What is Munger's reason for insisting on buying Alibaba?
Munger, a stock god who is nearly 100 years old, has been trapped by $Alibaba (BABA) for a year and keeps buying, Alibaba has become his third largest holding stock.
- In the first quarter of 2021, Alibaba's share price fell by 30% from a high level, and then Munger began to open a position at a cost of about 220-270 US dollars;
- In the third quarter, Alibaba's share price fell by 30% and began to make up positions around 140 US dollars;
- In the fourth quarter, Alibaba's stock price fell by another 30%, and the old man directly doubled his holdings to more than 600,000, becoming his third largest holding.
Some people have calculated that Munger is still losing about 20% at this time.
Why does Munger love Ali so much?
He said: I have confidence in China's economy and Ali.
In fact, Munger's operation is like Buffett's bargain-hunting in the past$Apple(AAPL)$.
In 2018, giants like Apple also showed a trend of halving; Buffett officially bought Apple's stock crazily this year and became$Berkshire Hathaway(BRK.A)$The first Awkwardness stock, in just over three years, Apple has turned six times from the low point:
In 2018, Apple's stock price fell by nearly 50%, while Buffett kept buying, and eventually Apple became the number one stock in $Berkshire Hathaway(BRK.A)$.
Later, in just over 3 years, Apple has doubled from its low point:
In fact, every time a high-quality asset plummets, it is an excellent buying opportunity.
So, why did Munger take a fancy to Alibaba?
Many people think that because$Pinduoduo Inc.(PDD)$$JD.com(JD)$With the rise of Alibaba, it has declined. Actually, you didn't see it.$Amazon.com(AMZN)$Our e-commerce business is also sluggish. But they all have a new business that is becoming a pillar, which is-Cloud computing.
Cloud computing is a collection of servers, about the size of a football field. This server stores and outputs data for enterprises through the network, provides computing power, and so on.Almost all of the various apps in our mobile phones rely on cloud computing.
Cloud computing belongs to the high-tech field and has a broad market. While this field is developing rapidly, the competition is also very fierce.
The strongest cloud computing company in the world is Amazon, and cloud services have become its core business. While Amazon's e-commerce business is growing sluggishly, cloud computing has been growing rapidly:
Due to the high technical requirements of cloud computing, most countries and regions are renting Amazon's cloud services. However, China has its own cloud computing, and it is also very strong.
The strongest cloud computing in China is Alibaba Cloud, which is technically not inferior to Amazon.
International authority Gartner report:
Alibaba Cloud won the highest scores in the four core evaluations of computing, storage, network, and security. This is also the first time that China Cloud has surpassed international manufacturers such as Amazon, $Microsoft(MSFT)$ , and $Alphabet(GOOG)$ .
The cloud computing market is huge, but only Chinese and American companies have mastered the core technology.
In the Asia-Pacific market, Alibaba Cloud's market share even surpassed that of Amazon and$Microsoft(MSFT)$The sum of.Among them, nearly half of listed companies in China are using Alibaba Cloud.
In 2017, Alibaba Cloud defeated Amazon to become the only cloud service provider for the Olympic Games. Therefore, Alibaba Cloud's technology was used in the last Tokyo Olympics and this Beijing Winter Olympics.
So, I think that's why Munger insisted on buying Alibaba stock.
By the way, Ali will release Q3 financial report for fiscal year 2022 on Thursday.At present, institutions' expectations are generally pessimistic.
But I think it doesn't matter. The decline in the stock price has already realized the negative. Once the financial report exceeds expectations, it will be a big rise.
So, I bought Ali yesterday, and I followed the plan to increase the position by 50% for every 20% drop:
$Alibaba-SW (09988) $
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good luck[强]