Alibaba and the Forty Thieves. How Will the Indian Covid Variant Pan Out?

 Quite a few friends, followers and clients have asked about BABA. Firstly, I’ve bought ¼ at around USD250, another ¼ at USD235. Because they were at 200MA. I won’t buy any more because the next step is to wait for the turnaround, otherwise I may run out of money. As long as the business is good, long term trend is up, I will still hold.

 



 

Alibaba’s revenue grew 64% YOY. 3 major strategic investment priorities of domestic consumption, globalisation, and technology / cloud. Valuation is one of the cheapest among e-commerce players like Amazon, JD, Tencent. Against historical valuations, its Forward PE and EV EBITDA are over 1 standard dev below mean.

 



 

EBITA margin has steadily dropped to around 24% while net margin remain stable at 30%.


 


 

https://www.channelnewsasia.com/news/world/covid-19-people-vaccinated-can-avoid-masks-travel-us-cdc-14804602

 

Meanwhile, in the west, they are removing their masks. The worry is they may also have the Bengal strain (Indian variant). It means that by 2nd half of 2021, cases in the west may skyrocket. The vaccination doesn’t prevent transmission. In Singapore, 19 of the 26 infections at Changi were fully vaccinated. It is more infectious, but less deadly. However, if the hospitals are swamped, then death rates will rise.

 

If the west gets hit with higher cases, there may be another lock down after June. The WFH stocks may rise again. MELI, NVIDA, Paypal, SEA Ltd, Square, Shopify, Semiconductor ETF SMH, Applied Materials AMAT, Lam Research LRCX.

 

Comments

Post a Comment

Popular posts from this blog

My Funds Portfolio 14 Jan 2021

Image
  Below is the overall performance of my funds. For CPF, I put everything into funds. I refuse to buy SGD stocks because you should see the performance of MSCI Singapore below. In the last 1 year, the performance was down 5.9%. it is only this year that the performance went up slightly but it is still down. If I had used my CPF and cash to buy SGX listed companies I would have done at best 5% even with superior stock picking.   Look at the other indices. MSCI world is up 16.1%, S&P500 is up 18.0%, China is up 38.6%, Europe up 6.2%, MSCI Asia ex Japan up 28.2%. NASDAQ was of course the best performer with 44.7%. So the growth is NOT in Singapore. It is either in the US or Asia, mainly China. Even the best companies from Singapore are listed in NASDAQ, e.g. SEA Ltd. We have become the “forgotten man” or “sick Man” of Asia in terms of stock markets.       The average performance of my funds are 25.8%. this is unrealised return and doesn’t include realised gains...
Read more

This Too Shall Pass

Image
This is a good article to serve as a reminder. At the risk of sounding old, with 23 years of experience in the financial industry, and it may seem corny, but I must admit “I’ve seen it all before”.  1998 Asian Financial Crisis, 2001 Sep 11, SARS in 2003, 2008 global financial crisis. The chart does look scary. It is the fastest 18% fall in history because we are in the age of automation and robots trading. ETFs are also causing this sell down as it indiscriminately liquidates stocks when investors sell. Below is the S&P500 ETF, SPY. 18% drop from 18 Feb to now, in 15 trading days. If you are very worried, stretch out your chart on a weekly basis, and over 5 years. It now looks like familiar territory? It is now resting on the 150 weeks moving average. On 24 Dec 18, it rested on the same moving average and shot up by over 25%.  On 8 Feb 2016, it tested again and recovered 53%. Now does it look familiar?  We have seen this happen twice previously in t...
Read more

A Bull Run is Born from Pessimism

Image
“A Bull Run is born from pessimism”. Some famous fund manager said that. I think it’s Peter Lynch. The bottom of the “Big Correction” was Christmas Eve, 24 th  Dec 2018. All stock markets rallied very hard in the first four months of 2019. But then the Trade War started, with Twitters threatening every other day of escalating embargoes. Asia ex Japan, MSCI Emerging Market and Japan were hit very hard, while the western world continued to rally. It was very difficult as an advisor to “push” or “persuade” clients to increase equity allocation because the news was simply very bad at every angle. There lies my repeated urgings to ignore mainstream news. One simply cannot make economic forecasts and translate that to equity returns! What matters is momentum and value! Pick the best value or cheapest stocks, sectors, funds, check the technicals if they are going to rise or fall. If they are rising, you buy. If they are falling, stay far away. Now that most of the easy money is made ...
Read more