AliBaba

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
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linenfort
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Re: AliBaba

Post by linenfort » Thu Jan 29, 2015 4:04 pm

TheRightKost87 wrote:True, I debated hitting "submit" because I knew it was in bad taste.
For what it is worth, I appreciate your calling this thread back. With the 8- or 9% drop today, I can feel happy that I never bought shares.

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in_reality
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Re: AliBaba

Post by in_reality » Thu Jan 29, 2015 7:26 pm

TheRightKost87 wrote:I just came here to :D at the BABA investors as they :oops:

Glad I'm sticking to indexing
OK, but what does sticking to indexing have to do with owning BABA?

MSCI said they will start to include companies like BABA that aren't listed in their country of origin. FTSE is said to be discussing it.

You will probably own BABA soon enough I think.

My concern is what owning it (and the Chinese market in general) in market cap proportions would mean.

For instance, prior to the IPO China said nothing about BABA's business practices. After the IPO and a major shareholder (Yahoo) plans to get out of the holding, China is accusing BABA of selling too many fakes. BABA counters the gov. is really targeting them unfairly.

As a backdrop, China has also said the BABA type of structure is ok as long as it remains under "Chinese ownership".

So I suspect that everyone everywhere running a business in China is probably doing something that violates some Chinese law in some way or fashion (particularly with pollution) and that the Chinese gov. will pick and choose enforcement not on the principal of law (which doesn't exist in China really -- the courts are there to support the party) but on how to promote party interests.

Par-for-the-course emerging markets considerations perhaps, but given the scale of the Chinese market, I wonder how much it could potentially change say the composition of VXUS (Vanguard total international).

So it's cute and everything being cheeky about BABA's loss but I don't see myself being out-of-the-woods even if I stick to index funds. This may be paranoia on my part and I admit to having no particular information advantage about the Chinese market nor can I realistically in any way predict what will happen there.


Still, Rule of law in China simply means "will of the party", and only to the degree that foreign investment serves China, I think it will be allowed. This is what I got out of discussions with a Chinese Ph.D student when we were in the same foreign language class in graduate school. We got bored with simple sentences and into discussing the real world in English... "What was ever Chinese will always be Chinese" is how it was put to me and I am thinking about that now in terms of my investments.

And when I calm down I think China is so huge they can only so selective enforcement so if it's BABA now, or international companies recently, it's just me seeing a pattern that might not really be there.

miles monroe
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Re: AliBaba

Post by miles monroe » Wed Aug 12, 2015 5:32 pm

no talk about BABA for a loooong time.

reached its all time low today.

CantPassAgain
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Re: AliBaba

Post by CantPassAgain » Wed Aug 12, 2015 6:57 pm

Funny how we have heard nothing, zilch, nada from IPer and SuperSaver after Nov 8th 2014.

Happy to be a stupid indexer.

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in_reality
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Re: AliBaba

Post by in_reality » Sun Sep 20, 2015 8:58 am

SuperSaver wrote:Whos's buying, at what price, and how many shares???

Write it in stone: BABA will outperform VTI over next decade.
:moneybag
Alibaba‘s very first trade was at $92.70.

On it's one year anniversary it's at $64.35.

columbia
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Re: AliBaba

Post by columbia » Sun Sep 20, 2015 1:29 pm

Did it ever enter one of the Vanguard funds?

TradingPlaces
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Re: AliBaba

Post by TradingPlaces » Sun Sep 20, 2015 1:41 pm

columbia wrote:Did it ever enter one of the Vanguard funds?
I hope not. No Chinese stocks should enter any index funds given the Chinese govt shenanigans.

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Re: AliBaba

Post by TradingPlaces » Sun Sep 20, 2015 1:42 pm

in_reality wrote:
SuperSaver wrote:Whos's buying, at what price, and how many shares???

Write it in stone: BABA will outperform VTI over next decade.
:moneybag
Alibaba‘s very first trade was at $92.70.

On it's one year anniversary it's at $64.35.
So which conclusion is the more correct one:

- IPO price was too high,
- BABA is a scam, and it is slowly unwinding,
- BABA is an overpriced Chinese stock, and it is going down like the rest of the Chinese market.

