Conversely markets could also be overreacting, and it could overreact for very long periods of time.
True. But what’s more probable: you - one person - being wrong or millions of market participants (many with inside information)?
Humility and introspection are important in life and investing in particular.
You might be right, but likely aren’t. And as you said, ‘the stock market can stay irrational longer than you can stay solvent’ to paraphrase Keynes.
Theres nothing fundamentally wrong with the business, the share price is suppressed due to negative sentiment towards China (not even the company alibaba). Just over a year ago the stock was trading around three times the current stock price. I disagree with you and think that you limit yourself by investing when sentiment is good and sell off when sentiment is bad (markets will always price this before you’re able to time your sell or buy order). Investors are not dumb to see the risk in China, but I believe it has been greatly exaggerated. I think once the Chinese economy starts running again BABA will go up like crazy (we’ve seen this happen several times on speculation of the CCP boosting the economy, this proves that the stock price suppression is based on the CCP and fears of China as a country). We’ll see if BABA was a bad bet in 5-8 years.
I have never seen @SebReitz talk about his personal investments (and he has been here for many years). In fact many of his comments tend to to suggest he isn’t a “trader” in the sense you suggest.
In other news
Opening baba up to more home grown investors.
Conversely markets could also be overreacting
True, being irrational is what Mr market does best, but experience has shown me one scenario is much more likely.
I still agree BABA is looking really appealing at the moment, I am just pointing out the risks of assuming the market is incorrect because of the fundamentals look too good.
Whats too good in the numbers?
I guess the META earnings made it to China too
Be ready, $85 might be today
Whats the reason? Can’t find anything on the news? Its literally dropped from $120 rapidly without anything happening…
Only negative news I’ve read this week is the broader Chinese economy (possibly recession) and Jack Ma stepping down from Ant Group.
The Evergrande saga continues too.
What exactly would delisting of BABA entail for those of us that have shares on Freetrade?
Does anyone know what would happen to our US shares (ADR’s) of Chinese companies if they get de-listed?
Dodo is currently going through this process, and have said that “U.S. shares will be freely tradeable upon listing on the HK exchange”.
Will Freetrade (or the individual) be forced to sell their shares? Or will Freetrade be able to carry on holding your shares if they are freely tradeable?
I’m really keen for an an answer on this one, as Alibaba could potentially face a similar fate (a stock that I own), and I want to know if I should be manually selling my shares on Freetrade now and moving the money to a different platform such as DeGiro where I can buy direct HK shares.
Thanks for raising this. We’re looking closely at the latest developments around the potential delisting of certain ADRs from China. If the delisting goes ahead, we’ll need to check with our custodian about how trading will be impacted. We’ll keep you posted as we know more.
What happens to my Alibaba shares if this stock gets delsited on the US exchange. If it is delisted would it automatically sell my stocks or would i be able to transfer my stocks to another exchange e.g Japanese stock exchange? Any help would be much appreciated. Just want to know what my options are.
Following the huge fine Alibaba have just been handed ($2.75bn) and the recent mysterious circumstances around Jack Ma’s whereabouts, it further highlights potential issues about investing in Chinese companies i.e. NIO, Alibaba, eHang, JD.com etc
What are people’s thoughts? Does this introduce the potential for an artificial ceiling to the growth potential of individual companies? Do you think it’s dependent on the sector? Will this recent ruling make you think twice about speculating on Chinese companies?
I’m a huge sinophile and I wouldn’t touch the majorty of Chinese stocks with a bargepole. Actually, I feel a little hypocritical saying that, as 4% of my portfolio is in TCOM which is the US-centred, international rebranding of ctrip which is basically the only travel app you need in China. Personally, I think they have to opportunity to go huge when their international arm gets better known (although it hasn’t made much impact in the first couple of years), but they make so much money in China that they’ll survive a weak launch anyway. Not only is the app really convenient, it’s often cheaper than any of the Western travel companies.
But Chinese companies in general are known for being very corrupt financially and an extremely volatile market. It’s really common for seemingly perfect companies led by very respected business leaders to suddenly crumble exposing hundreds of millions or billions of dollars of fraud. Definitely stay away from real estate or financial services. There’s a reason that the Chinese that are able to invest outside China do so.
The biggest players, JD, Alibaba, Baidu, Tencent, Netease are all pretty stable and have massive turnovers, but this Alibaba case shows that even they can suddenly have massive fines out of the blue, when they don’t really seem to have done anything wrong except getting too big, which this fine isn’t going to solve.
But honestly, pretty much anything in China operates differently to here, you definitely won’t understand the market, and you’ll find it next to impossible to find out useful things about Chinese companies unless you read/speak Chinese very well.
Read about Luckin Coffee.
It’s enough to put you off