This week’s podcast is about political risk in China tech, but really it is about how to think systematically about the role of the State. And about making investment decisions on uncertain terrains.

You can listen to this podcast here or at iTunes, Google Podcasts and Himalaya.

Here are five investment approaches to uncertain environments.

1. Stay out.
2. Buy and sell fast.
3. Focus on quantitative certainties. Tangible assets.
4. Focus on really great businesses. And qualitative factors. Buy and hold through tough times.
5. Demand a bigger margin of safety.

How to assess the role of the State and political risk:

• Question 1: Does the State have an active role in this sector? 
  • If so, don’t go forward until you can understand it. It is one of three key forces.
  • If no role, then you can view this with a typical industry approach.
• Question 2: If there is an active role, what are the State’s interests? What is the evidence for this? 
  • Is it actively supporting? 
  • Is it against against rapid or significant development? 
  • Is it just muddy and mixed?
• Ques 3: If it is actively supporting, then ask how this firm is advancing the State’s interests? How is it working with govt? That is the main thing that matters.

About Giants, Dwarves and the State. See my webpage link.

----

Related articles:

• What TikTok Can Learn From Huawei About the Role of the State (Jeff’s Asia Tech Class – Podcast 39)
• How Tsingtao, CR Snow and the Other Beer SOEs Won Big in China (Pt 2 of 2)

From the Concept Library, concepts for this article are:

• Role of the State
• Giants, Dwarves and the State

From the Company Library, companies for this article are:

• Philip Fisher
• Ben Graham

--------

I write and speak about digital China and Asia’s latest tech trends.

I also run Tech Strategy, a podcast and subscription newsletter on the strategies of China / Asia tech companies.

This content (articles, podcasts, website info) is not investment advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. Investing is risky. Do your own research.

Support the show