Home Finance Fred Liu – 100% Gains in 6 Years

Fred Liu – 100% Gains in 6 Years


He broke down his simple strategy to pinpoint 2 stocks that grew 10-times within just a few years.

Liu employs a concentrated, long-term, and value-centric approach to investing. At any given time, his portfolio consists of just a handful of positions, usually in the range of six to 15 stocks.

Warning: with that type of concentration comes volatility. Choose wrongly and one can lose heavily.

“These two investments in Sea Ltd and Amazon, achieved this feat in less than 2 years and 6 years, respectively.”

Since Amazon is a household name in the west, let us take a closer look at Sea Ltd.

Sea Ltd is an Internet platform provider. The company has developed an integrated platform consisting of digital entertainment, e-commerce, and digital financial services. The Company operates three businesses – Garena, Shopee, and SeaMoney. Their headquarters are located in Singapore.

Diversifying as a Key to Success

The strategy Liu uses (and anyone can use) is obvious – witness the market’s increasing appreciation of the company. However, more importantly is company’s trajectory demonstrated through multiple expansion.

Just as investors need to have a diverse portfolio, the investments in that portfolio should also be diverse. Jeff Bezos a long ago saw that he needed to sell than just books.
Seagroup meets the qualification. Currently, their stock is selling for less than $150. Tencent, an affiliate, is valued at about $500 per share. Seagroup’s stock rise seems like a pretty safe bet – barring any new natural disasters.

Rakuten, Inc.

rakuten-minOn that same subject is another Asian company that is seeking its share in the world market – “Rakuten” is the Japanese word for “optimism”. It is a Japanese electronic commerce and online retailing company based in Tokyo. It was founded in 1997 by Japanese businessman Hiroshi Mikitani. Its E-Commerce platform Rakuten Ichiba has become the largest e-commerce site in Japan. They also operate Japan’s largest Internet bank and are the number one credit card company by transaction value. They currently have businesses based in about 30 different countries and regions.

Rakuten is a competitor of Amazon and Alibaba. Whereas Amazon handles everything for the merchants, Rakuten leaves the work of inventory, logistics and customer service to the merchant. Rakuten is more loyalty-driven by offering consumers direct benefits through cash back and “super points.” Amazon’s real point of contention is that they sell their own products in competition with their sellers. Rakuten does not compete with their own sellers – this of course means less profit, but also less law suits.

Socially responsible: In March 2014, they were criticized for being the world’s largest online retailer of whale meat and elephant ivory. Within a month, they announced that they would end online sales of the meat. The end of ivory sales did not take place however, until three years later.

They now also have Rakuten Wallet, which allows customers to trade their “super points” for buying Bitcoin and Ether.

Their stock has split four times since the year 2000.

PWM-APAC-SUMMIT200x200Rakuten has seen its stock price go as high as 2,200 JPY. It is currently hovering around 950 JPY. Although their stock has slumped in recent years, their expansion into other markets may pave the way for a huge success.