Why do people bother doing investment research when the only investment you need is Alibaba?

Serious question.

I was reading some stock analysis from some research analyst somewhere today when I came to the painful realization that there is no reason to read an investment research in the first place.

Why? Because there is only one company worth investing into and it’s this one:

Notice how Alibaba, unlike Gopro, didn’t try to fit some stupid slogan in here. “Alibaba: Future’s ahead” or something stupid like that.

Alright, I gave it my best shot. Nevermind that.

Anyway, Alibaba is the only company in the world worth investing in right now. Sure, Apple, Google, General Electric and so on are still great investment, but with Alibaba now on the market, why would you bother? Procter and Gamble et al. are old, big and fully valued, it’s too late to buy their stocks now. Have you ever noticed that winners, such as Netlflix, Amazon, Wal-Mart and McDonald’s, all hit a roadblock at a point or another of their company’s lifetime and that their stocks suddenly stop rising as it used to be? Well, Alibaba is still years away from that roadblock.

No company can keep growing and offer you huge stock returns indefinitely. Apple is never going to give you a 50% return a year and neither will Google. At a market value of 616 billions, do you really think Apple will gain 308 billions in value in one year? No, it won’t: it’s too big already. Alibaba, on the other hand, is just starting out on the market. Not even two months old. At a market value of 230 billions, can Alibaba gain $115 billion in market value in a year? Easily. Hell, it could gain that in a month. In fact, Ali offers you a guaranteed minimum 20% return per year on your investment. If Alibaba is not at $120 a year from now, something will be seriously wrong.

In fact, look at this little baby:

My position in NYSE:BABA, Alibaba.com. 500 shares.

This is my investment in Alibaba. Isn’t this the most beautiful thing in the world? I don’t even think my first newborn child will be as pretty as this picture. In something like a month and a half, I already made $2324 from a $46,576 investment, or a 5% return. And I am nowhere close to even starting to think about selling Alibaba. My selling point? I would consider $300 a share.

I bought it at day one, on the opening, at $92.70. I bought even more later just because it’s that awesome. And I wish I could put my entire stock portfolio into Alibaba. I wish I could remortgage my house to buy more shares. I have 500 shares and I wish I had 5,000. Sadly, I have to mitigate my risk somehow and limit myself (diversification and blah blah blah). In five years, I’m sure I will read this and cry over not maxing my credit cards to invest into what I consider to be one of the most solid companies in the entire universe and one of the best investments of our era.

When I look back at the mistakes I did as a young investor, the thing I regret the most was buying into small cap companies.­ I was young and naive in the university and the teacher told me small caps averaged a 20% return per year. Even if that was true (it is not), what’s the point? You can get the same return with a tenth of the risk by buying large companies. Alibaba is the hot IPO of the moment, but back in the days, I still had cool companies like Netflix, Facebook and a ton of others that I did not invest into. Even Twitter, perhaps the stupidest investment of our times, managed to grant a 33% return over its opening trade price, and that was from a company that was basically worthless.

There is one thing you need to know about Alibaba: it’s Chinese

When Alibaba did its IPO, retarded analysts did their best to convince investors Alibaba was a terrible investment. They brought up retarded arguments to convince you not to invest in it, so they could grab the shares for cheap (and grab shares for cheap they did). Here are some of these arguments, bolded, along with my replies, unbolded.

