r/baba
For the first time since first buying Alibaba stock in 2021, I'm considering selling my entire position
Author considers selling BABA after 5 years due to China's macro weakness, heavy cloud capex, and management's flawed grocery expansion strategy.
- Stock is majorly oversold and likely to see a massive bounce.
- China's economy will do great long term.
- Underestimated the current weakness of China's economy and the time needed for a turnaround.
- Massive cloud/AI investments over the next 2-3 years will scare away investors.
- Management's stubbornness in returning to the low-margin grocery business bloats the company instead of focusing on cloud and AI.
Bought and DCA'd from $130 through the lows into the 60s, and then back up to the $160s.
But for the first time in 5 years, the thought of selling my entire position is entering my mind.
I know China's economy will do great long term, but I may have vastly underestimated the economy's current weakness and how long exactly this turnaround could take.
And as good as the cloud story is, the massive investment it will take over the next 2-3 years will send all investors running for the hills.
You are seeing it right now.
That and management's stubbornness into getting back into the grocery business when this was exactly what caused the business to become such a bloated behemoth in 2021 instead of simply focusing on cloud + ai like they originally planned.
Let Meituan have the shit margin grocery delivery business. Stop being so afraid of being irrelevant because nobody uses your app.
Focus on the future. Focus on cloud + ai like you promised for the last few years.
I'm not selling shit right now. The stock is majorly oversold and I'm sure it'll come back with a massive bounce like it always does.
But I may just be done playing value investor and go $VT and chill instead after it recovers.
At least that way I still get some China exposure, but it matches the global market size proportionally.
I can't believe I'm writing this honestly, because I thought this was one of those stocks that I could hold on forever, but after 5 years... I don't know anymore.
You know the ole saying: "the definition of insanity is doing the same thing over and over again and expecting different results?"
Yeah, maybe there's something to that.
After you sell, it will go up 500%. Please sell thanks
The best part is, it definitely won’t at all lmao
That was what happened to me in META - bought in below $100 - held until it hit $300. Then it dropped below $100.
Was so sure that META is becoming irrelevant due to Tiktok and not happy about Meta's massive waste in the Metaverse investment. After I sold, it skyrocketed.
And to add insult to injury, I held on to my China stocks - including Baba.
This stock is trash until they release PuPu
Imagine if Google started buying grocery stores
Insanity
Not the same at all. baba is retail first, so it is more likely amzn bought a grocery store which amzn did
I mean... Amazon did buy a grocery store and that's the closest American equivalent to BABA.
I know. It's beyond dumb.
They are so scared of losing relevance by people not using their apps anymore that they'd rather light up piles or cash instead of actually using it to innovate and keep people inside their ecosystem.
Being bearish on Alibaba because they spend money on "getting into the grocery business" is like being bearish on Google because the CEO once expensed a taxi ride you didn't agree with
Being bearish on Alibaba because of a lack of AI + cloud investments is like being bearish on spacex because of lack of hype/optimism
Being bearish on Alibaba because you realize there's an economic downturn and a price war going on is bizarre. The potential of either of these ending is a colossal positive, not a negative
If you want to be an Alibaba bear, you have to give up trying to think rationally or logically - there are no logical or rational arguments available
You need to ascend above rationalism and embrace reasons like "The chart told me it's about to go down" or "The ticker symbol is cursed" or "I can see the future, 3% red tomorrow"
Ascend, and become a Mystic Bear
I wish Reddit would let us change usernames. Mystic Bear sounds awesome.
I agree it's way oversold to be selling right now. Might be lowest daily RSI ever. It's rough holding, had chance to sell and buying into other positions that could have profited big time already.
Some other stocks are also starting to get hit hard: MSFT, ADBE, META. Those stocks are slowly starting to look like better value than BABA.
There's always many tailwinds for BABA that's keep me holding but new negative news keeps popping up.
I think next quarter will be very telling. AI compute should be booming, big cloud price hikes, food wars suppose to be improving. If after all these and BABA can't give a blowout earnings, I don't see much more hope.
I get how you're feeling. I've been averaging up too, buying more in the $130s after accumulating lower in the 70s.
That said, selling now feels a bit like capitulating near the bottom. The sentiment around China is about as bad as I've seen it in years, and that's usually when everyone suddenly finds a hundred reasons why the stock is uninvestable.
If you're looking at the Tank Seng, the 22,000-23,000 range is the key area. It's either going to act as major resistance or become support if we can hold above it. That'll tell us a lot about where things go next.
Personally, I'm just holding. Could be dead money for a while longer, sure. But after sitting through the drop from the highs and averaging in through all the volatility, selling into peak pessimism doesn't feel like the move for me.
Near the bottom? This is literally the beginning of the bear market for Tank Seng.
China is part of the story, but this shit performance was also majorly caused by stupid management decisions. They just simply lack business acumen. For example, look at Tencent, which was very briefly close to its previous ATHs despite china macro pressure due to better management and business decisions. They are putting money with superior ROI rather than just chasing the next hype and trying to get into everything. They also time share buybacks very well, buying heavily when shares trade at a discount. Compare this to BABA which has been nowhere near its ATH
We all think we are value investors but we are really more of a bag holders anonymous support group.
Great America?
Is this satire? 🤣