As an Alibaba Christmas present, there is a great opportunity awaiting you! And I am NOT recommending to order your Christmas presents on Alibaba! On December 24, 2020, in Asia at the Hong Kong stock exchange, Alibaba shares dropped over 8%. Because the Chinese state wants to destroy the monopoly.
At the New York Stock Exchange, the downward trend continued. On NASDAQ the share has lost over 13%.
Alibaba's long term growth
The growth of Alibaba is steady, but it is very volatile. And currently, it is very close to the lower limit of the volatility band. It will be a very enjoyable investment in the next 2 to 3 years. I expect an 80 - 100% increase in value compared to today's value. Here you can play a little with the graph:
Why so much optimism about Alibaba's Christmas Present?
Well, it is about people ... precisely, about the person who owns the business: Jack Ma. I have full trust in his wisdom. He is a person, who embodies the turquoise Sprial Dynamics meme.
And due to that, he is far ahead of politicians, which are usually on a blue level. He knows, understands the consequences, and he creates the outcome of their actions! Even before these dogmatic politicians have decided which new rules and regulations they will introduce. I see him as
- a visionary like Elon Musk,
- an entrepreneur similar to Richard Branson,
- and a philanthropist like Bill Gates at the same time.
I have no doubt, that he will turn the situation into something good.
The solution might look like this
- Alibaba gives the Chinese state control over some parts of the business, that are less essential for Alibaba. So, Alibaba can focus again on the core business. That will strengthen its core even further in the future.
- The state can regulate access to the market and enable other new and smaller businesses to play a bigger role in some niches of the market.
- The customers will have a bigger variety of vendors to choose from.
- The additional competition will stimulate the market.
Even if it will become harder for local offline retailers. But, they already got to change their strategies due to lockdowns anyway. Those who did it smartly will survive. One may feel sorry for those who didn't learn their lesson ... that's natural selection. They still have a choice, to take a chance to evolve. Not choosing and not ripening the business is also a choice ... obviously not the best one.
Alibaba Christmas Present Prognosis
So, even if the Alibaba stock may drop another 10% below today's price, which is possible, but not very likely, I consider that as a turn around signal from the current downward trend. Which means, buy more! I have already placed a buy order for 221 HKD, and I cannot wait for the HKEX opening on Monday! I hardly ever invest more than 5% of my assets in an individual stock. But due to my confidence in Jack Ma's business sense, negotiation skills, philanthropy, and visionary wisdom, I am going to invest 10% in my Alibaba Christmas Present.
The prognosis for the next 2-3 years