how's it going today guys welcome back
to the channel hope you're having a
great day so far so in this video we're
going to be talking about a stock that I
have had in my portfolio since April of
2017 and that is a company known as
Alibaba so I just recently took
advantage of this sale going on in the
market here with these Chinese stocks
we are officially obviously in a bear
market with a lot of these Chinese
knew I wanted to add some stocks to my
portfolio or really at this point in
time I wanted to add just one and
looking at the different stocks out
there I was trying to decide to decide
whether I wanted to invest in JD comm
buy some more shares of JD or Alibaba or
possibly look at General Electric and I
looked at these different stocks and I
said you know what I think that I'm
gonna add shares of Alibaba at this
point in time so I ended up buying 20
shares of Alibaba at a price of 139 97
for a cost of around 2800 now I did that
I think a little over a week ago so I'm
actually by the time I upload this video
probably even longer so I apologize for
not making this video sooner I've just
been doing a lot of traveling and didn't
have time to throw this together but I
wanted to update you guys on my position
here and really talk to you guys about
five of the biggest reasons why I am a
shareholder of Alibaba now before I get
into the video I just want to mention
that if you guys are interested in
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okay well let's go ahead and start off
by going over a brief history
of what has been going on with Alibaba
stock so personally like I said I
started buying this stock back in April
of 2018 and I'm gonna show you guys
exactly what point I began buying that
and it's pretty clear why I bought at
this point in time so back in January of
2017 that is when this rally really
began with Alibaba stock they went from
trading at about $90 per share to 175 in
just one year time that being a 95%
return so anybody who invested in
Alibaba stock it pretty much anybody who
bought it in 2017 I think it was just
about impossible to lose money on
Alibaba stock in 2017 it went up like a
rocket as many stocks did now keep in
mind this is a stock that had an IPO
price of $68 a share back in 2014 so
early investors of Alibaba if you held
that stock from 2014 to the end of 2017
you know you were looking at a really
nice return there so a lot of early
Alibaba investors were very happy with
this investment so then in January of
2018 towards the end of the month the
stock again went on a tear it went from
175 to 205 a share in one month time
again a 17% return in one month a lot of
people would be happy to get that return
over a year so when you see a stock
shooting up close to 20% in one month
that is when you might start your
concern and say okay you know what yeah
you want to see a stock going up in
price but for it to take off in such a
short period of time is definitely a red
flag in my book and now after that that
is when we started to see a little bit
of trouble with Alibaba stock we saw
that sell-off taking place in the end of
January and from February to April the
stock went from 205 down to 165 which
was a dip of about 20% so April of 2018
was when I began buying shares because I
saw that dip taking place I saw a 20%
correction with Alibaba I said you know
what this seems like a good entry point
for the stock and that is when I started
buying now did I go out there and spend
tens of thousands of dollars on Alibaba
stock I did not what I do my style of
investing is to accumulate shares over
time that way I can you know both dollar
cost average
and you know lower my cost basis for my
position so I don't like going all in on
a stock I'll buy a little bit and I'll
build into a larger position over time
now that was at the end of the trouble
here for Alibaba after that things
looked really good after April from
April to June this stock went from 165 a
share to $210 per share up 27% and I can
remember at that time people who I had
told that I had invested in Alibaba I
had bought two stocks Alibaba and
Facebook around the same time both of
those stocks went up like a rocket and I
was up like 20 to 25 percent in two to
three months time so I looked like a
genius but I knew damn well I was not a
genius I knew okay this does not seem
like any kind of appreciation that's
going to you know have any chance of
going for the long run I knew this was
going to be short-lived and that's
exactly what happened then we saw a
substantial correction taking place here
in June of 2018 10 now the stock has
gone from two tennis share to about 148
as of the most recent figures and like I
said I bought at 139 97 about 140 and I
feel that was a you know very fair
valuation a reasonable valuation for
these shares but anyways that is a price
history on Alibaba this is an update on
my purchase of Alibaba as of a couple of
weeks ago now I'm going to get into why
I'm actually a shareholder of Alibaba
stock primarily I mean there's a lot of
reasons to like this company but for me
I have five key reasons number one first
of all is the fact that the two things
that I'm the most bullish on right now
our e-commerce and digital marketing I'm
a shareholder of Facebook because I
think that's just the best stock to own
in my opinion for digital marketing
primarily for Instagram not so much for
Facebook I think Facebook is kind of you
know it's not dying off just yet but
it's definitely plateaued in the
interest level but I think there's so
much room to grow with Instagram and I
think that they're in the very early
stages of monetizing that platform so
Facebook I love Facebook because of the
digital marketing and I think that we're
only going to be seeing more and more
money being directed towards digital
advertising which is just going to push
up the rates people are paying for
digital ads and that's just going to be
more money for Facebook so
I'm very bullish on digital marketing
and advertising as well as e-commerce so
I just think ecommerce is going to be
huge I was an earlier shareholder I'm
not saying I was like a day one
shareholder of Amazon but I bought
Amazon stock in August of 2017 at 9:50 a
share now I ended up selling out at 1350
or so I had that really nice return
