2020 ends not with a bang....but not with a wimper.

[CordMcNally]

Google, Amazon, and Ali are reaching critical mass where new growth is tough

Again, one of those companies is in a very different situation that the others.

[Max Power]

Do fundamentals really matter if there are outsized factors that have the potential to suppress performance loft the foreseeable future? To use your analogy, if BABA was in Ohio, it would be seen in a different light, but it’s not, so how does it make sense to pretend that it is?

Yes, fundamentals always matter. In the longer term, that is.

Any company can fly high (or in this case, fly low) for awhile from hype, rumors, anticipation, etc. Tesla has done it for years and years now, but it usually can only carry most ticker symbols for a few years before the novelty and the brand name and the expectations must translate into actual piles of earned green money.

Any consistently profitable company will grow, get acquired, etc. They will also start paying dividends... and that profit is what dividends are based off. Apple would be your example there. If they weren't profitable by now, no dividends and crashed out price. Google, Amazon, and Ali are reaching critical mass where new growth is tough, so they will all probably start doing dividends sometime this decade.

[TheDangerZone]

Yes, of course I'm down on BABA in terms of unrealized gain/loss.

Everyone is down, but I have done pretty well buying the big dips and mini-crashes for most of 2021 since they're based on nothing actually bad from a fundamentals and profits standpoint. I think I "made" 10k in the day the delisting talk started buy buying a block around open and selling the very next afternoon. Alibaba is still a quite sizable part of my portfolio. I still like it and love the volatility. I still buy and sell it and sell options on it. The talk of investors losing everything due to delisting was crazy... nice way to start WW3 if that actually happened and they wiped out 500 billion or more from US brokerages and hedge funds and states and elite and individuals overnight lol.

...Mainly buying more and more NVO on the dip this week... Wegovy supply issues, lol. I think Viagra had supply issues at one time too. Ha.
My holdings right now are SPY index > GOOG >> NVO > BABA > FWRD > IBB > VWO > many other singles and funds and reits and etc. NVO passed BABA in the past few months on my holdings list, but I bought and sold many more of BABA. I like both.

Nobody bats 1.000. I sure don't. Still, when a stock is depressed despite good earnings, profits, products, market share as Ali is... it won't stay down indefinitely. We shall see.

Do fundamentals really matter if there are outsized factors that have the potential to suppress performance loft the foreseeable future? To use your analogy, if BABA was in Ohio, it would be seen in a different light, but it’s not, so how does it make sense to pretend that it is?

[Max Power]

Can we get an update on your BABA position? The 200 shares you bought in July are down ~50% (assuming you held). Continuing to plow money in? It would seem their P/E ratio would be even better now.

I usually don't follow individual stocks (have no idea what TSLA or GME is doing lately) but I remembered this discussion over the summer and randomly thought to check back on BABA this evening.

Yes, of course I'm down on BABA in terms of unrealized gain/loss.

Everyone is down, but I have done pretty well buying the big dips and mini-crashes for most of 2021 since they're based on nothing actually bad from a fundamentals and profits standpoint. I think I "made" 10k in the day the delisting talk started buy buying a block around open and selling the very next afternoon. Alibaba is still a quite sizable part of my portfolio. I still like it and love the volatility. I still buy and sell it and sell options on it. The talk of investors losing everything due to delisting was crazy... nice way to start WW3 if that actually happened and they wiped out 500 billion or more from US brokerages and hedge funds and states and elite and individuals overnight lol.

...Mainly buying more and more NVO on the dip this week... Wegovy supply issues, lol. I think Viagra had supply issues at one time too. Ha.
My holdings right now are SPY index > GOOG >> NVO > BABA > FWRD > IBB > VWO > many other singles and funds and reits and etc. NVO passed BABA in the past few months on my holdings list, but I bought and sold many more of BABA. I like both.

Nobody bats 1.000. I sure don't. Still, when a stock is depressed despite good earnings, profits, products, market share as Ali is... it won't stay down indefinitely. We shall see.

[xraygoggles]

Baba is a sitting duck - CCP has it completely in its crosshairs.

Risk/reward not good now.

[CordMcNally]

Can we get an update on your BABA position? The 200 shares you bought in July are down ~50% (assuming you held). Continuing to plow money in? It would seem their P/E ratio would be even better now.