• It has a special structure and shareholders will have no voting power! Shareholders never have voting powers. Your annual vote at the meeting is an illusion and 100% worthless. I hope nobody buys this stupid bullshit that shareholders decide how a company is ran because it’s not true. Large shareholders do, but if you were a large shareholder of a major company, you wouldn’t be here and you would have already invested into Alibaba.
• It’s based on some island and it could disappear at any time! Yes, I’m fairly certain a company worth 230 billions is going to just scam the entire world (including large hedge funds and massive pension funds) and disappear, especially given that most key employees’ compensation is based exactly on the stock price. Oh and all those rich Chinese businssmen who hold shares? I guess they lose everything as well. Moron.
• It’s Chinese! You can’t trust the Chinese! Look guys, there are Arabs living in the US! They’re Arabs so they must be planning a jihad !!!!!!111!!11!!!
• Alibaba is valued at 230 billions, the market value of Wal-Mart, and Wal-Mart sells twice as much as Alibaba! So what? Wal-Mart sales have barely grown 16% in four years.

http://www.marketwatch.com/investing/stock/wmt/financials

Alibaba sales grows at 50% per year. Oh yeah, and online e-commerce in China is set to triple within five years, and that’s not even counting if Alibaba makes a real launch in other countries.

• Alibaba is growing too fast! The Chinese must be faking the numbers! Even if that was true (if I was in charge of the SEC, I would prosecute the people making these stupidclaims), the United States do the same thing with its jobs report. Everyone knows it and nobody cares. Also, the numbers from its preliminary prospectus were audited and are perfectly believable when you consider the moat and popularity Alibaba has in China.
• But China doesn’t have the same laws and regulations to protect investors! Tough shit, Sherlock: investors in the US enjoy absolutely no protection whatsoever when it comes to holding shares anyway. The SEC is a giant useless joke that loves to catch a minor criminal from time to time, but actually does absolutely nothing. Tell people who invested in Enron, Bears Stern and ZZZZ Best that the SEC got their back. Tell that to people who held shares from that wortheless GTAT Sapphire company. If a corporation wants to fuck you, it can, in the US like in China and laws are 100% meaningless and only present for the show.
• Alibaba has ripped off its partners in the past by spinning off Alipay without telling them! Yeah, three years ago, back when it was still privately held and not public, and due to new Chinese regulations. And it settled the dispute with its private partners. And its private partners didn’t complain all that much. And the value of the company kept exploding. And if you think corporations don’t rip off their shareholders with billions of benefits on the behalf of the company, you are a moron
• Alibaba sells at a P/E ratio of 40! And Amazon at a ratio of 400. And Netflix at a ratio of 120. Considering that Alibaba will double its profits every year, at the current stock price, next year’s P/E will be 20, then 10. Adjusted for growth, Alibaba is massively underpriced at the moment. Oh, and it hasn’t even been really trying to make money so far, just focusing on growth. Alibaba has a long, long, long upwards future to go.

 Stop doing stock research: you’re wasting your time.

You don’t need to spend five days perusing every earnings report a company has ever made to decide whether it’s growing fast enough to justify its stock price or not. You don’t need to listen to hours of boring stock analyst opinions to understand the hidden dynamics of a particular market. You don’t need to calculate the six hundred different ratios you learn in corporate finance that tell you pretty much nothing to decide if the debt is structured correctly. You already have a terrific investment right in front of you and if you want to invest, it’s the only company worth putting money into at the moment. Why? Outstanding risk/reward ratio. Here’s everything you need to know about Alibaba in one picture:

Keep in mind  this picture is for retail sales only. Alibaba also does business to business sales as well as a million other things. It also sells all over the world and not just in China. For your information, Alibaba’s estimated revenue for 2013 was $248 billions USD. Oh yeah, and it’s China most profitable online e-commerce company as well. Do you start to see where I’m getting now? Even growing at market rate and assuming Wal-Mart keeps growing at its average rate of 4%, Alibaba will surpass them in sales in 2017 at the latest. And the growth will be far from over.

And just wait until it starts selling Brazil, the Middle East, Europe and so on. I tell you: Alibaba is the only company worth investing in. Stop wasting your time reading some stock pick and some report about some boring business somewhere that has a 80% chance to crash within a year and just put your money into a guaranteed 20% a year return (minimum).

So yeah, I have a ton of cash in Alibaba. Wish me luck.

See you at $150 a share.

Liked it? Take a second to support F.S. Comeau on Patreon!