BUY : YG ENTERTAINMENT INC (KOSDAQ: 122870)
SHORT: VINFAST AUTO LTD (NASDAQGM: VFS)
Two Asian Companies: Desire v. Force
The first stock represents authentic demand. It is the stock of K-pop group BlackPink, which is finishing the last leg of its world tour and is on the verge of renewing its contract with its management company, YG Entertainment. The group's popularity is immense, and its fans are eager to buy its music, merchandise, and tickets to its concerts. This demand is authentic because it is driven by the genuine appreciation of the group's music and talent.
The second stock represents a domestic monopolistic situation. It is the stock of an electric vehicle (EV) company that has a monopoly on the production of EVs in its home country. The company has been able to sell EVs in its home country, but when it has tried to export them to other countries, the demand has been low and the reviews have been poor.
The two stocks represent two different types of demand. Authentic demand is driven by genuine consumer interest, while domestic monopolistic demand and global supply - distort the market.
Authentic global demand is more sustainable in the long run, while domestic monopolistic demand can not be replicated globally.
Trust Human Nature
Humans have a natural desire for the most advanced yet acceptable products and services. This is known as the MAYA principle, which stands for "Most Advanced Yet Acceptable." Demand is one way that this desire is conveyed.
It can be seen in any market where people are buying and selling products or services. For example, when people buy a new car, they are essentially betting that the car will be more advanced than their old car and that it will be acceptable to them in terms of price and quality.
The stock market is therefore a reflection of human nature's desire for MAYA. When a company's stock price goes up, it is a sign that investors believe the company is on the right track to providing them with advanced and acceptable products or services. Conversely, when a company's stock price goes down, it is a sign that investors are losing faith in the company's ability to meet their expectations.
This pair trade reflects all of the above.
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VFS is up nearly 400% since the day of this post. Yikes. A dangerous short that may have wiped you out depending how you did it