And a small piece of advice: never write anything in stone. It is too hard. It is much easier to put it in the e-mail. You can be held equally accountable too.

iflyjetzzz
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Re: AliBaba

Post by iflyjetzzz » Sun Sep 20, 2015 1:46 pm

TradingPlaces wrote:
columbia wrote:Did it ever enter one of the Vanguard funds?
I hope not. No Chinese stocks should enter any index funds given the Chinese govt shenanigans.
Google search answers a lot of these questions. http://investorplace.com/2014/11/vangua ... f7-PBF77IU

yearzero
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Re: AliBaba

Post by yearzero » Mon Sep 21, 2015 1:35 am

The lockup on 63 percent of Alibaba shares ended this weekend:

http://www.bloomberg.com/news/articles/ ... ahoo-stake
"Don't waste your time, or time will waste you"- Muse-Knights of Cydonia

minesweep
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Re: AliBaba

Post by minesweep » Mon Sep 21, 2015 7:44 am

TradingPlaces wrote:
in_reality wrote:
SuperSaver wrote:Whos's buying, at what price, and how many shares???

Write it in stone: BABA will outperform VTI over next decade.
:moneybag
Alibaba‘s very first trade was at $92.70.

On it's one year anniversary it's at $64.35.
So which conclusion is the more correct one:

- IPO price was too high,
- BABA is a scam, and it is slowly unwinding,
- BABA is an overpriced Chinese stock, and it is going down like the rest of the Chinese market.

And a small piece of advice: never write anything in stone. It is too hard. It is much easier to put it in the e-mail. You can be held equally accountable too.
The OP's prediction was for a decade. Accountability will have to wait another 9 years.

Mike

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SuperSaver
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Re: AliBaba

Post by SuperSaver » Mon Sep 21, 2015 9:03 am

CantPassAgain wrote:Funny how we have heard nothing, zilch, nada from IPer and SuperSaver after Nov 8th 2014.

Happy to be a stupid indexer.

Please re-read my original post. "Over the next decade...." Way too early to discount Alibaba.

Since my OP, I've sold my losers, cashed in some modest winners, and added to my strong positions. Overall, my individual stock portfolio is killing my index fund portfolio

GOOGLE, APPLE, STARBUCKS, DISNEY, CHIPOTLE >>> VTI.

I don't need the power 5 Above to out-perform VTI over the next 100 years... Just over the next 20 before I start migrating to Bonds. :D

Jozxyqk
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Re: AliBaba

Post by Jozxyqk » Mon Sep 21, 2015 10:17 am

SuperSaver wrote:
CantPassAgain wrote:Funny how we have heard nothing, zilch, nada from IPer and SuperSaver after Nov 8th 2014.

Happy to be a stupid indexer.

Please re-read my original post. "Over the next decade...." Way too early to discount Alibaba.
Gotcha. So when you were declaring victory on BABA two *months* after it became available, what were readers meant to take from that?
SuperSaver in Nov 2014 wrote:Alibaba is up 13% since IPO....

VTI? Not so much.

BABA was close to a sure thing. Kudos to those who rolled the dice.

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in_reality
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Re: AliBaba

Post by in_reality » Mon Sep 21, 2015 10:47 am

SuperSaver wrote: Please re-read my original post. "Over the next decade...." Way too early to discount Alibaba.
Well, I conclude rather it's too early to trust any accounting numbers out of China that can't be audited under globally accepted standards.

Lots of people speculate about which investments will outperform --small cap value, Emerging, QSPIX, REITs etc etc -- but to call any speculation a sure bet is nonsense.
SuperSaver wrote: Write it in stone
Nonsense!

CantPassAgain
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Re: AliBaba

Post by CantPassAgain » Mon Sep 21, 2015 10:57 am

I think it's pretty healthy to call people out in situations like this. I used to take most of what I read here at face value. The longer I hang around, the less confidence I have that most people are genuine. I just read a post by IPer were he admonishes others for being speculators. Say what now?

It's always good to be reminded that this is the internet and anyone can say anything.

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hornet96
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Re: AliBaba

Post by hornet96 » Wed Sep 23, 2015 12:06 pm

hornet96 wrote:
miles monroe wrote:look out below when the lock out period (90 days!!!) expires.
I actually don't think there is even a lock up period for this IPO (based on what I read this morning), making this thing all the more suspicious. Given the opacity of the governance structure, the lack of independent directors on the board, the ability of the significant insiders to basically do whatever they want with capital allocation decisions without regard to shareholder pressures, and the well documented "softness" of the reliability of reported Chinese company financial statements......this smells like a recipe for disaster, to me.