there in about six months but at that
point in time I said okay Amazon is
becoming overvalued I sold out and
obviously you know Amazon hit close to
$2,000 a share recently so to sell out
of 1350 obviously I left a lot on the
table but my opinion is that the
valuation of these of these Chinese
e-commerce stocks are much more
reasonable than the valuation of Amazon
I absolutely love Amazon I think there's
huge potential with that company I just
personally can't get behind the
valuation of those shares at this point
in time but yeah so that is the reasons
why I'm investing in Facebook JD and
Alibaba so number two like I said that
kind of ties in with number one is the
fact that I'm more comfortable with the
valuation of these Chinese e-commerce
stocks and if you guys didn't see the
video I did talking about JD comm how I
plan on buying about ten thousand
dollars worth of that stock in the
coming months in that video I go over a
comparison of the valuation of Amazon
compared to jvcom and I also look at the
valuation of eBay compared to Alibaba so
I'm not going to go into that valuation
again in this video because I just did
it over there in that JD video but I'll
link that up down in the description
below if you guys want to check that out
but in a nutshell I am more comfortable
with the valuation of these Chinese
companies and I always like to be
investing in stocks when there's a
correction taking place now in the short
term I might look like an idiot I look
like an idiot right now with JD comm
because I've started buying shares and
about the 31 to 32 dollar range and I am
down over 20% so yes you may look like
an idiot in the short term but I would
always rather purchase stocks that are
hitting 52 week lows as opposed to
52-week highs and I know a lot of people
have been commenting on those videos
saying you know am i performing
technical analysis personally I don't
rely much on technical analysis because
I'm a long-term investor and when I
believe I'm getting a good price for
something I don't mind if it goes down
in the
short-term but you are correct in that
sense that if you are looking to
optimize your entry points if you do
learn the basics of technical analysis
and learn about support and resistance
areas and look at simple moving averages
you would most likely be able to get in
at a more optimal entry point but for me
it's just not worth it because you know
I'm looking at the long-term picture I
don't really care if I can you know save
five or ten percent in the short term by
looking at support and resistance areas
but that's just my personal preference a
lot of people would strongly disagree
with me on that okay so number three my
third reason for investing in Alibaba
and also a JD all these are basically
the reasons why I own both of these
companies is that the Chinese e-commerce
market is the biggest e-commerce market
in the world a lot of people don't
realize this they think that you know
ecommerce is huge in the United States
but it's way way bigger in China so in
2017 the size of the Chinese e-commerce
market was six hundred seventy two
billion dollars the second largest
market is the United States at 340
billion so if you do the math on that
that is just about two times the size at
the US market the Chinese e-commerce
market so the market for JD comm and
Alibaba and these other e-commerce
companies over in China is much larger
than the size of the market in the
United States now you could argue the
fact that Chinese is always more
forward-thinking and they tend to be a
little bit more innovative than the
United States and so more people are
doing shopping online in China than they
are in the United States and so I do
believe that obviously the market for
e-commerce in the United States is going
to grow at a substantial rate as well
but the actual shopping trends over in
China have changed more rapidly than
they have in the United States because
more people are doing their purchasing
online primarily through JD comm which
is that Chinese Amazon and then the
third largest market in terms of
e-commerce is the United Kingdom at 99
billion so China is by far the largest
market out there for e-commerce and that
is why you know I have my dollars
backing a Chinese or to Chinese
e-commerce companies number four the
fourth reason for investing in Alibaba
and also JD is the fact that a lot of
people don't realize this but Amazon has
very little market share over
China it's not 50% it's not 25% it's not
10% it's not even 5% it's two amazon has
two percent market share of e-commerce
over in China they have crumbs of market
share over there and there's a lot of
different reasons why this is the case
first of all one of the main reasons is
the fact that there is content
censorship over in China so it's not
like it is here in the United States
where I can you know make videos like
this they'll throw them up on YouTube
and freely speak my thoughts and
opinions over in China you might not be
able to do things like this because the
government censors content why does this
matter for Amazon because one of the
biggest perks to their Amazon Prime
service is a Mazon video and when a lot
of that content is not allowed to be
shown in China all of a sudden the value
of that is substantially dropped you
also have JD over there offering a
service called JD Plus which is a really
really valuable service and a lot of
people are enjoying the offerings of JD
Plus over the offerings of Amazon which
is really geared towards Americans I'm
sure they do have content that is you
know geared for people in China but it's
really a native platform to the United
States so I think people are more used
to using JD Plus and you know the the
numbers speak for themselves the fact
that Amazon has two percent market share
over there goes to show you that people
are not jumping onboard the Amazon train
in China and then the other thing we
have to mention here is that if Alibaba
or JD comm were ever really threatened
by Amazon China would literally squash
them like a bug they would put in place
tariffs they would essentially block
them from coming into that country China
in the United States right now obviously
are involved in a trade war and they're
not going to let an American company
