r/baba
What are you buying?
Author justifies holding and buying the dip on BABA, citing diversification, buybacks, and China's cheap energy advantage for AI/cloud.
- Highly diversified business model spanning e-commerce, cloud, logistics, and AI.
- Strong shareholder returns through active share repurchase programs.
- Strategic advantage in cheap and stable energy for sustaining profitable AI and cloud services.
- Potential deterioration of China's macroeconomic situation.
- Extreme market irrationality and prolonged volatility in Chinese equities.
Hi fellow bagholders!
After these days with the price of BABA falling hard is time to remember why we bought and what we are buying or bagholding.
Why buy/hold BABA?
\- One of the most dominant companies of China, the second world power.
\- High diversification in one company (e-commerce, cloud computing, logistics, IA and a investment portfolio)
\- International Reach. BABA still have its core business in China but it is growing outside this may compensate if the economic situation in China does not get better.
\- Infrastructure. BABA is one of the few companies that can build and maintain its own infrastructure out there, from the fabrication of their own chips, to data centers and all the logistics related to e-commerce.
\- Favourable treatment of shareholders. BABA is repurchasing its own shares every year and still have some programs active.
\- Intrisic advantages of China. Yes... To have your core business in China have some advantages as the access to an stable and cheap energy while the rest of the world will see their prices increase due to US-Iran war and strategic reserves depletion. This is a core advantage to offer cheap cloud and IA services that are profitable and sustainable in long term.
I have been years holding yes, started when the price was 180$ and DCA it to an average of 100$. I bought a large chunk when it was at 60$ - 80$. So I'm not afraid of these prices as I know what I'm buying.
I will buy more BABA if it falls under 100$ and will hold my position through this market. Remember that if markets can be stupid, the chinese one can be extra-stupid so it is very probably that we will see again incredibles opportunities for long term.
https://chinabizinsider.com/alibaba-launches-gpu-solver-to-challenge-western-industrial-software-dominance/
BABA has sovmany things that it is imposible to keep them tracked lol.
Bough baba at 230 when the founder wa locked up and average down
The biggest mistake in my life as Charlie puts it
I bought PDD recently after the drop, seems like a copy-paste of the BABA case when I bought BABA for 80, it will go lower and Im DCAing to 5% of my portfolio. I also bought META as it is too low to ignore with their crazy growth and the layoffs will jump earnings.
Sold 70% of my BABA bags due to large part from 150-180 and hold 30% for tax purposes (rotated some to options). These 30% are still 7% of my portfolio. BABA go up randomally on some good macro announcement, and almost never jumps on earnings abd such. Basically, we drop till some random announcement.
SpaceX. Who doesn’t like bags right
I moved everything to money market about 2 weeks ago bc I thought Trump would screw up Iran and long bond yields were getting scary, raising odds of tech bubble popping.
Just buy HK traded stocks ETF
Kweb, fxi or mchi?
Average $85 here. Here are the HK listed companies that I like a lot right now:
- Baba. Regulators are cracking down involution, which means improved margins. There was also a huge industry wid cloud hosting / token fee increase end March.
- Baidu. Dark horse, they are into LLM, chip design, autonomous driving. Their AI cloud revenue grew >90% YoY last quarter. AI revenue finally overtook legacy business.
- Samsonite: Mispriced as they are only listed in HK.
- Geely Auto - grew organically and has better product mix than BYD to be a true global leader in Automobile.
https://www.yicaiglobal.com/news/huawei-alibaba-are-among-first-to-get-chinas-ai-chip-safety-certification
Zhipu Ai. Sell before July lock up.