According to the latest Forbes list, LV's Bernard Arnault became the new richest man in the world, with Elon Musk and Jeff Bezos ranking second and third respectively. This matter has attracted widespread attention, among which the more heated topic is that the richest people in the world in the past few years are mainly technology giants, traditional industries are very rare, the logic behind everyone knows, technology giants imagination and explosiveness are relatively strong, so it is easy to give a higher valuation, traditional industries are more difficult, it needs to really use performance to prove their long-term growth, the process is more difficult.
The boss of LV Group became the richest man in the world, in fact, thanks to Tesla's Musk, because last year, Tesla's market value fell by more than $700 billion, and Musk's net worth plummeted from $340 billion to about $140 billion, creating human history, which is the first individual in human history whose wealth fell by $200 billion.
There are two main reasons behind the change of ownership of the richest man.
The first is, how did LV get to the top? Why in the two or three years of the spread of a global epidemic, LV's overall revenue performance is rising against the trend;
The second question is why Tesla and Amazon have plummeted.
First of all, how did LV Group rise in wealth by 50 billion, allowing Bernard Arnault to become the richest man in the world? After the outbreak of the new crown epidemic, in fact, the luxury industry, like other industries, was first hit, and the overall business performance was declining and plummeting.
But in the process of recovery, the luxury industry has a head start on two aspects, the first is the Veblen effect. In other words, it boosts its revenue by raising prices. But the basic principle of economics is: price and demand are inversely proportional, that is, if the price of a commodity rises, no one will buy it; If the price is lowered, the more people should buy.
But the luxury industry has its own characteristics, that is, the Veblen effect, in a certain range, if the price is raised, its sales are increasing. The main reason is that the concept of conspicuous consumption behind the consumption of luxury goods. That is to say, I buy this luxury product not to see its good quality, nor to see it practical, the core reason is to be different from others, hope to show my wealth by buying this thing, or my identity and status. This appeal will lead to the fact that when the price of goods rises, the purchase volume of the customer it originally targeted will rise. Once the price is reduced, or even discounted, no one may buy it, and there may be some sales in a short period of time, but in the long run, loyal customers may be lost, which is the luxury industry.
Second, after some other advanced economies, especially the United States, Europe and other countries liberalized, the entire consumer industry did not recover immediately. Due to the balance sheets of many residential sectors during the epidemic, many individuals are shrinking, simply put: there is no money, no consumption.
But the luxury industry does not have this problem.
For example, among the world's major luxury groups, ultra-high-net-worth customers generally require an annual income of more than 10 million, or even 20 or 30 million; Generally speaking, high-net-worth clients also have to reach an annual income range of 5 million to 120 million. Further down, for example, my annual salary of 500,000, 3 million to 5 million annual income below belongs to the non-income group, most of us, for luxury goods, belong to the non-income group. So it is not surprising, for example, that the average person does not have luxuries, the main reason is that the income may indeed not be enough.
So you will see a problem here, when the epidemic has just been released, luxury goods in other major developed economies are consumed relatively quickly, faster than general consumer goods, the main reason is that the target customer group of luxury goods is very little affected by income, because their income may be very high, do not care about buying a 51,000 yuan bag, there is no problem of whether to buy or not. Having money and willfulness has created LV's performance in the past two or three years, which has been rising against the trend, and the overall performance is very good.
Looking at Tesla on the other hand, it encountered several problems. In the short term, first of all, sales are below expectations; The second problem, due to the impact of the competition of new forces in car manufacturing, Tesla has been cutting prices for a period of time recently, and then adjusting the price less than expected, we can imagine that there may be some problems in revenue and profit, which is a short-term problem.
Of course, Tesla has also faced some medium- and even long-term problems recently. For example, Tesla's factories are mainly California, Texas in the United States, as well as Berlin in Germany, Shanghai in China, in general, the distribution of factories in developed economies is more, but some global new energy car manufacturers that compete with it, of course, are mainly China, and its production capacity is mainly distributed in emerging market countries, mainly China; Overseas, such as India, Thailand, Vietnam, Malaysia, and many other ASEAN countries such as Iran, we have some assembly plants, and some spare parts production plants. If we look at it longer, it should be said that the cost of new forces in car manufacturing may actually be a little lower, of course, it is not obvious now, mainly because Tesla's sales are too high, more than 1 million sales, through scale effect to dilute the cost.
