Why BIDU and DJT are the only two stocks we're holding?

October 18, 2024 

Why BIDU and DJT are the only two stocks we're holding?

BIDU and DJT are essentially the only stocks we're holding within our "F5" (fun 5%) portfolio because we have been unable to find any values in the current market. We have sold almost everything else, holding most of the F5 fund in cash. Almost every company that we look into appears to be grossly overvalued at the moment. The stock market is due for a correction, and will correct sooner or later. That's guaranteed. Markets are always cyclical; always. For now, we're enjoying holding BIDU and DJT, two super risky holdings for different reasons. 

Part I. Baidu (Ticker: BIDU)

Baidu, Inc. is the Chinese copy of Google. It was founded on January 1, 2000 by Robin Li and Eric Xu. The company is headquartered in Beijing, China. The Chinese Communist Party (CCP) has a tight grip and overview over the company. Baidu is publicly traded on the NASDAQ under the ticker symbol BIDU and on the Hong Kong Stock Exchange as 9888. 

Baidu is one of China’s leading technology companies, primarily known as a search engine giant, similar to Google. Just like Google's parent company (Alphabet), Baidu has expanded from internet search into a variety of other ventures, particularly autonomous driving, cloud computing, and of course, artificial intelligence (AI). As China steals our AI technology, Baidu is one of the pirate companies that stand to gain windfalls from the hack. 

Founders and Leadership

Robin Li is a co-founder, current Chairman, and CEO of Baidu. Li has been pivotal in driving Baidu’s focus on AI and deep learning. Before Baidu, Li developed a technology called RankDex, which served as an early foundation for modern search engine algorithms. Eric Xu is the other co-founder, but he left Baidu shortly after its founding to pursue other ventures.

Baidu started as the Chinese version of Google, operating as a search engine platform. Baidu still dominates the Chinese internet search market, holding almost 70% of the search engine market. Baidu copies not only Google's technology, but also its business model. Baidu provides search-based advertising services, online marketing, and related solutions. Copying Amazon Web Services and others. Baidu is also China's leader in cloud computing and artificial intelligence. Baidu AI Cloud offers cloud services to businesses, including data storage, machine learning, and AI tools. 

Baidu has developed its own voice assistant technology called DuerOS, which is China’s copied version of virtual assistants like Amazon’s Alexa or Google Assistant. The service, called DuerOS, is integrated into a wide range of smart home devices and IoT products, and it provides voice-based interactions for tasks such as controlling devices, answering questions, and media services. DuerOS competes with products like Amazon Echo and Google Nest in the Chinese market.

Copying Google Maps, Baidu offers Baidu Map, a mapping and navigation platform that serves over 300 million users in China. It offers navigation, traffic data, and local business listings, similar to Google Maps.Online Video and Streaming. Baidu Apollo is one of the world's leading autonomous driving platforms. It provides open-source software for autonomous driving, with partnerships across the automotive industry, working on self-driving technologies, and intelligent vehicle infrastructure. 

Copying Google's Waymo, Baidu launched Apollo Go, a robotaxi service, which is operational in several Chinese cities such as Beijing, Changsha, and Cangzhou, and is expected to expand further. Elon Musk's Tesla has actually been trying to copy or learn from Baidu to launch Tesla's robotaxi service in the United States. 

Copying Netflix, Baidu previously owned a majority stake in iQIYI, one of China’s largest video streaming platforms, often dubbed the “Netflix of China.” Baidu spun off iQIYI as a separate company, though it retains a substantial interest in the platform.

Baidu's AI 

Baidy has a significant focus on Artificial Intelligence (AI), positioning itself as the Chinese leader in the field, not just within China but globally. With data on over 1 billion people, Baidu's AI systems can get real smart real fast. 

• Deep Learning and AI Research: Baidu established its Institute of Deep Learning (IDL) and Baidu Research to drive advancements in AI, machine learning, and big data analysis.
• Baidu Brain: A comprehensive AI platform that provides developers with a toolkit for AI services such as speech recognition, facial recognition, and language processing.
• Natural Language Processing (NLP): Baidu has developed advanced NLP technologies, which are at the core of their search engine and other AI-powered services.
• Baidu has heavily invested in AI through collaborations with top research institutions, hiring global talent, and forming partnerships with universities and research labs across the world.

Baidu knows how to make money 

Baidu copies all the Big Tech money-making ideas generated in the West plus creates its own. Baidu also copies Amazon Web Services and Baidu's AI Cloud is a growing part of its business and represents a move towards enterprise services, reflecting global trends in cloud and AI demand. Baidu's promising ventures include AI-powered services including healthcare diagnostics and financial technology (fintech) services. Baidu is positioning itself as a global leader in autonomous driving, aiming to commercialize robotaxi services in China and possibly expand internationally to create smart cities worldwide. Baidu's cloud computing business is also a major growth area.

