Alibaba: Think Shopify, Not Amazon

These days when people hear of investing in China they equate it with slowing growth & high risk, mainly due to the trade war, rampant fraud risk, and the possibility of a mass delisting. While those are legitimate claims for not investing in China and giving Chinese companies more modest valuations compared to American counterparts for some reason it only applies to Alibaba, not JD.com or Pinduoduo, two principal Chinese e-commerce competitors. At the end of the day for long term investors that can stomach volatility, China is still pretty attractive, while slowing, China’s GDP is growing way faster then US GDP, the Chinese culture adapts to new technologies a lot faster than the rest of the world, and there is significantly less analyst coverage. It’s like the back bowls of a mountain, it’s beautiful for the skilled skier but if you don’t know what you’re doing you will surely get killed. When the market finally wakes up and realizes that Alibaba business is significantly better than other Chinese businesses that trade at significantly frothier valuations with fewer prospects, it will correct itself and Alibaba will trade at over $400.

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