I just can't understand how the market is pricing this company! Considering the macro risks of investing in China, the zero covid tolerance policy and a slowing economy, this is still super cheap. Am I missing something?
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You're in good company. As you probably know, Warren Buffett's co-chair Charlie Munger was in this stock for part of last year and this year for similar reasons, and then dumped the stock as it kept slip-sliding lower.

I also attempted to catch the bottom on $BABA last fall for similar reasons. When it made a new low, we took the small loss and moved on.

It's one of those stocks where it's tempting to average down.
But the stock has yet to make a new near-term high. So the lower-risk play (see chart) might be to wait until it makes a new weekly or monthly high, and THEN buy.

In that case, the bet would be that Chinese smartmoney is anticipating that some of the dark clouds hanging over the stock - delisting threats, slowing growth, Chinese regulators, rising rates, etc - might go away in the future (for reasons that may not be entirely clear at the moment when BABA's stock finally makes its move).
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$BABA Technical Analysis Lesson
I am going to teach you how I use Technical Analysis to determine when to buy and when NOT to buy. While $BABA has grown exponentially over the past 5 years, its stock price is flat. Why is this?

Some will say its all due to the geo-political risk associated with China, the disappearance of Jack Ma, Covid, and many other reasons. The fundamental analysis is stronger than it was 5 years ago which makes it an incredible opportunity for a long term investment.

$BABA, in my opinion, is a tightly coiled spring that is ready to explode over the next 5 years. Now, as shown below, the weekly 20SMA has consistently acted as resistance, so any one who has been DCAing into this name is buying the dip wrong.

As a technical analysis investor, I wait until we finally breach the 20SMA on the weekly and see it forming support instead of resistance. The moment I see this, its time to enter my long term portfolio position.

I have NO idea when it will breach this level, it could be in the next 4 weeks, it could be the end of 2022, but TA shows me to NOT buy into this name until it is breached.

You can DCA all you want into this name, but I let the chart tell me when to buy and when not to buy. Right now, we are in DO NOT buy until it breaches.

I hope this helps educate you on buying the dip properly vs buying the dip blindly.
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$BABA is now the second biggest position in my portfolio. Check the revenue and free cash flow of this company! I can't believe I was able to buy this for 85 dollars per share. Thank you, Mr Market; feel free to keep crashing it so I can buy more!
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Irrational Behavior=ROI
As plenty of you know, I’m long $COIN. Recently they fell double digit % 3 consecutive days. As I mentioned daily that I was adding to my position, I reiterated around $55, that the more irrational the price movement, the more comfortable I felt pushing all my chips in (to any swing trade/contrarian play). Now, close to $70, that’s a pretty nice 2-3 day come up. $FB was the same recently, falling 25% overnight (irrational af) generating ~30% ROI over the next 2 calendar weeks. I try to be a buy and hold type, but sometimes the opportunities are too easy to pass up. I didn’t take advantage of the Coinbase bounce because I’m much more confident in longer term growth. I did add higher dollar amounts as it fell lower though. Added much more at $55 than I had at $80 or $100. I also did similar trades with $LU & $BABA recently, earning 20%-30% in less than 30 days. I can’t define “irrational” for others. It’s more of a mental model that I’ve developed to shortcut the analytical process. Requires a deep understanding of valuation and behavioral finance to execute confidently, and a lack of greed, but it works like a charm tho.
Conor's avatar
$2.5m follower assets
Selling Covered Puts
I bought covered puts in $BABA and $PUBM today with my excess cash. It's a great time to buy covered puts in my opinon on stocks that you wouldn't mind owning if your options got assigned.
I bought 10% below current share price and about a month out of expiry
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The Dark Side of the Market: The Short Sell
Everyone is very familiar with buying a stock but many are missing a huge opportunity within the market by not being educated on the short sell.
First off, what is a short sell? Short selling a stock is when you borrow the shares at a set price with the hopes of buying them back in the future for lower. Just as you want to buy low and sell high, you want to short high, and re-buy back in low.
What are the pros to short selling? You can explode the returns of your portfolio if you believe a company is extremely overvalued. For example $ZM $FVRR $PTON are all exceptional examples of overvalued companies last year that could have generated over 80% returns in 2 years.
What are the risks of short selling? Unlimited downside potential, hard to borrow shares with some brokers, unable to borrow shares in retirement accounts, and at times higher fees.
How do I utilize short selling? I primarily short a stock as it is transitioning from a stage 3 top into a stage 4 downtrend. If you are unfamiliar with this, it is called stage analysis and it shows the higher time frame trend of a stock.
Given The Feds major change in stance this year with higher interest rates, potential end of QE, war with Ukraine - Russia, and other macro headwinds - I saw a huge opportunity for stocks to decouple this year. At first, we saw small caps roll over which gave a foreshadowing of what is to come in the mid/large cap world. While some might use short selling as a way to make money from an overvalued company, I utilize short selling when macro headwinds are ahead and TA is confirming major breakdowns. A few examples of these have included $U $UPST $MDB $APPS $DKNG $NIO $BABA and many more.
There are major risks to short selling as I only utilize them as trades, but they have been a huge part of my portfolio this year instead of sitting in cash or staying long in many downtrending stocks.
No matter how much you believe in your stock over the next 5-10 years - understanding how to actively invest can lead to explosive returns if you can capture both the upside and the downside.
I have not taken 1 long in over 6 months as an will wait patiently for my watchlist stocks to base after decoupling. For example, I am bullish on $TWLO long term, but I have shorted it this year to increase my portfolio value to buy more shares when it transitions from stage 4 into stage 1.
It’s important to learn to play both sides of the market because only playing the long side misses out on so much money when the market is rolling over.
If you can’t short, you can always look into inverse ETFs such as $SPXU $RWM $SQQQ $SDOW.
Trade the trend. Use the profits to buy more shares of your favorite long term names. Rinse and repeat.
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Top Gainers Today @ 10am
Top Gainers Today: $MSFT, $V, $MA, $BABA, $BHP, $BKNG, $JD, $FCX, $PDD, $DDOG, $RIVN, $GFS, $NIO, $CSGP, $ENPH, $LI, $TECK, $ZTO, $BEKE, $TER
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$MSFT - Microsoft Corporation - Software - Infrastructure - $2116.95B - %Chg: 5.67%

