Alibaba has undergone a sudden and significant reorganization of its management structure. Daniel Zhang, previously serving as Chairman and CEO of Alibaba Group, will now step down from both positions and assume the role of CEO of Alibaba Cloud unit. Eddie Wu, one of Alibaba's co-founders, will take over as the Group CEO, while Joe Tsai, another co-founder, will become the chairman. Unlike Zhang, both Wu and Tsai have been with Alibaba since its inception. Wu initially served as a technology director in 1999 and possesses extensive experience in the company's core e-commerce business, monetization, and technology, making him a logical choic to oversee the entire group. Tsai previously held the position of the company's chief financial officer until 2013 and currently serves as executive vi
Alvin ChowCertificated Individuals
Tiger Certification: Dr Wealth CEO. Focuses on momentum, value and growth stocks in China, US and Singapore.
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Jack Ma is Changing Alibaba Behind the Scene
Jack Ma is Changing Alibaba Behind the Scene
Is China Bull Market Finally Here?
For two years, China's stocks have experienced a bear market, putting even the most patient investors to the test. Several false starts have occurred, where initially promising gains reversed course, leading to understandable investor skepticism about China stock recovery. To mitigate disappointment and avoid impulsive selling, it is better to set low short-term expectations. On the other hand, maintaining high long-term expectations can serve as motivation to remain patient and hold investments for a potentially significant future payoff. This attitude characterizes one approach to the current rally in China. The recent rally in China stocks can be attributed to the Politburo meeting, during which the narrative supporting the economy was emphasized. Top leaders made commitments to provide
Is China Bull Market Finally Here?
The Fed may raise 0.25% one last time this year
The Federal Reserve is convening once again to discuss interest rates over the next two days. Based on my analysis, I predict that there will be a 0.25% increase, marking the final hike for the year. Here's why. The first consideration is the impact that rate hikes have already had on the banking system. Banks have been hit hard by mark-to-market losses on their treasury bill holdings, as rising interest rates have pushed bond prices in the opposite direction. Several banks, including Silvergate Bank, Silicon Valley Bank, Signature Bank, and most recently First Republic Bank, have already suffered significant losses as a result of the recent rate hikes. Clearly something has broke. Given this situation, it seems unlikely that the Fed will adopt an aggressive stance on rate hikes in the nea
The Fed may raise 0.25% one last time this year
Netflix down 40%: bad price, good future?
1. $Netflix(NFLX)$Netflix share price has tanked 40% since the start of the year, and that’s just a span of 3 weeks. The reasons were a mix of the macro environment (interest rate rising causing a valuation reset) and Netflix’s earnings guidance for the next quarter.2. The latest earnings per share of $1.33 crushed consensus estimates of just $0.82, while revenue of $7.71b was in line with expectation. Netflix added 8.3m customers in the past quarter but the projection for Jan-Mar 2022 was a low 2.5m. That is even less than the 5.9m forecast by analysts. Netflix share price tanked 20% on that faithful day the guidance was given.3. It should be obvious by now that the positive effect of the pandemic - putting people at home and they have nothing to
5 Takeaways from Buffett's FY2021 Shareholder Letter
Warren Buffett released his well-anticipated FY21 shareholder letter on 26 Feb 2022. Here are 5 takeaways. $Berkshire Hathaway(BRK.B)$ #1 Berkshire has the most plant and equipment among American companies "Berkshire owns and operates more U.S.-based “infrastructure” assets – classified on our balance sheet as property, plant and equipment – than are owned and operated by any other American corporation. That supremacy has never been our goal. It has, however, become a fact." That's a cool fact. While the world is touting asset-light businesses, here we have Berkshire being the asset heaviest company in America. It wasn't deliberate but I think he saw these asset-heavy companies being irreplaceable (insurance, oil & gas and rai
5 Takeaways from Buffett's FY2021 Shareholder Letter
Why dividend ETFs may not be worthwhile
Who doesn't love getting passive income from dividends. But picking dividend stocks isn't passive and some investors want the reward without the work. Dividend ETFs can be a convenient way to do that.I went to do some research to see if I could find any interesting dividend ETFs over the past week. To my dismay, their value propositions aren't good enough. Let me explain.Dividend gains, unlike capital gains, are often taxable for investors. The US offers the most number of ETFs, over 2,000 of them, but it attracts a 30% dividend taxation for foreign investors. This would reduce the actual dividends received, and not to forget having to pay for the ETF fees too.I deem a good dividend ETF as one that is broadly diversified and could distribute at least 5% dividend yield.Global X SuperDividen
Charlie Munger halved stake in Alibaba
Munger is a well-known China bull. It became even more evident when he bought a substantial position (19% of the portfolio) in Alibaba via Daily Journal Corp in the first quarter of 2021.He doubled the position in Alibaba $Alibaba(BABA)$$Alibaba(09988)$at the start of 2022. Many investors look upon Munger as an influential investor and take heed in the things he say and do. Despite the tumbling share price, Alibaba investors found comfort in the wise man's 'endorsement'.But it all changed when Daily Journal's position in Alibaba was reportedly halved. It is optically damaging because it raises questions (did Munger think that it was a mistake) and dents confidence at the same time. It is likely that some
