New long term holding TCEHY (51.89) Tencent

Tuesday we plan to continue a couple of investing themes when we start a long term holding in the shares of China's Tencent Holdings limited. (TCEHY 51.89) Aside from a 30% profit margin, 50% revenue and earning's growth, I'm a fan because Tencent had the wisdom to buy $5 billion worth of TSLA at lower levels than it's currently trading. That holding alone could be worth $100 billion in ten years, making this investment with a $480 billion cap look like a value.

The themes to which I referred are:

1) Investing in larger capitalizations 

Once upon a time I foolishly believed in order to achieve growth one had to take a lot of risks. So, it was not uncommon of me to deal with stocks in the hundreds of millions or even smaller. Today, I really do prefer trading and investing in companies valued at at least one billion.  In many cases, this is something akin to a "certificate of quality" that I often insist upon. At present, we've only two companies under $1 billion in the portfolio. (VERI 20.50 and KSHB 5.50).

We like the $10-30 billion market cap area very much. These companies have worked so hard to get to 11 digits and now have many advantages, they formerly lacked, with more size and power which makes them great candidates to grow several times over in their attempts to hit 12 digits. 

Another favorite category of ours is large caps, those 12 digits and up. TCEHY becomes our third holding in this category, joining AMZN and NVDA. One thing our large caps have in common is growth. Do not get it twisted, these guys provide ROI. If you've any doubts, just check the charts over the last five years to get a glimpse into the future because our large caps are just getting started. 

2) The China Strategy/Emerging Markets

We have long believed in the economic miracle that is China's economy, and today we're more impressed than ever. Don't let politics distract you, there's a lot of money to be made in the word's most populous country. Seeking to add DIDI, the ride-hailing service, when it IPO's either late this year or sometime in 2019 and already invested in IQ (21.75), the Netflix of China. 

We see TCEHY as an economic power-house and a life-long holding and we could not be more excited about getting this party started.