I explain the operating system behind my own portfolio — two core buckets, a fair value compass, and the discipline to buy when everyone else is selling.
Interesting angle. I like how you approach companies from broader context and moat to the financials that eventually confirm or reject the stock.
However, I am in doubt about China, not because I try to avoid the country or because I want investors to stick to US stocks. I am concerned about a few things and would love to hear your view as someone with a lot of real life experience in China.
- Independent auditors and transparent accounting: (can we trust the reporting system?)
- Free flow of capital (the government is a majority shareholder and steers investment decisions, the Chinese population cannot move capital outside the country)
- Limited news transparency (in the US or Europe we have no Idea what is going on in China and whether or not it is good or bad for a certain stock)
@The Inside Analyst — fair points, and I'd separate them rather than treat them as one China risk.
Audit quality likely varies, but for US-listed Chinese companies the PCAOB has had full access to inspect mainland and Hong Kong audit firms since 2022. Capital controls are real. The state is also not a majority shareholder across Chinese companies, and HK Stock Connect carries substantial capital in both directions.
The information gap is the harder one. If most of the input comes through English-language coverage, China can look much less knowable than it is. Exchange filings, Chinese-language industry sources, procurement data and time on the ground give a rather different picture. I cross into Mainland China 1-3 times per week from Hong Kong.
None of the above removes the risks. I treat them as part of the underwriting. If I cannot get comfortable with the accounts, movement of capital or the state's role, I do not invest in the company.
Thanks for the deep explanation, will follow your posts closely and see if I feel comfortable with a higher China exposure for my Financial X-Ray portfolio.
What determines whether or not the state is a majority shareholder of a Chinese company?
The two-bucket structure with a fair value compass is essentially a formalized version of what most disciplined investors do intuitively but rarely articulate. The hard part is always the behavioral layer: buying when everyone else is selling requires a pre-committed framework precisely because in the moment the narrative always makes the selloff feel justified. I write about similar portfolio construction dynamics through a macro and quantitative lens.
Thank you, Alessandra. I like the way you have framed the behavioural layer as pre-commitment. If there is one piece where you develop the portfolio-construction angle, would you send it my way? I would be interested to read it.
Fair pushback, but I do not publish actual performance as it's meaningless in isolation. I run a global portfolio built to meet my income and growth criteria over a medium-term period. Everyone has individual investment goals; mine is to fully support my living, which requires a more conservative approach than, for example, someone in their 30s with a salary who can take maximum risk. Because of these distinct goals, raw returns alone don't tell the whole story. I hope this clarifies it a bit.
Interesting angle. I like how you approach companies from broader context and moat to the financials that eventually confirm or reject the stock.
However, I am in doubt about China, not because I try to avoid the country or because I want investors to stick to US stocks. I am concerned about a few things and would love to hear your view as someone with a lot of real life experience in China.
- Independent auditors and transparent accounting: (can we trust the reporting system?)
- Free flow of capital (the government is a majority shareholder and steers investment decisions, the Chinese population cannot move capital outside the country)
- Limited news transparency (in the US or Europe we have no Idea what is going on in China and whether or not it is good or bad for a certain stock)
@The Inside Analyst — fair points, and I'd separate them rather than treat them as one China risk.
Audit quality likely varies, but for US-listed Chinese companies the PCAOB has had full access to inspect mainland and Hong Kong audit firms since 2022. Capital controls are real. The state is also not a majority shareholder across Chinese companies, and HK Stock Connect carries substantial capital in both directions.
The information gap is the harder one. If most of the input comes through English-language coverage, China can look much less knowable than it is. Exchange filings, Chinese-language industry sources, procurement data and time on the ground give a rather different picture. I cross into Mainland China 1-3 times per week from Hong Kong.
None of the above removes the risks. I treat them as part of the underwriting. If I cannot get comfortable with the accounts, movement of capital or the state's role, I do not invest in the company.
I wrote more on how I translate China’s latest Five-Year Plan targets into actual portfolio decisions here: https://www.cohonglane.com/p/china-15th-five-year-plan
Thanks for the deep explanation, will follow your posts closely and see if I feel comfortable with a higher China exposure for my Financial X-Ray portfolio.
What determines whether or not the state is a majority shareholder of a Chinese company?
Income and growth, love it.
Thank you. Glad the income and growth structure resonated.
The two-bucket structure with a fair value compass is essentially a formalized version of what most disciplined investors do intuitively but rarely articulate. The hard part is always the behavioral layer: buying when everyone else is selling requires a pre-committed framework precisely because in the moment the narrative always makes the selloff feel justified. I write about similar portfolio construction dynamics through a macro and quantitative lens.
Thank you, Alessandra. I like the way you have framed the behavioural layer as pre-commitment. If there is one piece where you develop the portfolio-construction angle, would you send it my way? I would be interested to read it.
What was the return for 2025?
I do not disclose the portfolio’s actual return. What I can say is that both the income and growth sleeves met the benchmarks I set for them in 2025.
That answers nothing
Fair pushback, but I do not publish actual performance as it's meaningless in isolation. I run a global portfolio built to meet my income and growth criteria over a medium-term period. Everyone has individual investment goals; mine is to fully support my living, which requires a more conservative approach than, for example, someone in their 30s with a salary who can take maximum risk. Because of these distinct goals, raw returns alone don't tell the whole story. I hope this clarifies it a bit.