Date
28 July 2017
Facebook is more than a social media platform, and  Google, with self-driving cars among its businesses, is much more than a search engine firm. Photos: Bloomberg, Reuters
Facebook is more than a social media platform, and Google, with self-driving cars among its businesses, is much more than a search engine firm. Photos: Bloomberg, Reuters

How to think out of the box in investing

Most people jump to conclusions on superficial impressions and spend little time to find out the underlying truth.

In the investment world, a huge difference between value and price can bring massive profit or loss for investors.

Most investors will not spend the time to dig out the truth, and hence, very few will be winners.

For example, most Hong Kong residents complain about the influx of mainland tourists.

Is that valid?

Beijing has stated in its latest 13th five-year plan that it will support Hong Kong in cementing its role as a global financial, shipping and trading hub but does not mention tourism.

China is undergoing a slowdown in economic growth and deflation, and it won’t encourage the outflow of capital.

Meanwhile, the generation born in the 1980s and ‘90s has become the dominant consumers, and they prefer personalized products.

And they are the driving force behind the online shopping spree in the mainland.

Will Hong Kong remain a top destination for the younger generation?

The city’s retail sales dropped by 6.4 percent in September from the year before.

Are we near the bottom or just at the beginning of a slump?

Several retail, rental or Macau gaming stocks may have limited upside, although they’ve already posted sharp corrections.

Both Hong Kong and mainland investors should have a long-term vision if they are looking for opportunity amid China’s rapid growth.

Facebook is far more than a social networking website, with as many as 1.55 billion users.

It has managed to tap into the mobile market after acquiring WhatsApp, with 900 million users, and Instagram, with 400 million.

Facebook Inc., as a constituent of the S&P 500 Index, has risen into the club of firms with market caps of US$250 billion and above.

It beat the market’s expectations for its third-quarter earnings.

The market is focusing on whether Facebook will get the green light to enter the mainland market soon.

Meanwhile, Google is not merely a search engine.

It restructured itself, creating Alphabet as the parent company of Google Inc., in August.

Where is Alphabet heading?

Will it sell more ads on YouTube?

Or develop its unmanned-vehicle business?

What if a restaurant is allowed to sell ads on Google Maps?

What are Alphabet’s hidden gems?

Local investors have quickly jumped to a conclusion without digging deeper.

This article appeared in the Hong Kong Economic Journal on Nov. 6.

Translation by Julie Zhu

[Chinese version中文版]

– Contact us at [email protected]

JZ/DY/FL

Columnist at the Hong Kong Economic Journal

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