Current share price looks to be $90.77. I'm documenting this as a reference point for the future to see how my prediction turns out.
Update: Just over 1 year later, BABA is trading at about $59.99, or a loss of -33.91% since my post above.

Image

This was going to be one of my shorts in the Bogleheads hedge fund contest (but was unfortunately ineligible based on the rules). Darn! :oops:

With China continuing to implode, lookout below on this one.

autonomy
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Re: AliBaba

Post by autonomy » Wed Sep 23, 2015 12:19 pm

SuperSaver wrote:
CantPassAgain wrote:Funny how we have heard nothing, zilch, nada from IPer and SuperSaver after Nov 8th 2014.

Happy to be a stupid indexer.

Please re-read my original post. "Over the next decade...." Way too early to discount Alibaba.

Since my OP, I've sold my losers, cashed in some modest winners, and added to my strong positions. Overall, my individual stock portfolio is killing my index fund portfolio

GOOGLE, APPLE, STARBUCKS, DISNEY, CHIPOTLE >>> VTI.

I don't need the power 5 Above to out-perform VTI over the next 100 years... Just over the next 20 before I start migrating to Bonds. :D
So in a rushing tide your 5 stocks outperformed an index fund over the coarse of 1 year? Let's see your performance in a bear market. Are you going to hold your positions when your individual stocks are down 30% and the index is down 20%? How about a 10-year horizon? 20 years? Still think they'll outperform?

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Re: AliBaba

Post by TheRightKost87 » Wed Sep 23, 2015 12:44 pm

SuperSaver wrote:
Since my OP, I've sold my losers, cashed in some modest winners, and added to my strong positions. Overall, my individual stock portfolio is killing my index fund portfolio

GOOGLE, APPLE, STARBUCKS, DISNEY, CHIPOTLE >>> VTI.
Looking through your old posts this is the first mention of these stocks that I've seen. I too can pick winners after the fact, as I'm sure anyone else on this board can do. You did mention a few other individual stocks - but those must have not performed as well so you've conveniently forgotten about them.
SuperSaver wrote:Alibaba is up 13% since IPO....

VTI? Not so much.

BABA was close to a sure thing. Kudos to those who rolled the dice.
Ouch.... :oops:
"The problem with diversification is that it works, whether or not we want it to"

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Re: AliBaba

Post by nisiprius » Sun Aug 05, 2018 12:48 pm

SuperSaver wrote:
Thu Sep 18, 2014 8:55 pm
Whos's buying, at what price, and how many shares???

Write it in stone: BABA will outperform VTI over next decade.
:moneybag
Arguably likely if you choose to ignore risk. Since this was posted, BABA has displayed nearly four times the standard deviation--and has been much riskier by every other measure of risk: a far worse worst year, over four times the maximum drawdown... and, yes, a five times better best year. As a result, BABA has had a Sharpe ratio (a measure of risk-adjusted return) of 0.60, compared to 1.04 for VTI.

Certainly, it has outperformed VTI, but, to date, BABA's performance has not justified the risk. In other words, you could have beaten BABA by taking the same amount of risk in some other way--for example, buying VTI on margin.

Source

Image
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Re: AliBaba

Post by MotoTrojan » Sun Aug 05, 2018 1:12 pm

nisiprius wrote:
Sun Aug 05, 2018 12:48 pm
SuperSaver wrote:
Thu Sep 18, 2014 8:55 pm
Whos's buying, at what price, and how many shares???

Write it in stone: BABA will outperform VTI over next decade.
:moneybag
Arguably likely if you choose to ignore risk. Since this was posted, BABA has displayed nearly four times the standard deviation--and has been much riskier by every other measure of risk: a far worse worst year, over four times the maximum drawdown... and, yes, a five times better best year. As a result, BABA has had a Sharpe ratio (a measure of risk-adjusted return) of 0.60, compared to 1.04 for VTI.

Certainly, it has outperformed VTI, but, to date, BABA's performance has not justified the risk. In other words, you could have beaten BABA by taking the same amount of risk in some other way--for example, buying VTI on margin.

Source

Image
I don’t fully grasp using volatility to measure risk. A company that frequently gravitates from best company ever to S&P500 average will have impressive compound returns but be highly volatile. Couldn’t you have a large standard deviation and never have negative returns?

