘surfaced whales’ harpoonable? Can the whale relax on the surface knowing their moat is too strong?

[@BradKaellner]

I'd say a few probably can, but the list is short. Visa, Mastercard, Moody's come to mind

[@swift8837]

Hi Brad, love your videos. Can you provide the fairfax county library link? That would be great to have access. Many thanks!

[@BradKaellner]

www.fairfaxcounty.gov/library/non-resident-library-card-application

[@mangalpal8921]

So Brad..did you add Tencent in your portfolio....I doubled down Tencent after watching this video.

[@BradKaellner]

I may have boosted my Tencent exposure ;)

[@thenon-gaapbillionaire3306]

Pabrai never said he's more bullish on tencent compared to BABA. He said it's a better business. But it's also at a more expensive valuation to BABA.

[@BradKaellner]

Good catch Vagabond! That was sloppy speech on my part.

[@mirkosprangers5879]

I've felt he's been more bullish on tencent for a while. Baba was a direct result of Munger buying it, tencent was his "own" conviction, at east to my knowledge.

[@BradKaellner]

Yeah I guess ever since he started talking about Naspers he's been bullish on Tencent, although perhaps true understanding of the biz model came only recently

[@TheNExperience]

Speaking of digital Warren Buffetts - tencent owns (I believe substantial) stakes in riot games and epic games. Epic owns: Fortnite, and the Unreal engine. With those two things alone, and the impending growth of the metaverse, Epic will be a goldmine on its own. It's not publicly traded, so one of the only ways for us to own it is through an investment in something like tencent.

[@BradKaellner]

Nice catch!

[@jh-mz2wy]

Question: 1st business grows at 65% and the second grows at 35%. So why have total revenues only grown by 25% over the last 3 years? Source: Morningstar

[@BradKaellner]

Those returns are relative to capital invested in that year, not total capital

[@patchtogether]

Didn’t tencent invest every dime they got?

[@lilbroomstick7914]

A lot of great athletes including LeBron James have become investors due to the dropoff reason you described, but investor growth continually happens throughout life if you stay curious

[@BradKaellner]

Yeah I saw a Twitter thread about investments that KD has made... the returns have been bonkers

[@mm0dk0ur]

Thanks for the very useful and interesting content on your channel, please continue. But two points to consider: 1) The company is still not in Pabrai portfolio. I checked Tikr after his video and still cannot find it 2) In the last part of lecture he said that if everything goes well, Tencent and Alibaba can be 10x but not 100 baggers due to their size.

[@Milziade490ac]

Theres is nothing wrong with a 10x :)

[@mm0dk0ur]

@@Milziade490ac indeed ur right, but the big question still stands, why he doesnt own it ?

[@mangalpal8921]

@@mm0dk0ur let's wait for 13f...I watched entire video of pabrai lecture. He seems to be so impressed and even told that on many points Tencent is better than baba.

[@Milziade490ac]

@@mm0dk0ur 13F will not help us, he can have tencent in hk, prosus in europe and naspers in south africa. He definitely holds it already.

[@BradKaellner]

While I love TIKR, we cannot rely on it to reveal positions that aren't required to be disclosed. If Pabrai bought through Hong Kong, Amsterdam or Johannesburg, we won't be able to see that he owns it. I assure you Pabrai is happy to turn a $50m bet into $500m.

[@scottdawson9987]

Brad, I hope you are doing well and I imagine the baby is pretty big now. I recently found a low PE stock called Jackson Financial, JXN. Its a recent spin off of Prudential's NA insurance and annuities business. It trading a 1.2 PE, which I believe is because the shares given to Prudential shareholders are being sold right after the spinoff. Not a lot of coverage on this new stock and I am looking for other investor thoughts. I like spinoffs as buying opportunities. I am doing my deep dive now. I look forward to your thoughts if your interested.

[@BradKaellner]

Thanks for the heads up Scott! Sounds compelling. I'll see if I can turn up anything.

[@scottdawson9987]

@@BradKaellner Brad, great to hear from you and I got your email. I will send you what I have researched so far via email. You should get it later today. We can talk after.

[@beep149]

Brad synthesizing it and explaining to a 3 year old 😁

[@BradKaellner]

I'm not sure my 3 year old would fully grasp this ;)

[@davidwilson9976]

Starting to question my 20% limit on Chinese stocks when China is the future.

[@BradKaellner]

What made you set a 20% limit in the first place?

[@timehealthfit1891]

You light up the room, want to be youtube friends?

[@BradKaellner]

Aren't we already?