From Alibaba as “Amazon of China” to Amazon as “Alibaba of the USA”

“Innovative market leaders can excel in emerging countries”, writes a clever investor in his “Christmas letter”, who may be quoted here, but wants to remain anonymous, since his letter is only addressed to his “investors and serves to maintain contact with a few other acquaintances / friends”: “When it comes to innovation, the big US tech companies seem to get the most attention, but this could shift to China and other emerging markets.”

His letter has been reaching his investors and a small circle of acquaintances and friends for decades now. His website doesn’t bother with design, perhaps along the lines of He has learned that modesty, discretion and restraint are useful for his work. “Accordingly, you are welcome to use the information, but please do not quote me. And a comparison with Warren is flattering, but not correct in terms of size alone; he employs 25 people,” jokes our contact with regard to his own staff.

Anyone who has had the privilege of reading his annual Christmas letters for so many years will remember many of his predictions, which later became a partly joyful and partly bitter reality. Is it because of his strict logic? This and his track record can be thought about elsewhere, here it is permitted to quote a tiny part of his forecasts for 2021:

“We will see,” he foresees, “how emerging-market companies evolve from imitators to true innovators. We used to refer to companies like Alibaba as ‘Amazon China’ or Baidu as ‘Google China’, but these companies actually have their technology developed and localized while accelerating its growth in ways other than the US. “

“Successful newcomers may grow faster than more established companies,” says his math, “probably long before they make a name for themselves outside of their local markets. Pinduoduo, an e-commerce company in China that hasn’t been around for 10 years, but already has a market cap of more than $ 100 billion, and the $ 150 billion multi-service platform Meituan counting over 450 million active users, and companies like these will spring up like mushrooms across industries . “

The Christmas letter bears witness to optimism: “The forecast for the treatment of cancer looks good: The cure for cancer may be closer than you think. Breakthroughs in gene therapy and new applications of artificial intelligence are accelerating drug development. Some types of cancer – may be by 2030 – can be functionally cured by cell therapy. New, reliable tests will enable a very early detection and localization of the development of cancer. After 2030, cancer as one of the main causes of death could be largely eradicated by early detection. “

The next wave of pharmaceutical innovation could come from an entirely unexpected place: “There will likely be many global blockbuster drugs from China by 2030. The country has the largest population of cancer patients in the world, and one in two people is taking a clinical trial, compared to one in 20 in the US. I expect China will start producing new drugs in five to ten years at a tenth the cost of the US. “

The rivalry between the US and China could determine geopolitics: “What felt like an eternity ago, in the time before COVID-19, the trade conflict between the US and China determined the economic framework, but the frosty relations between the two superpowers will also be with the remain one of the most important investment themes for the new US presidents. “

It’s not just about geopolitics. This conflict will also have a direct impact on companies as they will be forced to take sides and perhaps adapt the way they work on both sides. Our investor and advisor reminds you that the US wanted to issue implementing regulations banning the popular TikTok and WeChat apps if the US segments of these companies are not being sold by their Chinese parent companies.

“It is advisable to avoid those players who could get caught in the crossfire, but there are still plenty of great investment opportunities. Chinese internet companies that operate purely on the domestic market, such as Alibaba and Baidu will not suffer from the trade war,” summarizes the capital market expert, “and there are cross-industry innovative startups that were founded by great entrepreneurs.”

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