Don’t Touch BABA, Buy This Instead

It’s a good time to avoid Alibaba stock after an ugly earnings report. If you’re thinking about buying a stock that is outside the U.S., Garrett {NAME} explains a backdoor trade on Volkswagen ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   Don’t Touch BABA, Buy This Instead Dear Reader, Another day, another reason to avoid Chinese stocks. Ray Dalio might be willing to take a stab at companies like Alibaba with other people’s money, but I’m still steering clear. The latest sign that problems remain for this economy came with Alibaba’s earnings report this morning. It was ugly. Very, very ugly. Shares of Alibaba Group (BABA) are now off more than 37% over the last year, and today’s 11% slump was more of the same. China’s largest e-commerce company has taken a beating after a massive earnings miss and a large cut to its sales forecast. Now, I speculated on this stock, and I lost money. I’ll be upfront about it. My hunch was that this was going to be a stock that might rebound after people like Ray Dalio and Charlie Munger said that there might be value here. I thought to myself: What if they know something that I don’t? Well, I paid a lot of money to be correct about the company, and it’s a reminder that I’m bearish on China for the foreseeable future. BABA took a beating after the Chinese government cracked down on their tech sector in October. Now, the numbers look weak, even as we approach the nation’s holiday season.  Sponsored Message Free Report: Inflation Navigation Guide (Instructions Below) If you’re not ready for it, inflation can be a disastrous challenge for traders to overcome. Fortunately, 20-year trading vet Markay Latimer is going LIVE on Thursday night at 7:00 PM with her Inflation Crisis Summit, to share her strategies for trading during these choppy markets. Better yet, anyone who attends will walk away with a copy of her Inflation Navigation Guide for FREE. [Just sign up here to get started and see the latest updates](  The company had projected year-over-year growth of 30%. But today’s report signaled that it would only grow by 20%. I know - that is still solid growth, but this market expects and demands exponential growth for the company. Earnings fell by 32% from 2020. I am steering clear. Value Where? I tend to avoid investing abroad because I know the rules of the U.S. markets and I’m not overconfident in my knowledge of what’s happening abroad. But there is one stock that I am willing to buy and hold into perpetuity. As you know, Tesla (TSLA) remains the heavyweight in the global electric vehicle industry. But people forget that in two years, Tesla will be overtaken by a competitor. That competitor is Volkswagen. Volkswagen struggled before the EV craze due to the emissions scandal that ruined its reputation for a few years. But Volkswagen is going to be the world’s largest producer of EV. While markets are going wacky for Rivien and Sono Group, I look at Volkswagen and believe it to be an incredible value. And the way that I want to take advantage of VW is to own its parent. Porsche (POAHY) owns 53% of VW and a variety of other brands. The stock currently trades at 0.64 price-to-tangible book value. That’s right… you could liquidate POAHY tomorrow and the stock would be worth much more - $14.64 I think that you can buy POAHY and not look at it for a few years. I’ll be back tomorrow to talk about trends for 2022. Enjoy your day, Garrett {NAME} Chief Analyst, American Markets © 2021 Godesburg Financial Publishing, Inc. 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