come in there and take over the
e-commerce in that country I just think
that this would never happen in a
million years if all of a sudden Amazon
started having five ten fifteen percent
market share they would slap tariffs on
that company and they would do whatever
they could to support JD comm and
Alibaba to allow these companies to
flourish because they want their own
companies to own the Chinese e-commerce
market so I do not see Amazon as a
threat at all
- JD calm or Alibaba and then the fifth
and final reason I'm gonna mention this
video as to why I'm an Alibaba
shareholder
the fact that Alibaba really does not
compete with Amazon and a lot of people
are gonna be saying wait a second you
know this doesn't make sense to me but
when you really think about it
Alibaba supports Amazon a lot of people
don't even understand what Alibaba is a
lot of people like I said in that last
video incorrectly label Alibaba as the
Chinese Amazon they are not like Amazon
in the sense of the fact that they are
just a marketplace where Chinese
manufacturers are selling their goods
typically in bulk and this basically
integrates very deeply in the supply
chain network that Amazon is involved
with so there are basically five key
components of this network number one we
have these Chinese manufacturers that
are making goods for customers and
they're gonna be selling them to
somebody else is going to resell them
second of all you have Alibaba Alibaba
is simply supplying the marketplace
where Chinese manufacturers can be
connected with people who are looking to
buy the product very similar to eBay
eBay is not making products but they are
supplying the marketplace for the seller
to be connected with the buyer Alibaba
is simply connecting these Chinese
manufacturers with buyers
most of them being or a large number
being in the United States number three
you have the independent Amazon seller
the independent Amazon seller is
typically going on Alibaba they're
buying product in bulk they're bringing
it over to you the United States they're
warehousing it over here and then Amazon
is going to handle the fulfillment of
those goods and then when you go on
Amazon and you order a phone case it's
gonna come from Amazon but you don't
understand all the steps that took place
before that now as much as Amazon would
love to remove Alibaba from this supply
chain network there's literally no
feasible way that they could do this and
as much as they would also like to get
rid of the independent Amazon sellers
there's again no real feasible way they
could do this either Amazon would have
to if they wanted to get rid of the
Amazon sellers they would have to hire
all these sellers they would need to
hire people to take products in from
overseas you know do inventory control
take photos of these things do all the
market research and bring products to
Amazon's platform so as much as they may
not like these Amazon sellers or these
are Burt Rogers if that's even a word
they are very very
crucial to Amazon's business and I don't
believe they're going away anytime soon
because it would be very difficult for
Amazon to replace them but in order for
them to get rid of Alibaba and again
guys I'm not an Amazon seller I'm not an
expert at this this is just from the way
that I can see it so I'd love to hear
your opinion in the comment section
below what they would essentially have
to do is get rid of the Amazon sellers
and then establish relationships
directly with Chinese manufacturers to
bypass both of them so in order to do
that they would have to hire all of
these Amazon sellers or hire people to
basically serve that purpose and in
doing so they're putting a lot of risk
on themselves one of the main reasons
why Amazon loves these private Amazon
sellers is that the risk is on the
seller not on Amazon if you go out there
and you decide to buy products and bring
them to market here on Amazon you're the
one who has done that research on the
product you're the one who has put that
money up front for inventory you're
paying Amazon to warehouse those goods
they're not losing any money you're
paying them to hold on to those Goods
and you're paying them for the order
fulfillment as well in some way so
there's absolutely no risk on Amazon's
part all the risk is on you if all of a
sudden you bring a product to market and
then there's a patent on it and you
can't sell it you know what that's your
bad you're gonna have to deal with that
and you're gonna have to figure out what
to do with those products if Amazon had
purchased those products now they're
gonna have to deal with that problem
themselves and also if a product is not
selling again that is on you that's not
on Amazon so if Amazon wanted to disrupt
the supply chain get rid of Alibaba they
would have to hire all these Amazon
sellers to work for them and they would
be taking on a massive amount of risk by
owning the inventory they do own some of
the inventory Amazon does sell some
products directly owned by Amazon but a
lot of the stuff being sold is just
stuff from Alibaba being sold by private
Amazon sellers so I know that was a very
long explanation there but that is in a
nutshell one of the main reasons why I
like Alibaba as an investment and I also
see Amazon as you know a business model
it's probably going to work for a good
while until Amazon can figure out a good
way to you know change up the supply
chain and I just don't see it here on
paper but anyways guys that's gonna wrap
up this video I hope you enjoyed it if
you are
Alibaba shareholder dropped me a comment
down below and let me know why do you
own Alibaba if you're a bear and you
hate Alibaba stock and you don't like
Chinese e-commerce companies I'd love to
hear your feedback as well again like I
said if you guys are looking to grab a
free stock we bowl has that promotion
where you can get a free stock worth up
to $1,000 the link is the top link in
the video description you don't even
have to fund the account you just have
to open the account and they will give
you a free stock worth up to $1,000 so
it's a pretty cool offer they have going
on but that's gonna wrap up this video
thank you guys so much for watching I
hope you enjoyed it and I will see you
in the next one
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