Alibaba Group Holding (BABA)

A play on the Chinese consumer. It has pulled back a great deal. The Chinese market was off 30% in the 3^rd quarter alone, which is pretty remarkable. The penetration of Internet sales in China will continue. The real question is, has confidence been shaken sufficiently by the crash in the stock market to persuade people to reign in their horns. One good thing about this company is that it is not a conspicuous consumption that the Communist Party has been targeting. As a long term play on the Chinese consumer, it is probably not a bad Buy now, but it might not actually go anywhere for the foreseeable future because people will be worried about China. Until we see some strength in Chinese domestic consumption, that may be enough to keep a lid on things.

It is expected to fall 50% from its current price level. He would lighten up. There are 1.2 million merchants that shipped empty parcels. They do this to get a high ranking. They are aware of this issue. They have the most fake products of any Chinese E-commerce company.

The numbers are coming in the way he had hoped. He is buying this as a five-year project. They are strategic in what is going to happen in China, and he thinks China is going to be good, not bad. As you convert into a consumer driven economy, as the Chinese are doing, this company is strategically placed for when the Chinese consumer does well. They are very big and mobile.

Charts look a bit negative. Price is below all the moving averages, the 50, 100 and the 200 day, and are trending lower. The reason is most likely because it is in China. Trading at 27X forward earnings with a 23% long-term growth rate, but that growth rate could be volatile given what is happening there.

To him, this suffers from one fatal flaw, in that it is located in China, and the visibility he has there is extremely limited, so he would pass. He would prefer Amazon (AMZN-Q).

An online commerce retail company. She would not be buying this because it is trading at a huge multiple. Even though it has pulled back from its IPO, it is not cheap. A lot of the price is predicated upon momentum and expectation, and it can’t be justified by traditional valuations.

This is a platform that the Chinese are using. The Chinese are behind us. They haven’t built as many shopping centres and have a population that is used to using online more than going to the mall. This will provide a multitude of services and the platform looks good. This could be a long term play for decades.

This is an expensive stock. It came out of the gates with so much hype that it has been difficult for investors, with such a steep valuation and such high expectations.

It would be nice to have a longer time frame, but it has a base of around $81. The top of the trend of $86-$87 is probably going to be its support. If it breaks down through that, we know it is going to $81. Pretty good risk/reward.

Some of the recent concerns are that they are getting sued by places like Gucci, etc., for presumably knowing that some of the goods are being sold that are counterfeit. Valuations are actually not too bad, and their growth characteristics are quite incredible going forward, but treat this was some caution.

She doesn’t own this because it is a valuation issue for her. Ownership is still quite largely held by the founders. It trades at a very huge multiple. For stock that trades at 40 or 50 times earnings, if it stumbles and drops 10%-30%, it is still very difficult for her. There are a lot of expectations built into a name like this.

China is going to become the largest consuming country and these guys are the box on the supplier as far as purchasers are concerned. He thinks this one could really surprise you on the upside. The price has stabilized here.

The IPO hit $120 at one point. He would definitely be looking at buying this name right now. It is in a perfect position. A big competitor to some of the big names in the US. One of the names he has enjoyed with some good success, is the PowerShares Golden Dragon China ETF (PGJ-N). He doesn’t see this stock in that, but it would certainly fit in nicely.

Has stayed away from US non-domiciled companies. He has uneasiness with the financial reporting. There have also been rumours of counterfeiting, etc. There are other places where you can be more confident.

Eventually the price comes down to the fair market value. It is a matter of timing. This stock is disconnected from its fair market value.