I usually don't follow individual stocks (have no idea what TSLA or GME is doing lately) but I remembered this discussion over the summer and randomly thought to check back on BABA this evening.

If he loved it then...

[TheDangerZone]

I bought 200 shares of BABA today. Some squeamish folks or some pressure from taxes or fines shouldn't take away from the fact that it's a VERY solid company with a P/E a fraction the size of Amazon's or other much weaker peers' ratio:
https://finance.yahoo.com/video/alib...093000466.html

Not only does Alibaba have a better company in terms of customer base size and tech versus Amazon, and they have cheaper labor and the products they sell right by them (and they can buy the companies if they choose). Ali does much much more than just commerce... their AI development is stronger than nearly any US assembly manufacture plant or distribution warehouse - in any industry. How many US companies can have a robot find a RFID tagged box in the warehouse shelf, shoot it 50mph on conveyer belts, and load it onto a truck on the far end of that giant warehouse with another robot? Almost none.
Amazon is a fine company and highly profitable also, but they're reliant on the supply chains from Asia to get the vast majority of their products to the USA. Amazon's advantages are that the average American's income is much higher (can make more money even with hundreds of millions fewer buyers) than the average Asian's and that their warehouses/trucks are obviously in the US for shipping... but again, those Amazon warehouses are largely dependent on being stocked and re-stocked with almost exclusively Asian-made products.

...and yeah, I'm "down" on BABA this year and last (avg buy price around $220... buying heavy since Q4 2020 Jack Ma dip) if you want to talk unrealized gain/loss. I have done much better on NVO and GOOG and other picks, but I think BABA will be the month or quarter's winner of my portfolio soon enough also. Alibaba remains a buy through and through with a great business and a P/E of below 30 right now to Amazon's 70+ and sometimes recently 100+ ratio.

Can we get an update on your BABA position? The 200 shares you bought in July are down ~50% (assuming you held). Continuing to plow money in? It would seem their P/E ratio would be even better now.

I usually don't follow individual stocks (have no idea what TSLA or GME is doing lately) but I remembered this discussion over the summer and randomly thought to check back on BABA this evening.

[Tim]

I concur fully, but with no trading fees, it is definitely easier than ever to dump a loser quickly or free up money to plug into something with high potential. People are also wising up to the fact that the historic advice of always holding stocks for year for tax purposes is not too important... locking in gains matters much more.

But yeah, nearly anything that is a solid company now... will be in 5 or 10+ years also. I have sold GOOG shares only once in the last decade (sold maybe 10% of my GOOG to buy BABA at IPO), and I didn't do much better on what I bought with the money than I would have just holding GOOG. Kinda starting to feel that way about NVO now also... was planning to flip it after a good QE or two or three due to Wegovy, but might be a long term hold-and-build position stock where it will be hard to get more growth elsewhere. We shall see.

They are ALL speculative investments, man. Every single one. Nobody knows anything...

VOO is only valuable if USA keep working, producing, and 401ks and hedge funds keep buying. It can crash on fear too.
BABA can stay low as long as people are scared. If it were in Ohio, it would be a $500+ per share stock based on earnings and USA peers.
GOOG can keep making money hand over fist. It will only increase at a rate as valuable as funds and people want to pay for it.
LitCoin, BitCoin, SpitCoin, PitCoin and whatever else don't produce anything... yet they're valuable if people buy them, crash when interest wanes.

Basically, the only hypothetical non-speculative investment would be one where you knew with 100% certainty that many funds and people were going to buy blocks at a certain price... essentially, if you knew its support/resistance. That doesn't exist, though. Any stock from Apple to Walmart to 3M could get smashed tomorrow if funds dumped it and/or buyers weren't buying it. The P/E or product pipeline or book value is useful and fine, but they are meaningless without a market for the shares. Don't kid yourself that there are "safe" and "logical" investments or that stocks correlate to earnings or book values. Nobody knows anything

Wow, some serious assumptions here. There can and likely is value in almost any investment. Nobody knows anything? The investment banking business is all over valuations. You don't need to even buy or sell a single share. M&A is always churning, The question is when is a public company over/undervalued by the market.
There is an intrinsic value and the question is has the publicly traded shares been fairly priced.

https://largest.org/technology/privately-owned-companies/

There is value in assets and a business. Dell was public and went private and public again. Valuation is tricky.That is an investment not trading the market in a stock.
Essentially support and resistance is a trade not an investment.