$V - Visa Inc. - Credit Services - $441.16B - %Chg: 9.88%

$MA - Mastercard Incorporated - Credit Services - $349.87B - %Chg: 8.21%

$BABA - Alibaba Group Holding Limited - Internet Retail - $234.87B - %Chg: 5.55%

$BHP - BHP Group Limited - Other Industrial Metals & Mining - $180.69B - %Chg: 5.03%

$BKNG - Booking Holdings Inc. - Travel Services - $89.83B - %Chg: 5.30%

$JD - JD.com, Inc. - Internet Retail - $83.80B - %Chg: 8.56%

$FCX - Freeport-McMoRan Inc. - Copper - $69.60B - %Chg: 5.70%

$PDD - Pinduoduo Inc. - Internet Retail - $46.68B - %Chg: 9.67%

$DDOG - Datadog, Inc. - Software - Application - $41.65B - %Chg: 5.30%

$RIVN - Rivian Automotive, Inc. - Auto Manufacturers - $29.78B - %Chg: 5.30%

$GFS - GLOBALFOUNDRIES Inc. - Semiconductors - $27.60B - %Chg: 5.40%

$NIO - NIO Inc. - Auto Manufacturers - $26.55B - %Chg: 6.23%

$CSGP - CoStar Group, Inc. - Real Estate Services - $24.52B - %Chg: 6.95%

$ENPH - Enphase Energy, Inc. - Solar - $24.13B - %Chg: 12.10%

$LI - Li Auto Inc. - Auto Manufacturers - $23.31B - %Chg: 7.00%

$TECK - Teck Resources Limited - Other Industrial Metals & Mining - $21.86B - %Chg: 10.41%

$ZTO - ZTO Express (Cayman) Inc. - Integrated Freight & Logistics - $21.77B - %Chg: 7.80%

$BEKE - KE Holdings Inc. - Real Estate Services - $18.10B - %Chg: 6.25%

$TER - Teradyne, Inc. - Semiconductor Equipment & Materials - $17.99B - %Chg: 5.63%
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