Our analysis about right time to buy North Asian Equities was spot on!
Singapore, Dec 14 2020
This edition (week 51 of 2020) of the newsletter begins with a bit of a gloat. In our LinkedIn post on Oct 21 we had said that Canopy data when combined with bank research was suggesting that the time was right to buy North Asian equities. The chart above shows that North Asian equities (defined as an average of CSI 300, TAIEX, KOSPI and Nikkei 225) outperformed the S&P 500 and DAX by around 6% since then.
The data … it talks !!
What are the best performing investors buying now
Thank you so much for your emails and also for responding to the survey last week (and apologies in case our Google Forms did not work behind your company’s firewall). Most of you wanted to know what assets the best performing investors bought, so here goes.
Since investors have vastly varying risk appetites, ‘who are the better investors and what are they buying’ type of analysis makes sense only if done at an unleveraged sub-asset class level. Given that Asian equities are on the upswing, let us start by analyzing the performance of investors in listed Asian equities (we will analyze other sub-asset classes in subsequent newsletters).
The chart below shows the volatility and return of investors who had invested an average of at least USD 100K into Asia equities during 2020.
From the chart above, we selected investors whose performance was in the ‘Goldilocks’ zone (i.e. not too hot and not too cold) and looked at what they currently own.
The chart below shows the most owned stocks amongst the group above (a larger rectangle means more people owned that same stock)
And e-commerce seems to be the theme. Alibaba, Meituan Dianping and Sea Ltd. are all amongst the largest owned shares by investors who have done well in Asian stocks this year. Also very significantly we do not see any Tencent shares here in this list.
The mystery from last week continues. The Chinese stocks (Alibaba, Ping An, Meituan Dianping etc) have not risen much in spite of investor interest. Sea Ltd of course continues to be on a roll.
Please note that this newsletter is just a data analysis of actual investor behavior and does not constitute investment advice in any form.