An article "What you need to know about Jack Ma's Ant Group as IPO looms" reinforces my belief that investing in equities on your own is no longer easy. The article gives you a glimpse of the rapid changes to how the commercial world functions. If we do not keep ourselves abreast of the companies we invest in, they may ride to the sunset before we know it.
We all know that the Alipay app, an offshoot of Alibaba, is the key payment app in China, but we may not know about other financial units under its umbrella. I am amazed at these other business units and how they impact the mass consumers.
Alipay has 711 million active users who use it to pay for consumer items including even property. That aside the Ant Group has 2 units that facilitate small unsecured loans for consumers. Interestingly named as Huabei (花呗 or Just Spend lah) and Jiebie (借呗 or Just Lend lah), they offer loans to around half a billion people. The bulk of the loan is financed by banks although Ant Group also uses its capital, ie. it is more like a platform for small consumer loans and credit card for the masses.
Another exciting unit is Yu'ebao (余额宝The Great Stash). With assets up to US$170 billion, it is one of the world's largest money market fund which allows people to park money as little as one Yuan with the app and earn interests. What I find most interesting is Ant Group's credit scoring unit Zhima Credit ( 芝麻信用 )which checks the credit worthiness of individual consumers based on its vast data on consumers' spending and lending pattern. Consumers can opt in for the credit rating and if assigned a good credit rating maybe exempt from paying deposits on certain transactions.
In short the Ant Group is like an fintech ecosystem offering users' access to fintech solutions that cover payment, money transfer, loan, investments and even low premium insurance.
What rattles me is the way we used to invest, focusing on banks and blue chip companies. Gone are the days when you buy and hold a blue chip stock, receive the yearly dividend and don't even attend the AGM or read its annual report. We must now find out whether the bank stocks we hold have adopted digital banking fast enough so as not to be phased out by other fintech providers. The same applies to any company. We need to constantly watch whether it has adapted fast enough to a rapid changing world. We must find out whether its management is agile enough to evolve and shift with ever changing market demands. Think industry disruptors like Airbnb, Grab, Netflix and Spotify. Those of us who have held onto SPH shares would have regretted not being abreast of the rapid falling readership of newsprint and declining revenue from print advertisement. The same goes with departmental stores and postal services, the like of Metro and Singpost.
Certainly managing your own stock portfolio takes a lot more time and energy than years ago. However, if investing money is a hobby it can still be worthwhile . The added incentive other than the monetary return is to delay the onset of dementia. Well,if playing mahjong is recognised as a cognitive demanding activity to slow dementia, looking after your stock portfolio should certainly be more effective.
You would have to be on a constant look out for disruption to the companies you invest in.
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