The second long-term problem is that in terms of technology, Tesla is not very dominant, and even some aspects are disadvantageous. The three major components of new energy vehicles, motor, electronic control, battery, now speaking, the technical level of China's battery is relatively high; In terms of motors, the technical level of Chinese motors is also ranked high in the world. But Tesla is not outstanding in this regard, everyone says that Tesla's intelligent driving has no competitors in the world, this aspect is indeed more prominent, but there are some problems. First of all, Tesla's intelligent driving cannot be used in China, of course, not only China, but also in many countries around the world, the use of Tesla's intelligent driving is also facing many policy restrictions; Another aspect is that the adaptation of intelligent driving in the crowd also needs a time process, such as me, our family sits in this car, I give it to the robot, to the AI system to solve the safety problem, but I have driven for more than 20 years, may not trust the robot very much.
The third problem, the global automotive industry may now face a relatively large downward cycle, the past global automotive industry cycle about 2015, 2016 upward reached a relatively high peak, 2017, 2018, with the introduction of Euro IV emission standards in Europe, China launched some subsidies for small emissions and new energy, the global industrial cycle has a relatively large downward process. After the fourth quarter of 2019, the entire industry cycle began to pick up; In 2020, there were originally many friends who thought that it was better to take the subway and bus, so they did not need to buy a car, but after the outbreak of the new crown epidemic, people's living habits have changed, and many people go to buy their own car, mainly because they do not want to take public transportation, and there is a risk of cross-infection with everyone. So we see that the auto industry cycle is booming again, about 2-3 years. But we see that around August and September last year, the global industrial cycle had a downward process, when Buffett reduced some stocks of new energy vehicles, in fact, at the very peak of the industrial cycle, the entire industry is expanding, whether it is revenue, profit or capacity, at this time the market gives a valuation is also the most imaginative.
The fourth problem is the global economic recession. The global economy, led by the United States, may accelerate its decline in the second quarter of 2023, which is even worse for the entire industry and Tesla, and it is a negative impact.
To sum up, Tesla's stock price has fallen last year, but in the short term we think there may still be some risks.
Another question is, why did Amazon plummet? Amazon's earnings report shows that its revenue and profit mainly come from two sectors: one is cloud computing and the other is retail.
First of all, retail, retail has suffered losses in recent times, the main reason is that when the new crown epidemic broke out in 2020, its revenue expansion was very fast in retail, so Amazon also invested a lot of production capacity in this regard, but with the new crown epidemic passed, the retail business of online e-commerce platforms was not as good as previously predicted, and at the same time it was subject to competition from new players in several aspects, such as the first aspect, short video platforms. Not only Amazon, but also many e-commerce companies in China have been affected by short video platforms. Many short video platforms have begun to bring goods on their own, and its sales have actually affected some traditional e-commerce platforms. The second is the featured e-commerce platform. In the past two years, many new characteristic e-commerce platforms have emerged, such as specializing in women's products, cosmetics, and outdoor products, etc., and these characteristic e-commerce platforms have also put greater pressure on Amazon. The third aspect is that some traditional retail companies, such as Walmart, Costco, etc., their online will also have a greater impact on pure e-commerce platforms. The fourth aspect also has some localized e-commerce platforms, made a small website, not for the whole country, but for some localized areas, if the people buy things here, the speed is particularly fast, may be delivered to the home in 2 minutes, and then there is one, it is very aware of many needs of local customers.
Amazon's still has the problem of weak customer growth, in fact, many e-commerce platforms and Internet giants in our country also have this problem. For example, the number of active users has reached 600 million or even 1000 million, and the entire country, not everyone can use this platform, so in the future, its user growth is also very weak. Once the growth of the number of users is weak, the ceiling of revenue is basically seen, that is, only the existing customers can be used to improve the performance of the enterprise, but the consumption capacity of the existing customers is also limited, so it is easy for us to see the ceiling of the enterprise, so its valuation may be more difficult to go up. Now Amazon has also encountered this problem, the growth of customers is very slow, the growth rate has seriously declined, so it is more difficult for Amazon to increase the valuation.
