What are quality assets for the next twenty years?

Over the past few decades, the real purchasing power of cash (deposits) in any country has been continuously shrinking. This is because central banks worldwide inevitably oversupply currency to stimulate the economy, and then purchasing power is diluted by inflation. Therefore, in the long run, cash is perpetually depreciating. So, if people want to preserve their wealth over the long term and not be harvested by the times, they must convert cash into high-quality assets.

From the perspective of Buffett and Munger, high-quality equity is a high-quality asset that can generate cash flow. This is because the price of high-quality assets (equity, core resources, scarce technology) rises in sync with the growth of the total money supply and social wealth, naturally outpacing inflation. The key advantage of high-quality assets is their ability to continuously generate cash flow. When cash flow is compounded, wealth grows over the long term. This is also the core investment philosophy of Buffett. In contrast, low-quality assets not only lack compounding but also lose principal. Munger said that if he knew where he was going to die, he would never go there. Therefore, we should first avoid investing in low-quality assets and then invest in high-quality ones. What are low-quality assets? They are things that only cost money, don't generate income, continuously depreciate, and are extremely difficult to liquidate. If an asset has all three of these characteristics, it is definitely a low-quality asset. First, real estate in third- and fourth-tier cities. Because the population will continue to decrease in the future, and young people will flow into big cities, no one will buy properties in third- and fourth-tier cities. There will also be many vacant properties with no one living in them, and houses require maintenance fees.

Getting back to the point, what are high-quality assets for the next twenty years? The past twenty years were an era where buying property guaranteed easy wins. The next 20 years will be the era of AI, the energy revolution, the space economy, and life sciences. Leading companies in fields like AI, space, and life sciences will become the world's highest-valued enterprises.

Therefore, areas such as clean energy, energy storage, certain strategic metals and materials, biotechnology, and the space economy are all high-quality assets. Allocating to high-quality assets in these fields is like boarding the express train of the times, sharing in the dividends of industrial growth. Ordinary people can participate through equity investments, and a more convenient way is to invest in Nasdaq and S&P indices.

From a social and humanistic perspective, high-quality assets for the next twenty years are electricity, clean water resources, and human capital. More specifically: stocks related to brain-computer interfaces, power and energy, and infrastructure such as electricity, communications, and water supply. Applicable to A-shares, Hong Kong, and US markets.

$Amazon(AMZN.US) $Alphabet - C(GOOG.US) $Tesla(TSLA.US)