Investing Curiouscatblog

Tag: lifestyle

  • Tencent Gaming

    Tencent is one of the stocks in my 10 stocks for 10 years portfolio. In fact it is my largest holding (when you consider that Tencent shares owned by Naspers. Some others have performed better since my reboot of the portfolio in August of 2018: Apple (from 225 to 318) and Danaher (from 103 to 162) and Naspers (33 to 34, which might not seem so great but 2 spinoffs provide another 15) but I still like Tencent a great deal for the next 8 to 10 years.

    Tencent has quite a few huge global businesses. One of the most promising areas is Tencent Gaming. Tencent has ownership in many of the largest computer gaming companies globally.

    people playing computer games
    image by Fredrick Tendong

    Tencent’s ownership share in Gaming companies

    • Tencent Games – Honor of Kings (Arena of Valor outside of China) and esports leagues
    • Riot Games (100%) – League of Legends and esports leagues
    • Supercell (84%) – Clash of Clans, Clash Royale, and Brawl Stars
    • Epic Games (40%) – Fortnite and Unreal Engine (gaming engine used to create many games)
    • Activision Blizzard (5%) – Call of Duty, World of Warcraft, StarCraft, Diablo, Hearthstone, Heroes of the Storm, Overwatch, Guitar Hero and Candy Crush. They are also involved with esports. (Activision Blizzard is a public company in the USA valued at $46 billion)
    • Ubisoft (5%) – Assassin’s Creed, Far Cry, Just Dance and Prince of Persia. (public French company worth $8.7 billion)
    • Grinding Gear Games (80%) – Path of Exile
    • Glu Mobile (14%) – many smaller games (public USA company valued at $915 million)
    • Bluehole (12%) – PlayerUnknown’s Battlegrounds
    • Paradox Interactive (5%) – Stellaris, Europa Universalis, Hearts of Iron, Crusader Kings, Cities: Skylines (public Swedish company valued at $1.2 billion?)
    • Funcom (29%) (public Norwegian company valued at $145 million – after the stock price increased last week due to a Tencent a buyout offer)
    • Sumo Digital (10%)

    Tencent also have an undisclosed majority stake in Miniclip. And they own large portions of Huya and Douyu, both are big players in streaming games (similar to Twitch and YouTube Gaming).

    Tencent’s subsidiary, TiMi Studios, developed Activision’s Call of Duty: Mobile.

    Tencent gaming revenue struggled in 2019 due to regulatory actions in China created problems for all game publishers there. Long term global gaming revenue should continue to grow quickly and Tencent stands to be one of the best positioned companies to profit from that trend.
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  • Survey Data on Boomers Experience with Working During Retirement

    A new study, Secure Retirement, New Expectations, New Rewards: Work in Retirement for Middle Income Boomers, explores how Boomers are blurring the lines between working for pay and retirement (as I have discussed in posts previously, phased retirement).

    From their report:

    Middle-income Boomers working in retirement describe an experience different than their work experience before retirement. Most Boomers look for more flexible work arrangements and scheduling, and many try new career paths in different industries. In addition, middle-income Boomers working in retirement find that they are highly satisfied with their work, even more so than they were with their work before officially “retiring.” In exchange for this flexibility and satisfaction, retired Boomers are willing to work for less money than they were making before retiring.

    The define middle income as income between $25,000 and $100,000 with less than $1 million in investable assets and boomers as those born between 1946 and 1964.

    Nearly 70% of retirees retired earlier than they planned to. Many did so due to health issues. Only 3% retired so they could travel more.

    48% of middle income boomer retirees wish they could work. For those wishing to, but unable to work: 73% cannot due to health, 17% can’t find a job and 10% must care for a loved one.

    Only two in ten (21%) nonretired Boomers would be willing to take a pay cut for their work in retirement, while more than half (53%) of currently employed retirees report making much less per hour in retirement.

    Nearly all (94%) nonretirees who plan to work in retirement would like some kind of special work arrangement, such as flex-time or telecommuting, but only about one third (37%) of currently employed retirees have such an arrangement.

