When Gree had a market value of 150 billion, investing 15 million meant owning one ten-thousandth of the company. Gree earns over 30 billion a year, averaging about 100 million a day, so holding 15 million in Gree is roughly equivalent to your company earning 10,000 a day. Could you guarantee making 10,000 a day if you started an air conditioning business with 15 million?
Warren Buffett says buying a company's stock is like buying a part of the company. With this one ten-thousandth theory, if you hold 15 million in stocks, you'll find it much more comfortable than starting your own business. It's become very difficult for anyone to start in the air conditioning industry and surpass Gree now that the window of opportunity has passed and the brand has established its scale advantage.
Similar industries include Moutai, soy sauce, milk, and cola. The probability of successfully starting a business in traditional industries is extremely low. Starting a business with 15 million is like a drop in the bucket and is likely to result in total loss. An annual profit dividend of over 3 million is equivalent to having a 100 million deposit in the bank.
Moreover, the 15 million investment in Gree has now increased to 20 million. Some say that trading in the A-share market leads to losses, but that's because it's speculative trading. Value investing is effective in any market.
