Duan Yongping: Buying Moutai & Tencent is Better Than Saving in a Bank

CNBC AI News, July 22nd – Renowned investor Duan Yongping has reiterated his stance, stating that investing in high-quality companies like Kweichow Moutai and Tencent is, in the long run, a significantly more advantageous strategy than simply parking cash in a bank account.

In response to a question from an investor who, citing the high price of Moutai shares, inquired about the prospects of holding China Shenhua Energy for a decade compared to a bank deposit, Duan offered his perspective.

Duan acknowledged that while Shenhua might not possess the same allure as Moutai, it remains, in his estimation, “highly likely” to outperform keeping funds in a bank. He emphatically reinforced his position, stating: “Buying Tencent is definitely better than putting money in the bank.”

He further elaborated, cautioning against dismissing the merits of merely surpassing bank returns: “Over eighty percent of people lose money in the stock market, so simply doing better than a bank is actually a rather luxurious outcome.”

Moutai, as the undisputed leader in the baijiu (white liquor) industry, benefits from a powerful brand moat and consistently strong cash flow. Tencent, having cultivated a dominant position in the internet sector over many years, boasts a vast and interconnected ecosystem, characterized by high user stickiness and exceptional monetization capabilities. These companies, commanding leading positions in their respective industries, demonstrate robust resilience and possess the potential for sustained value creation in the long term.

Conversely, bank deposit interest rates are highly susceptible to macroeconomic fluctuations, and long-term returns often struggle to keep pace with inflation, making it challenging to preserve and grow wealth effectively.

Of course, investing in even the most reputable companies’ stocks isn’t without inherent risks. Market volatility and evolving industry dynamics can impact short-term returns.