    It seems to me, both employees and employers need to be more willing to adapt. Workers seem to be more willing, even though they claim they are not: this is mainly a revealed versus stated preference, they claim they won’t accept lower pay but as all those that do show, they really are willing to do so, they just prefer not to. This report is based on survey data which always has issue; nevertheless there are interesting results to consider.

    61% of middle income boomers who ware working say they do so because they want to work, not because they have to work.

    Of middle-income retirees who are currently working, nearly two-thirds (63%) took six months or less off between the start of their retirement and the start of their employment in retirement. In fact, more than one-third (35%) continued working immediately after they retired.

    Only 12% of working middle income boomer retirees work full time all year. 60% work part-time. 7% are seasonal while 16% are freelance and 4% are other. Of those identifying as non-retired 75% work full time while 17% are part-time.

    49% plan to work into their 70’s or until their health fails.

    51% are more satisfied with their post-retirement work than their pre-retirement work. 27% are equally satisfied with their jobs.

    As I have stated in previous posts I think a phased approach to retirement is the most sensible thing for society and for us as individuals. Employers need to provide workable options with part time work. The continued health care mess in the USA makes this more of a challenge than it should be. With USA health care being closely tied to employment and it costing twice as much as other rich countries (for no better results) it complicates finding workable solutions to employment. The tiny steps taken in the Affordable Care Act are not even 10% of magnitude of changes needed for the USA health care system.

    Related: Providing ways for those in their 60’s and 70’s (part time schedules etc.) – Companies Keeping Older Workers as Economy Slows (2009) – Keeping Older Workers Employed (2007) – Retirement, Working Longer to Make Ends Meet

  • The USA Doesn’t Understand that the 1950s and 1960s are Not a Reasonable Basis for Setting Expectations

    After World War II essentially the only significantly large industrial base was in the USA. The USA was emerging as a national power in the early 1900’s. The wake of World War I and World War II left a very odd situation. You had many formerly very rich countries that were devastated and one rich country that wasn’t. Devastation is not easy to overcome in even 20 years. So for a good 2 decades the USA got wealthier and wealthier even while other formerly rich countries were re-developing their countries rapidly.

    This made the USA even richer as selling to all those around the world was pretty easy, just creating enough stuff was the hardest part. Almost none of the current emerging markets were doing much of anything economically. This resulted in the USA being able to live incredibly well and generate enormous wealth.

    The main legacy of this is a huge benefit to the USA – enormous wealth and experience. However, it seems to have left people thinking the USA is just suppose to be enormously wealthy always no matter if we throw away hundreds of billions a year on a broken health care system, provide huge benefits to political donors (farmers or bankers or phone oligopolists or robbers of the public domain [preventing innovation through repressive, outdated “intellectual property” regimes]), spending many hundreds of billions yearly on military expenditures far beyond those of any other country… It doesn’t work that way.

    You can waste huge amounts of economic benefit when you are the dominant economic power globally. And when you were as rich as the USA was in the 1950s and 1960s more and more people felt they deserved to be favored with economic gifts. So for a a few decades the USA used the excess wealth to pay off all sorts of special interests and still do very well economically. The only thing surprising is how long we have been able to keep this up.

    It isn’t rational to base expectations on periods when we were granted economic wealth largely by virtue of the world industrial production, other than ours, being destroyed. This isn’t the only reason we were wealthy, we do many things very well (compared to other countries) entrepreneurship, less corruption (still way too much but less than average), from 1950 to about 1990 an equitable distribution of economic gains, until recently a good advanced education system, a brilliant system to turn science and engineering breakthroughs into economic profit (that in the last few decades other countries are starting to do, but they are still way behind)…

    From 1970s until say the 2000s we could use our accumulated wealth to live off and allow huge inefficiencies to continue (lousy job of regulating banks, lousy job of subsidizing farming, lousy job of subsidizing lousy food [making it cheap to eat unhealthy food and expensive to eat healthy food], lousy job of controlling the costs of higher education, lousy job of getting people to realize they cannot expect to live far beyond most everyone else in the world just because they were born in the USA…
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