Buy low sell high vs buy high sell higher vs buy and hold
1. We don't trade the markets, we trade our beliefs about the markets. A good quote from Van Tharp. It is very true as we know there are many different investing or trading strategies out there.2. Some believe buying low and selling high is the only ironclad way to make money. It doesn't take a genius to understand that. This would result in investors focusing on valuation - is the price higher or lower than the value?3. This group believes in the mean reversion effect - what goes up must come down and what goes down must come up. Hence, they buy low and wait patiently for the rebound to happen. They are known as the value investors.4. Some believe buying low and selling high is dangerous, especially during a downtrending market. A stock that has become cheap can go down even more and be c
Hello stagflation
US Labor Department data showed that the consumer price index jumped 7.9% from a year ago following a 7.5% annual gain, the highest yoy gain in 40 years. What is high for US would be high for everyone else eventually. Even if you are not an investor, you will be concerned about the rising costs of living. It doesn't feel good to pay for higher prices on necessities and leave you with less money to buy stuff you desire. Air ticket prices may go up just when you thought you could travel after two years of Covid.How likely is inflation going to persist?Some believe that the commodity price spikes were caused by the ongoing war between Russia and Ukraine and hence, prices should come down should the war ends. This is only one of the two factors. The war did cause a sudden spike in prices in th
Hotel profitability might take a while to recover
1. My family was on a staycation last weekend and it told me more about the state of the hospitality sector.2. Hotels were hit hard by the pandemic and even after two years, Singapore has not fully open to tourists. But some signs of recovery have been underway.3. The improving occupancy rate was obvious to me during breakfast where the restaurant was filled to the brim. And it was clear that the hotel was severely understaffed to be ready for such a crowd.4. There were long queues for every station and the food were not prepared well. The shrimp wanton noodles had neither shrimp nor wanton. A staff, who was clearly untrained, served 3/4 milk and 1/4 tea to another customer. 5. The restaurant crew were generally flustered and trying to keep up. They were doing their best but it was too ove
Safe to buy stocks now
Learn the fundamental and technical reasons why I think it is a safer time to buy stocks now compared to a month ago.
BYD is ousting Tesla as the top EV seller in 2022
The electric vehicle competition is intense and only to get worse as legacy automakers as well as tech companies are rushing into the space to fight for a pie of it.Buffett famously said that this isn't a good sign as a similar pattern happened to gasoline car makers in the 1920s. There were over 2,000 brands and only 3 remained and all were not doing well. Competition kills profits.Ironically, he invested in BYD, $BYD COMPANY(01211)$the China EV maker in 2008. Perhaps it was less competitive in those days and BYD had other businesses that include making batteries as well as electronics assembly.Berkshire bought BYD stake for $232 million and it is now worth $9.3 billion. That is a 39x return in 14 years or a compounded annual return of 30%.The v
6 Trade Ideas from the Singapore Trading Festival
The first half of the Singapore Trading Festival organised by SGX and EquitiesTracker has just ended over the weekend. Royston from New Academy of Finance and I took to the stage to share about 6 trade ideas for 2022. We agreed to each share an idea for every angle - value, dividend and momentum. I thought it would be good to repeat it here. These are not investment advice. They are just ideas for you to explore further should you be interested.Royston shared about $SEMBCORP INDUSTRIES LTD(U96.SI)$Sembcorp Industries (U96) and how the restructured Sembcorp Ind is more attractive to institutions after divesting Sembcorp Marine and the move to the greener, ESG direction.He thinks $ASCENDAS REAL ESTATE INV
Investing with numbers or stories
Some investors swear by using a quantitative approach to investing while others believe that numbers are less important when compared to qualitative analysis.Each has its valid concerns. The quants believe that humans are full of biases and it is not possible to overcome them easily unless one is to makae investment decisions based on numbers alone. But to the qualitative tribe, they believe that numbers are historical and not predictive of the future. You need to make a judgement call on how the future will turn out in order to make a good investment decision today.Whenever you see conflicting views online, it is important to know the context that they are making those views. Otherwise you will feel lost and confused or worse, adopt a view and apply it in a wrong context.Allow me to shed
Bitcoin Regains $30k, Tech Stocks Slide
The prices of cryptocurrencies usually mirror the price movements of high-growth tech stocks since both are highly responsive to changes in interest rates. Consequently, the substantial rate increases in 2022 significantly impacted both asset categories, causing them to falter as liquidity decreased. Many investors sold off these risky assets and sought refuge in safer Treasury bills, which not only provided higher interest rates but also guaranteed capital protection. However, in the current year, individual cryptocurrencies and high-growth stocks have begun exhibiting more distinct and independent price movements. It appears that interest rates are no longer the primary driving force behind these movements, possibly due to the proximity to peak interest rates and the resulting stability.
