oRisk in China

The implied argument here is that the BABA thesis does not depend much on its business fundamentals. Instead, the Chinese government is a central part (or even all) of the thesis.

As just mentioned, it is a 100% valid argument to me, and I am not here to dismiss it or prove it wrong. I am here to provide my perspective for a full view. And I invite BABA investors or potential BABA investors to consider the following aspects.

First, I feel the argument is border-lining a political or ideological discussion. Not say political or ideological considerations are not important in investment decisions – to the contrary, they are very important. However, they are difficult to quantify. To me, investing is pretty much all about PRICING risks. It is hard to put a price tag on risks that you cannot quantify. As such, I won’t dwell more on this issue here myself. I recommend Ray Dalio’s recent book entitled “Principles for Dealing with the Changing World Order” for readers who are interested in his view on politics and ideologies. I feel he has deeper insights about China than most Chinese themselves. And, of course, he understands the West deeper than most westerners too. A few quotes from his book are provided below: