Christopher Tsai is President and Chief Investment Officer of Tsai Capital Corporation, a global equity manager headquartered in New York City. He founded the company in 1997 and serves as Chairperson of the firm’s advisory committee. Mr. Tsai excels in developing his thematic approach to investing to high performing investments in his portfolio:
“Our goal is to find high-quality growth companies that have significant upside potential and margin of safety at the time of purchase. We look for discounts to intrinsic value. And there just aren’t a lot of investments that meet all of the fundamental and qualitative characteristics that we look for in an investment. So we do a significant amount of research upfront, we are very patient, and we wait for the opportunity to buy at a discount.”
One such theme is the growth in the incomes of ordinary people across Asia. “The middle-class population in Asia is booming. From 2009 to 2030, the middle class is expected to increase from 525 million people to 3.3 billion. And what’s interesting about that is the spending power of that group is expected to increase from $5 trillion to $33 trillion. It’s a huge increase in wallet power by this segment of the population.”
This plays out into several specific stock holdings: “…as people get wealthier, the natural inclination for investors is to think about luxuries, but we don’t think about who might be able to buy a new car, because not everybody can. We think about simple luxuries like dining out, and Yum China (NYSE:YUMC) fits very much into this long-term durable tailwind.”
The company carries several important sustainable competitive advantages. “It’s a technologically savvy company. And one of the reasons it’s technologically savvy is because Ant Financial, which runs Alibaba’s (NYSE:BABA) Alipay mobile payments platform, is one of their partners. They actually invested $50 million during the recent spinoff of the company from the parent Yum! Brands (NYSE:YUM) in the States.”
To see all of Mr. Tsai’s in depth investment analysis and a review of his current top investment holdings, read the entire interview at the Wall Street Transcript.
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