Bitcoin Regains $30k, Tech Stocks Slide
Facebook Reels is a force to be reckoned with
1. $Meta Platforms, Inc.(FB)$Meta is really taking TikTok very seriously that it is making Reels a focus now. YouTube had a lot more success with videos until TikTok offered short videos that became a hit.2. Never before a Chinese company was able to produce a social media platform that is popular in the West and TikTok's success has made the big players panic. 3. TikTok already had 1 billion monthly active users. They were the fastest to hit that milestone:- TikTok: 5.1 years- WeChat: 7.1 years- Instagram: 7.7 years- YouTube: 8.1 years- Facebook: 8.7 years4. In terms of monthly active users, Facebook is still champ:- Facebook: 2.9 billion- YouTube: 2.6 billion- Instagram: 1.5 billion- WeChat: 1.3 billion- TikTok: 1 billion5. TikTok is in the big bo
Value was dead. Now is growth’s turn.
I was asked at the recent Maybank Invest ASEAN event, "is growth investing is dead."Ironically I was asked whether value investing was dead 3 years ago in another event. If I may help you recall, growth stocks were all the rage in the last few years. Many called the death of value because we were living in an age of disruption. Many companies were going to change the world and old ways of doing business were said to be obsolete.Value stocks were underperforming and investors dragged them down further by selling them and moved capital to growth stocks. Few cared about valuation. It was all about paying for future growth. Come Nov 2021. The tide changed. Easy money was retreating and rates were rising. The disruptive stocks began to crash. High growth rates were shunned because future value
How to value loss-making companies
Many young, fast-growing companies have managed to list on the stock market in recent years. What used to be exclusive to venture capitalists have now been tradable by retail investors.But investors are not used to analyzing such companies - they are making losses and popular price metrics like PE ratio are unusable. I would even say that any price-based metric would be less useful as loss-making companies often hold a large cash pile after rounds of fund raising.This cash pile is worth something and price-based metrics only consider market capitalization without the cash.Enterprise Value would be a better measurement as it is calculated by deducting cash from the market capitalization and adding any debt the company owe.Debt is often non-existent in loss-making companies because no bank w
No salaries for Sea executives is a signal
Forrest Li, CEO of Sea Ltd, wrote a memo to rally its staff to achieve positive cash flow for the company as fast as possible. The bearish sentiment has made fund raising difficult. To achieve the goal, the management will forgo salaries and rein in expenses. The message was specific to cash-based compensation and that could mean share grants may continue for the executives. That could be limited in scope too considering that Forrest didn't receive any stock options since 2020. About 10,000 stock options were given to the management in 2021. Estimated to cost just US$150,000.In FY21, the directors and executives received US$6.4m in compensation. Compared to the cash flow from operations of US$209m, it is a mere 3% difference. Unlikely to move the needle for Sea. The signalling is more impo
200 stocks in S&P 500 have made 1-year lows
US stocks were walloped this week. We haven't end the week but S&P 500 $SPDR S&P 500 ETF Trust(SPY)$has lost 6% already. Worst weekly performance since Mar 2020 (Covid).The Fed hiked interest rate by 0.75% and it was the largest since 1994. Market initially rallied but died the following day.200 out of the 500 stocks in S&P 500 have made 1-year lows. That's almost half of the constituents of the index. These are blue chips.There were 15 stocks that lost more than 50% from a year ago. Most of them are in the travel sector which is weird considering the world is opening up. And we even have an ex-trillion dollar club member, Meta Platforms, among these losers too.1. Meta Platforms -51%2. Under Armour -54%3. Warner Bros Discovery -55%4. Wy
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