Ronnie C. Chan, The Buffett Of Hong Kong: His Thoughts On Global Economic Futures

Introduction

John Sheehy of Konecko recently highlighted the writings of Ronnie Chan, Board Chairman of the Hang Lung Group (HNLGF). Hang Lung is one of Hong Kong’s largest real estate developers. Sheehy noted that Chan (like Buffett) has a reputation for writing insightful shareholder letters. I quote Sheehy: “Chan has a reputation for thinking long-term. The company completed its Harbourside luxury apartment tower in Hong Kong in 2004 and held many units off the market until selling them in 2014 and realizing a 78% gross margin due to market appreciation. Chan was an early investor in mainland China. The company completed the Grand Gateway, its first shopping mall and multi-use commercial center in Shanghai in 1999.”

In what follows, I quote Chan (Chan) from the Hang Lung’s 2017 Interim Report. I also comment on what Chan says and suggest possible investment implications (Elliott). 

Chan: “The world has always been a troubling place, but today it is particularly so. The less developed parts have been usually more troublesome than others, and this condition persists. The Middle East situation deteriorates from bad to worse; North Korea keeps everyone alert about nuclear threats; and Venezuela reminds us that Latin America is in general still an unstable place.

Developed economies once boasted stability. Now they themselves are not so sure. Brexit may take a long time to resolve, and no one yet knows the eventual outcome. The refugee problem may not be as hot as it was last year, but the issue has certainly not gone away. In fact, European countries’ reactions to the issue today will affect the Continent for decades to come. Terrorist attacks, long associated with the less developed parts of the world, have now become a common occurrence in Europe.

The United States, which is the most self-righteous country in modern history, now has a president who regularly blurts out facts with alternative facts, and truths with untruths. The media, which has long been regarded as the bastion of the Western concept of liberty, is now daily inundated with fake news. The Internet certainly exacerbates the problem.

Elliott: Chan characterizes the US as “self-righteous.” I agree completely: the US tells all countries they should adopt democratic forms of government. US citizens, relatively uneducated on what is happening in the rest of the world, are watching the Burns/Novick documentary on the Vietnam War and the ill-informed/mistaken policies the US followed. Were lessons learned? No. The US followed that disaster by invading Iraq, an action that led to the complete destabilization of the Middle East.

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Disclosure: I own XIN.

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