Another problem with Amazon is cloud services. In the past few years, Amazon's cloud services have grown relatively fast, and the overall profit contribution to enterprises is relatively good, but since the third and fourth quarters of last year, there has been a relatively large decline, the main problem is that most companies expect the global economy to be relatively poor in 2023. And its cloud services are mainly for enterprise customers, enterprise customers are more sensitive to market changes, so they cut orders in advance, which has a greater impact on Amazon. Therefore, the revenue and profit of Amazon's overall cloud service part have shrunk relatively fast, which also has a relatively large impact on Amazon's stock price, resulting in Jeff Bezos finally missing the world's richest man.
We just made a simple analysis, how LV is on, Tesla and Amazon are down, but if you only analyze this level, it is actually not enough, because the richest man list changes owners in a large area, in fact, may reflect two parts, one is the ups and downs of the enterprise, and the second is the change of the times.
In the past two years, China's rich list has also changed a lot, I know that China has a rich list, and the top ones are basically Chinese real estate developers, but from 2021, China's top ten richest people basically have few traces of developers, mainly some technology giants and manufacturing companies. Behind this is actually reflected in the central government's national strategy of developing high-quality growth from the beginning of 2021, the entire national economy is in transition, we must strive to get rid of the dependence on real estate, land and resources, transform the economic growth model, eliminate some enterprises with relatively high leverage, high pollution and heavy assets, and focus more on the development of some industries with low leverage, high growth, high added value and science and technology.
From a global point of view, countries that can cross the threshold of per capita income of $10,000 are generally of two types, one is that there are mines at home, and the population is small, and the income of such a country is relatively high; The other is that the entire country's industrial structure is more growth-oriented, such as high-end manufacturing, the Internet, and chips, and in general, its per capita income will rise to a relatively high height, for example, as we all know, like the United States, Europe, Japan, basically in the per capita annual income of $30,000 to $60,000.
By analyzing the changes in the richest man list, we can draw three conclusions in general:
First, LV Group became the richest man, and what we see is the gap between rich and poor widening around the world. Of course, it is related to the large-scale release of monetary policy by global central banks after the new crown epidemic, and before the US Treasury Secretary Janet Yellen also said that after each round of monetary policy in the United States, after quantitative easing, the country will have a K-shaped recovery, that is, in two different directions, the rich are richer and the poor are poorer. How did this process come about? Because the central bank releases water and injects new monetary liquidity into the entire system, the poor in this process cannot get this money, because it is not to you, it is to lend you, it lends you with low interest rates, 0 interest rates, and even negative interest rates, but the poor generally speaking, it will not go into debt, generally it is a profitable enterprise, it will borrow money, and then take this money to operate, so it will become rich and rich, poor and poor. So LV Group has become the richest person in the world, and in fact we see some signs of risk, in the future, due to the widening gap between the rich and the poor, the stability of society may be a negative impact.
The second problem, Tesla's fall from the altar, the more important reason is from the rise of many new forces in China, many new manufacturing giants on it. I will not go into detail one by one, I see that there are still many friends, many analysts like Tesla very much, and there are many friends who support China's new forces in car manufacturing, from my point of view, I am more optimistic about Chinese companies, of course, not because of the position problem, when we analyze these problems, from the data, from a logical point of view, we are more optimistic about the future of the country's high-end manufacturing prospects, of course, who dies, this is to be observed.
The third problem, these Internet platform companies, especially like e-commerce companies, and even some social media, their overall ceiling seems to have been seen, the main reason is that the number of customers is difficult to grow rapidly, of course, in terms of business, many including some countries from the United States, Europe have some anti-monopoly provisions, because you can't say that in the entire Internet rivers and lakes you are a company, which is unhealthy in any country, should be a hundred schools of thought, a hundred flowers blooming ecosystem, It will bring more benefits to people and bring more active elements to the economy, so we see that the e-commerce platform has a more obvious ceiling, and it may be that in the future, its valuation is more biased towards a traditional enterprise, more value, and may not be very growth.
(Chen Hongbin is Assistant General Manager and Chief Economist of Pengyang Fund)