China's Chemical Dominance + A simple, yet tough rule of investing.

Sep 08, 2023 12:46 am

Good morning my dear readers,

First of all, a belated Happy Janmashtami everyone🙏.


China controls the Chemical cycle and the rules have changed.

I was talking to a couple of importers from the chemical industry and they seemed of the opinion that China completely 'own' the Chemical cycle.


I personally too feel that the chemical cycles will be more frequent and shorter henceforth.

China will shut off the taps and let the prices recover from time to time, only to flood the market once the prices have recovered enough.


The Chemical sector will be volatile going forward is what I think.

If you must make investments in Chemical companies, try and own a basket of stocks and do regular 'buy on dips'.

Own good companies.


Good things take time.

Most people want to get a return on their money, very very quickly but when it comes to the investing world, thats not the best approach.

Taking your time is usually the better bet.


I came across some data that if you would have invested in the S&P500 anytime between the 1950 to 2022 and if you would have pulled out your money within 1 week, there would be a 46% chance that you would lose money.

But if in that same period, if you would have left your capital in for 15 years, there would be a near zero percent chance you would have lost money.


Sometimes, history can teach us many things.


Basically the more 'TIME' you spend in markets, the better your chances of making profits become.

It is practically a Science and a simple one at that.

But unfortunately, this is not widely practiced. Most new investors take their profit and run at the first chance.


Continuing the above topic a bit longer..

Did you know that Softbank invested $20 million in Alibaba in 1999 and it became $150 Billion!

Must be the greatest win of all time.


A very large component of Softbank's $150 Billion profit was the 'Time' they invested in Alibaba.

So, one key learning for investors is to identify some core portfolio companies and hold on to those as long as you 'Truly Believe' in them.


Personally for me, something from my unlisted portfolio like Blue Tokai Coffee, I may never sell.

Personally, I have not seen a better business than this in QSR.

(I may be proven correct or wrong, I do not know. Luck also plays a role. But, If we do not invest serious amount of 'TIME' in what we TRULY BELIEVE in, we wont be able to create incredible returns).

Ps- I fear this post could get misunderstood. You must TRULY BELIEVE in a company before you try this tactic. Do not end up retaining a commodity stock, it will only disappoint you.


But yes, most of the legendary investors, if see think about RJ - he held his core positions for decades.

Same goes for Warren Buffett, never sold the companies which he 'Truly Believed' in, like See's Candy for example.

Replacing special companies with equally special companies can be tough (maybe impossible task), hence most of the legendary investors, once they identified a great business, just held on to them for a very long period of time.


Ps- Holding 'real Long Term' with regular SIP, doing this in ETFs or managed funds, could be a good tactic too for folks who are not 'full time investors'.


That is all from me today my friends. Hope this helps you.

Enjoy the weekend ahead. See you next Friday =)

My Best,

Neil Bahal


Negen Capital

Ps- I have been walking 10,000 steps daily recently. I think this is a very simple, yet effective form of exercise for most of us.

Whats your favourite exercise?