[mgchan]

An index is more sensitive to macroeconomic, political, and other global issues than most individual stocks. In the short term, most stocks will track the index just because of investor sentiment but in the long run it's the company's performance that will matter. In an index you're necessarily exposed to financial companies, airlines, movie theaters, malls, technology, etc.

Indexing and other types of diversification are just means to reduce volatility (both upward and downward). You actually get exposed to more risks, but the magnitude of risk is lower. At extreme volatility, there is a higher risk of ruin, but even just a small basket of equities is enough to avoid a complete loss of capital.

The people in business aren't thinking in terms of losing $27 billion in one day because the stock price went down. The media loves to say "Zuckerberg lost $5 billion dollars because of this" just because Facebook goes down 5% or something. But if someone with a $1 million dollar house sees their valuation on Zillow go up to $1.1 million or down to $900k, they shouldn't consider it equivalent to making or losing $100k. Getting out of that mindset will help you be comfortable with volatility.

[TheDangerZone]

They are ALL speculative investments, man. Every single one. Nobody knows anything...

VOO is only valuable if USA keep working, producing, and 401ks and hedge funds keep buying. It can crash on fear too.
BABA can stay low as long as people are scared. If it were in Ohio, it would be a $500+ per share stock based on earnings and USA peers.
GOOG can keep making money hand over fist. It will only increase at a rate as valuable as funds and people want to pay for it.
LitCoin, BitCoin, SpitCoin, PitCoin and whatever else don't produce anything... yet they're valuable if people buy them, crash when interest wanes.

Basically, the only hypothetical non-speculative investment would be one where you knew with 100% certainty that many funds and people were going to buy blocks at a certain price... essentially, if you knew its support/resistance. That doesn't exist, though. Any stock from Apple to Walmart to 3M could get smashed tomorrow if funds dumped it and/or buyers weren't buying it. The P/E or product pipeline or book value is useful and fine, but they are meaningless without a market for the shares. Don't kid yourself that there are "safe" and "logical" investments or that stocks correlate to earnings or book values. Nobody knows anything

Interesting that the "nobody knows anything" mantra is being applied in this context to justify stock picking...

Google, Apple or Walmart or 3M could tank but you would be protected in an index, that's essentially the idea behind investment diversification.

I found this thread again because I saw in the news that China wants to crack down on internet giants and some tech founder lost $27 billion overnight. Something called Alipay may be on the government chopping block next and the stock has dropped accordingly. Isn't this what people mean when they say investing in Chinese companies carries outsized risk? Like Cord said above, it's not in Ohio so why price it and buy it and expect it to perform like it is.

[Larry Ragman]

I concur fully, but with no trading fees, it is definitely easier than ever to dump a loser quickly or free up money to plug into something with high potential. People are also wising up to the fact that the historic advice of always holding stocks for year for tax purposes is not too important... locking in gains matters much more.

But yeah, nearly anything that is a solid company now... will be in 5 or 10+ years also. I have sold GOOG shares only once in the last decade (sold maybe 10% of my GOOG to buy BABA at IPO), and I didn't do much better on what I bought with the money than I would have just holding GOOG. Kinda starting to feel that way about NVO now also... was planning to flip it after a good QE or two or three due to Wegovy, but might be a long term hold-and-build position stock where it will be hard to get more growth elsewhere. We shall see.

They are ALL speculative investments, man. Every single one. Nobody knows anything...

VOO is only valuable if USA keep working, producing, and 401ks and hedge funds keep buying. It can crash on fear too.
BABA can stay low as long as people are scared. If it were in Ohio, it would be a $500+ per share stock based on earnings and USA peers.
GOOG can keep making money hand over fist. It will only increase at a rate as valuable as funds and people want to pay for it.
LitCoin, BitCoin, SpitCoin, PitCoin and whatever else don't produce anything... yet they're valuable if people buy them, crash when interest wanes.