Baidu's Future 

Baidu is not going anywhere. Chances are that within the 30 years, Baidu will continue finding ways of making more and more money. At the current valuation of about 12 times earnings, BIDU looks like a steal in comparison to US Big Tech firms. 

Of course, holding BIDU is risky due to geopolitical concerns and the stock may be even banned in the United States at some point in time. However, if normal diplomatic and commercial relations between the United States and China continue as of now, Baidu's value proposition is unique and very promising.  

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Part II. Trump Media & Technology Group (TMTG) 

Trump Media & Technology Group (TMTG) is a social media and technology company founded by Donald Trump and other suckers. Twitter removed Trump following his failed insurrection attempt. The man decided to set up its own Twitter. Whether you love, hate, or both love and hate Trump, you have to admit that the guy has some dark energy and wild fire in him. 

As the founder and Chairman of TMTG, Trump plays a prominent role in shaping the company’s direction, strategy, and public messaging. His presence is a key draw for users on Truth Social, where he regularly posts. Devin Nunes, a former U.S. Congressman and Trump ally, is the CEO. His leadership focuses on operational development, expansion, and managing the company’s public relations efforts.

TMTG's Mission and Vision

TMTG's mission is to challenge what it sees as the monopolization and censorship of major tech platforms (like Facebook, Google, and Twitter) by providing a platform that promotes free speech without heavy moderation policies. It aims to create a media and technology ecosystem that is "free from the tyranny of Big Tech." The company's vision is to offer users more control over their content, claiming to offer a more open and balanced online conversation for conservative and free-speech advocates.

TMTG has partnered with Rumble, a Canadian video-sharing platform that markets itself as a free-speech alternative to YouTube. Rumble provides cloud infrastructure and video hosting services for Truth Social, ensuring that TMTG’s platform remains independent from mainstream tech companies

TMTG Ventures

Truth Social is the flagship product of TMTG. Launched in early 2022, Truth Social is a copy of Twitter aimed at MAGA losers and other conservatives including Russian and Chinese intelligence operators. Truth Social copies Twitter, allowing users to post "Truths" (equivalent to tweets), share content, and interact with others. Truth Social's value proposition is to be the alternative or counter position to the other social media platforms that supposedly censor conservative viewpoints.

In addition to Truth Social, TMTG announced plans to develop TMTG+, a subscription-based streaming service. TMTG+ aims to compete with streaming giants like Netflix, Hulu, and Prime offering what the company describes as "non-woke"(conservative, anti-liberal) entertainment. TMTG+ is expected to feature news, documentaries, entertainment shows, and possibly content aligned with conservative values, though as of the latest updates, the service is still in development.

TMTG has also expressed interest in raising funds to pursue broader technology ventures, potentially expanding into sectors such as cloud computing and, of course, artificial intelligence (AI). Trump AI, imagine that. 

Truth Social is doomed to fail

From a business standpoint. TMTG’s long-term financial success depends on its ability to scale Truth Social, launch TMTG+, and diversify its revenue streams. As a startup in a highly competitive sector, the company faces challenges in securing sustained user growth, advertising revenue, and subscriptions for its planned services.

Truth Social’s user base remains relatively small compared to mainstream platforms, and there have been concerns about its ability to scale effectively and retain long-term engagement. Truth Social and TMTG face significant competition from other conservative-friendly platforms like Parler, Gettr, and Gab, all of which cater to similar audiences. These platforms are competing for the same user base, making it difficult for any single platform to dominate. Additionally, major platforms like Twitter (now owned by Elon Musk) and Facebook have made changes to their content moderation practices, which may draw back some of the users who left these platforms.

TMTG's May Still Prosper 

If Trump wins the elections, TMTG (NASDAQ ticker: DJT) may increase in value. The company and the meme stock may become a "sophisticated" money-laundering for the Trump empire and the Art of the Deal. 

CONCLUSION

Why in the world are we holding onto BIDU and DJT? 

It's fun. DJT will become a penny stock if Trump loses the elections. However, we think that Trump will win the elections and that TMTG (DJT) will rise in value, at least for a couple of years before Trump is impeached for good. BIDU is a risky investment because it's a Chinese company. However, we think that China will remain to exist and co-exist with the West. A few decades from now, BIDU will most likely still be around and be worth significantly more than what it is today. Who knows? Nobody.

Now you know it. 

Live well. Die better. Enjoy.

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