r/baba
Just a Friendly Reminder: If You Liked At $150, You Should LOVE At $95
Author argues BABA is a better buy at $95, advocating long-term value investing and strict position sizing despite current losses.
- The stock is significantly more affordable now at $95 compared to $150, presenting a better entry point.
- Long-term investment horizon with massive upside potential if the company's thesis plays out.
- Disciplined position sizing mitigates downside risk while allowing for substantial gains.
- The investment thesis carries significant uncertainty, and there is a real risk of losing the entire investment.
- The author is currently down on the position after holding for nearly 5 years, indicating prolonged underperformance.
Unless something major has changed in the thesis of the company (which you could maybe argue the recent news has, but frankly, I think it is mostly the sentiment following the drop in share price), the fact that one should hate a company when it becomes more affordable per share is ridiculous.
To paraphrase Warren Buffett: If you're not thinking of owning a stock for 10 years, don't think about owning it for 10 minutes.
Will BABA work out as an investment over time? Who knows. That's why you should only allocate a percentage of your money that you feel comfortable taking a calculated risk on. You could lose everything, or you could make a hefty profit. That's investing in a nutshell.
Investing is a long-term game. You need to be patient and calculated with your bets. To see so much emotion and short-term reaction to price fluctuations and news articles is kind of ridiculous.
Full disclosure, I have held BABA for nearly 5 years now, and I am overall down. But I am adding slowly to my position as it falls. It makes up a relatively small percentage of my portfolio (like 3%), so I can sleep at night if it underperforms/tanks in the long run, but I have massive upside if it plays out positively in the long run.