Basically, the only hypothetical non-speculative investment would be one where you knew with 100% certainty that many funds and people were going to buy blocks at a certain price... essentially, if you knew its support/resistance. That doesn't exist, though. Any stock from Apple to Walmart to 3M could get smashed tomorrow if funds dumped it and/or buyers weren't buying it. The P/E or product pipeline or book value is useful and fine, but they are meaningless without a market for the shares. Don't kid yourself that there are "safe" and "logical" investments or that stocks correlate to earnings or book values. Nobody knows anything

Sure, that is a fair argument, and sooner or later US equities will falter. But I don’t claim a crystal ball. Rather, I and most others here who have bought into the Bogleheads logic are making a bet with a lot of data on our side: largest economy, arguably the most dynamic, economy as well, best property owning legal structure, most transparent market, underwritten by the word’s reserve currency, etc. US equities are only the best game in town until they are not, but that isn’t yet.

[CordMcNally]

If it were in Ohio, it would be a $500+ per share stock based on earnings and USA peers.

But it's not so why make the comparison?

[Max Power]

... Just most of the time buy/hold is the answer.

I concur fully, but with no trading fees, it is definitely easier than ever to dump a loser quickly or free up money to plug into something with high potential. People are also wising up to the fact that the historic advice of always holding stocks for year for tax purposes is not too important... locking in gains matters much more.

But yeah, nearly anything that is a solid company now... will be in 5 or 10+ years also. I have sold GOOG shares only once in the last decade (sold maybe 10% of my GOOG to buy BABA at IPO), and I didn't do much better on what I bought with the money than I would have just holding GOOG. Kinda starting to feel that way about NVO now also... was planning to flip it after a good QE or two or three due to Wegovy, but might be a long term hold-and-build position stock where it will be hard to get more growth elsewhere. We shall see.

... something like 5% of the portfolio in speculative investments seems fine...

They are ALL speculative investments, man. Every single one. Nobody knows anything...

VOO is only valuable if USA keep working, producing, and 401ks and hedge funds keep buying. It can crash on fear too.
BABA can stay low as long as people are scared. If it were in Ohio, it would be a $500+ per share stock based on earnings and USA peers.
GOOG can keep making money hand over fist. It will only increase at a rate as valuable as funds and people want to pay for it.
LitCoin, BitCoin, SpitCoin, PitCoin and whatever else don't produce anything... yet they're valuable if people buy them, crash when interest wanes.

Basically, the only hypothetical non-speculative investment would be one where you knew with 100% certainty that many funds and people were going to buy blocks at a certain price... essentially, if you knew its support/resistance. That doesn't exist, though. Any stock from Apple to Walmart to 3M could get smashed tomorrow if funds dumped it and/or buyers weren't buying it. The P/E or product pipeline or book value is useful and fine, but they are meaningless without a market for the shares. Don't kid yourself that there are "safe" and "logical" investments or that stocks correlate to earnings or book values. Nobody knows anything

[Zaphod]

Right there with you on this. Regarding buy and hold, it is the right answer most of the time but it is also not going to apply in all cases. Easiest exception to identify is periodic rebalancing. Another is play money. I put @Zaphod’s doge coin wins in this category. Not sure how much he had invested, but something like 5% of the portfolio in speculative investments seems fine - and trade as appropriate. In my own case, I am repositioning for retirement since I am within 5 years of my nominal retirement date. Well, I keep trying to rebalance to ~60-40 to avoid SORR, but the rising market is forcing me to engage more often than I would like. I just looked and I am back up over 70-30. I need to shift some more to bonds, I suppose. Good “problem” to have.

it was tiny, 3k, but went nuts.

[Larry Ragman]

Not only am I in disbelief of the stock and housing market but also those who are patting themselves on the back for having "made" so much money over the past couple of years...without actually liquidating. We are all likely to be big winners and losers multiple times over the course of our careers...on paper.

Right there with you on this. Regarding buy and hold, it is the right answer most of the time but it is also not going to apply in all cases. Easiest exception to identify is periodic rebalancing. Another is play money. I put @Zaphod’s doge coin wins in this category. Not sure how much he had invested, but something like 5% of the portfolio in speculative investments seems fine - and trade as appropriate. In my own case, I am repositioning for retirement since I am within 5 years of my nominal retirement date. Well, I keep trying to rebalance to ~60-40 to avoid SORR, but the rising market is forcing me to engage more often than I would like. I just looked and I am back up over 70-30. I need to shift some more to bonds, I suppose. Good “problem” to have.