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Re: AliBaba

Post by LadyGeek » Sun Aug 05, 2018 1:37 pm

^^^ That's what the columns titled "Sharpe Ratio" and "Sortino Ratio" are for - a way to measure volatility in a consistent manner. The Sortino ratio only looks at "downside" volatility, the Sharpe ratio looks at both upside and downside.

Some good tutorial info is in this post: Re: Simba's backtesting spreadsheet [a Bogleheads community project] (website links to Sortino ratio)
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Re: AliBaba

Post by david1082b » Sun Aug 05, 2018 10:10 pm

TradingPlaces wrote:
Sun Sep 20, 2015 1:41 pm
columbia wrote:Did it ever enter one of the Vanguard funds?
I hope not. No Chinese stocks should enter any index funds given the Chinese govt shenanigans.
Chinese stocks make up 3.3% of Total World Stock right now https://investor.vanguard.com/etf/profile/portfolio/vt

We can see that Alibaba makes it to the first page of holdings https://investor.vanguard.com/etf/profi ... o-holdings

TWS does what it says on the tin pretty much, excluding marginal places like Venezuela and Zimbabwe that don't qualify for emerging status, even "frontier" is pushing it for them.

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SuperSaver
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Re: AliBaba

Post by SuperSaver » Wed Jun 12, 2019 9:09 am

Let's see how my prediction has fared nearly 5 years ago since BABA's IPO:

VTI: +44%
BABA: +70%

:sharebeer

quantAndHold
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Re: AliBaba

Post by quantAndHold » Wed Jun 12, 2019 10:51 am

This is what you’re talking about right? Same overall performance within 0.1% over 5 years, with massively more volatility and drawdowns.

Image

Portfolio 1 is BABA
Portfolio 2 is VTI

pdavi21
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Re: AliBaba

Post by pdavi21 » Wed Jun 12, 2019 1:06 pm

Nice work. Now sell it and buy VTI to lock in the gain.
"We spend a great deal of time studying history, which, let's face it, is mostly the history of stupidity." -Stephen Hawking

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Re: AliBaba

Post by HomerJ » Wed Jun 12, 2019 1:21 pm

SuperSaver wrote:
Wed Jun 12, 2019 9:09 am
Let's see how my prediction has fared nearly 5 years ago since BABA's IPO:

VTI: +44%
BABA: +70%

:sharebeer
Did you completely ignore dividends? Because VTI pays dividends each year, and BABA doesn't.
The J stands for Jay

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Re: AliBaba

Post by garlandwhizzer » Thu Jun 13, 2019 9:27 pm

AliBaba is very much in the high risk is certain/high return is possible category. I'm not a fan of individual stocks in general but allow myself occasionally to speculate in individual high risk/high return securities with a maximum of 4% of my equity portfolio allocation when I find something that has has the potential for huge gains that can make a big portfolio impact with only a 4% allocation. Few such opportunities exist today in the US IMO. AliBaba falls in this category and due to its obvious extreme risk it has been beaten up very badly which, ironically, sometimes offers a good entry point for such speculation. I am 72 years old and retired and the last thing I need is more risk. AliBaba's future risks and uncertainties both economic and geopolitical currently outweigh its future potential gains from my point of view. I'm not interested. For risk tolerant and volatility tolerant young investors it might be a different story. It is basically an EM/China AMZN and in the probably unlikely possibility that the trade war/Chinese economic downturn turns out favorably it could skyrocket for a long time similar to AMZN. Buying it, however, is more like gambling than investing. In the long term, gamblers tend to lose and investors tend to win.

Garland Whizzer

quantAndHold
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Re: AliBaba

Post by quantAndHold » Thu Jun 13, 2019 11:32 pm

HomerJ wrote:
Wed Jun 12, 2019 1:21 pm
SuperSaver wrote:
Wed Jun 12, 2019 9:09 am
Let's see how my prediction has fared nearly 5 years ago since BABA's IPO:

VTI: +44%
BABA: +70%

:sharebeer
Did you completely ignore dividends? Because VTI pays dividends each year, and BABA doesn't.
No, they’re both at 44%. No idea where OP got 70%.

alibaba123
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Re: AliBaba

Post by alibaba123 » Sun Jun 16, 2019 7:37 am

I got a shock i thought you guys made a thread about me.

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