Investing Hacks: Why did Charlie Munger double down Alibaba? Is he right or wrong?
$Alibaba (BABA.US)$ stock price was trading lower before the bell after earnings annoucement on Thursday.
Alibaba reported quarterly earnings of $2.65 per share which beat the analyst consensus estimate of $2.55 by 3.92 percent. This is a 21.6 % decrease over earnings of $3.38 per share from the same period last year.
The company reported quarterly sales of $38.07 billion which missed the analyst consensus estimate of $38.83 billion by 1.97%. This is a 12.35 % increase over sales of $33.88 billion the same period last year.
Alibaba lift Chinese-concept stocks?
The company reported quarterly sales of $38.07 billion which missed the analyst consensus estimate of $38.83 billion by 1.97%. This is a 12.35 % increase over sales of $33.88 billion the same period last year.
Alibaba lift Chinese-concept stocks?
The Chinese e-commerce giant cut its full-year forecast in November amid heightened competition and macroeconomic pressures.
Alibaba is one of the big playersin China's e-commerce industry, but its shares were down 49% in 2021 and 7.6% in 2022 while $S&P 500 Index (.SPX.US)$ was up 27% in 2021 and down 11% in 2022.
Whether it could be a booster for the market, especially Chinese-concept stocks became a concern for investors.
- Why is Munger betting on Alibaba?
Interestingly, a 13F filing from the Daily Journal Corporation, dated January 4, 2022, revealed that Charlie Munger, Warren Buffett's longtime confidante and business partner, doubled his bet on Alibaba in Q4 2021. Charlie Munger is the chairman of Daily Journal, a newspaper publisher with a sizable stock portfolio of its own.
According to the filing, the portfolio weight of Alibaba equity increased from 20% in 3Q 2021 to 28% in Q4 2021.
Why invest in China? And why Alibaba?
Because "we got morestrengths per dollar invested. In China, the companies we invest in are stronger relative to their competition and priced lower. That's why we're in China.”
Very simple reason, but it reveals one of the most investment philosphies of Charlie Munger, which was often mentioned by value investors.( For more: check our free course on this topic）
Want to learn more about investment philosophies from the legendary investors of our time?
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- How to check a company's valuation and institutional holdings?
>>BABA - Detailed Quotes - Analyses - Company Valuation/Institutional Holdings
Shown as the data, Alibaba's PE was in its lower range, well below the sector average. Go to the quote page for more details.
- How to check a company's valuation and institutional holdings?
>>BABA - Detailed Quotes - Analyses - Company Valuation/Institutional Holdings
Shown as the data, Alibaba's PE was in its lower range, well below the sector average. Go to the quote page for more details.
For more investment knowledge and trends, visit Courses in the Community.
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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totototototo : What? 90, just shut down the company, BABA.
Moomoo Learn OP : In China, the companies we invest in are stronger relative to their competition and priced lower. That's why we're in China.
Is Charlie Munger right about Alibaba this time?
PlutoMoo102685100 : Will munger get margin called?
Kopi C Gao PlutoMoo102685100 : He need to uses margin meh? Haha
BigBadBear : He doesn’t buy for the shares to go up today. It doesn’t matter whether baba goes to 80 or 60 in 2 weeks or 2 months.
Milk The Cow : He may be right, but I think the risks are too high due to many reasons, just like $Tesla (TSLA.US)$ , politics.
But I trust tesla more as they show good reports & their products are currently the best in which no one can take over for now. Even at their worst, they still manage to climb back up.
$Alibaba (BABA.US)$ got potential but it just that it got blacklisted by their government.
Plus they have competition from other companies.
Milk The Cow Milk The Cow : Not to say, the US-China trade war... in which I already lost track of it![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
70126348 : It will soon fall below the issue price.
Silverbat : Probably will drop more to 45
FRONT STREET : I think he's correct.
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