Zhitong Special Offer | What are the implications of Duan Yongping's recent continuous remarks for our stock operations?

Duan Yongping is a spokesperson for value investing and long-term principles. His famous quote is “To buy stocks is to buy a company.” What makes a good company? In an open interview, he once mentioned the most important dimensions of a company: business model, competitive pattern, and corporate culture. As for A-shares, everyone knows that he is optimistic about Maotai. However, since September, Duan Yongping has only actively discussed three stocks on social media, all of which are Hong Kong and US stocks: Tencent (00700), Apple (AAPL.US), and Occidental Petroleum (OXY.US).

Let's take a look at Tencent first.

The latest release was “Not Open?!” on October 11th I wanted to sell some before going to bed”.

An option is a financial contract that provides the holder with the right to buy or sell an underlying asset at a specific price in the future without actually owning the asset. Call option call and put option put are two basic types of American options. Buying and selling each represent four different market attitudes —

o Buy call: bullish

o Sell Call: Not bullish

o Buy put: expect a sharp decline

o Sell put: bearish or not

Among them, selling a put option means two possibilities:

(1) If the price of the expired stock is higher than the exercise price, the buyer relinquishes the exercise and the seller earns a net premium.

If it is a small increase, and the increase cannot cover the premium, then the return on investment outperforms buying stocks;

If it is a big increase, you can only eat premium money and not be able to obtain higher profits, which is equivalent to going short.

(2) If the maturing stock price is lower than the exercise price, then the buyer needs to buy the stock at the exercise price. The specific profit and loss depends on the difference between the premium and price difference.

If the premium still has a surplus after deducting the decline, then it is still profitable;

If the decline swallows up the premium, it is a loss, but the loss is also a loss compared to the stock market price; in fact, it is still a purchase of the corresponding stock assets.

In summary, a sell put will only lose money when it falls sharply. The condition for it to be profitable is that the stock price falls or rises slightly within the range covered by the premium, that is, it is bearish or not bearish.

On October 10, Tencent traded at around 438 yuan, down 9% from the recent high of HK$482. Duan Yongping wants to sell Tencent PUT, which indicates that he sees Tencent “not falling” in the short term. HK$438 is already a relatively safe position. As far as the long term is concerned, Duan Yongping is a “dead long man” at Tencent. His goal is to buy “1%” of Tencent within the next few years.

Apple (AAPL.US)

“My iPhone 16 pro max often stutters and is a bit inconvenient to use. It feels like there's some major upgrade in progress.”

“Bought two new Apple watches. I found out today that I really can't measure oxygen, so I had to go back to my old watch. I checked Gemini and found that new Apple watches bought after January 18, '24 can no longer use this function. I'm sure Apple will solve this problem in the future, but I'm still a bit disappointed that this was not mentioned at all when the new Apple Watch was released.”

“The AirPods Pro 2 arrived today and I bought them online on Monday. The noise cancellation is excellent, and calls and listening to music in very noisy places are completely unaffected.”

“This generation of watches will have a major upgrade: sleep apnea testing. The watch will detect whether the wearer has sleep-breathing disorders and make recommendations for medical treatment.”

According to Duan Yongping's second-quarter holdings disclosed by the SEC, Duan Yongping's US holdings of H&H International Investments showed that the account held only 9 shares. Among them, Apple was definitely the largest “favorite stock” in the US stock market with about 80% of the market capitalization, but it slightly reduced its holdings by 658,000 shares in the second quarter.

Coincidentally, Buffett's Berkshire also cut its Apple holdings in the second quarter.

These statements are, as always, a follow-up to Apple's latest product developments. It can be seen that he was a little disappointed with Apple's recent press conference and had a slightly unpleasant experience using the product.

Although Duan Yongping “believes Apple will solve this problem in the future,” investors can trust that Duan Yongping, who has been tracking Apple products, will continue to reduce his holdings if these individual product issues have not been solved.

Occidental Petroleum (OXY.US)

“I bought the oil and gas index many years ago, and later discovered that the item had been worn out for a long time, so I quickly sold it at a loss of money. At the time, I thought I could buy some oil and gas if I had the chance, but I didn't know how to store it. When I saw that Lao Ba bought Occidental Petroleum, I was reminded of my wish back then: buying an oil field (or part of it) is a method that can be implemented. I always feel that petroleum resources are resources that will run out sooner or later, and that they will become more and more expensive in the future, but I don't know how long the future will be. I took the opportunity to buy some this time, and I'm going to spend 10 or 20 years to see what happens. I don't really dare to take a heavy position; it's an attempt I can afford to lose.”

“Oil resources will become more and more expensive,” so we are preparing to take 10 to 20 years. You can seize this “opportunity” because it is below 50 dollars, which is the lowest price position in the past two years. But “I don't really dare to take a heavy load” — because this is Buffett's job.

After reading Duan Yongping's recent comments above, do investors who want to copy Duan Yongping's work already know how to copy it?