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Showing posts with the label Chinese tech stocks

Stop Guessing What a Stock Is Worth

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Alibaba: A Great Business Doesn’t Have To Be A Great Investment

In November 2020, just after the unexpected suspension of Ant Group’s IPO, an analysis of Alibaba Group Holding Limited (NYSE: BABA) was published on Seeking Alpha. Titled Alibaba: E-Commerce Giant In The Midst Of A Hurricane , the article delved into the challenges faced by the company during a volatile period. This analysis marked the beginning of a fascinating investment journey for many, offering valuable lessons and insights into the complexities of navigating market turbulence. Alibaba was in freefall, its valuation cratering amid regulatory uncertainty, political tension, and investor fear. And yet, I was all in—convinced this Chinese juggernaut was dramatically undervalued. I didn’t know it at the time, but I was about to learn three vital principles that would shape my entire investing philosophy: Even when you're confident in the business, you can be wrong. Don't go too heavy too quickly. Cap your exposure to any single investment based on your overall portfo...