MASSIVE ALIBABA , DIDI, JD.COM STOCK PRICE PREDICTION! CATHIE WOODS SOLD HER CHINESE. SHOULD YOU?

MASSIVE ALIBABA , DIDI, JD.COM STOCK PRICE PREDICTION! CATHIE WOODS SOLD HER CHINESE. SHOULD YOU?

kathy would sold her chinese socks should you chinese stocks have suddenly plunged is it a buying opportunity or a falling knife jeremy bowman hobo july 30th 2021 at 609 am author bio key points a crackdown on education has spread to chinese tech stocks investors fear the unpredictability of the chinese government the fundamental businesses of stocks like alibaba and jd.com remain strong investing in china has always come with a special set of risks but for most of modern history investors have been able to ignore those as chinese growth stocks have delivered suddenly those risks which include investing in a country where american standards of rule of law and investor protections are non-existent or back in focus the chinese communist party wiped out nearly all the value in the for-profit education sector in that country when it said that tutoring companies like new oriental education group and tall education group would be barred from making profits and that they would have to register as non-profit enterprises as a result a sector worth more than 100 billion dollars earlier this year imploded losing nearly all of its value and chinese stocks as a whole plunged the ishares msci china etf lost 12.6 in just three sessions as investors feared further crackdowns that couldn’t raise shareholder value overnight tensions had already been increasing after beijing slapped a 2.8 billion dollar fine on alibaba nyse baba earlier this year over anti-monopoly concerns and blocked ride-sharing giant dd global from listing its app on major app stores shortly after its ipo additionally the us has threatened to de-list a number of high-profile chinese stocks including alibaba if they don’t open their books to u.s regulators adding to the sell-off are reports that a number of large investors are bailing out of china among them is kathy wood the head of ark invest which runs a number of popular etfs including ark innovation etf nissancat ark that were big winners during the pandemic because of that success investors now watch woods moves closely and ark reports its trades each day some investors may be following her lead on china chinese and american money with small globe image source getty images kathy woods big moves what had been a big believer in chinese tech stocks holding the likes of alibaba jd.com pinned to a duo and 10 cent but ark invest has been rapidly selling those stocks and closing out those positions entirely on friday it sold off all its 10 cent stock and ark dumped nearly 1 million shares each app into a duo and jd.com on tuesday or about 150 million dollars of the two combined woods thinking on the subject wasn’t complicated in a webinar with investors earlier in july she said that there was a valuation reset in china and that valuations could stay down for a while she said from a valuation point of view these stocks have come down and again from a valuation point of view probably will remain down chinese stocks have long traded at a discount to their american counterparts but the meddling from the chinese government is leading valuations to shrink across the board as investors fear further harm to their holdings especially as there is no real check on the chinese government’s ability to do what it wants some investors even believe that the variable interest entity vie structure of many chinese stocks means that the government could render them worthless though that seems unlikely additionally the u.s has threatened to de-list some chinese stocks if they don’t make their financial audits available to u.s regulators another source of geopolitical tensions should you sell your chinese stocks it’s natural to think about selling your chinese stocks at a time like this and whether you should sell your chinese stocks depends on a few simple questions first ask yourself what your risk tolerance and time horizon is if you’re a risk-averse investor or have a shorter time horizon this may be a bad time to own chinese stocks the situation could certainly get worse before it gets better and it’s possible that other stocks could see nearly all of their value wiped out the way that chinese tutoring stocks just did however it’s worth remembering that many of the stocks that wood and other investors are selling are top-notch businesses the stocks are falling not because the business fundamentals have changed but because investor sentiment has and that can change quickly alibaba for example is the world’s biggest e-commerce platform with more than one trillion dollars in annual gross merchandise volume and more than 800 million annual active customers investors also responded favorably when alibaba received a 2.8 billion dollar fine from the government thinking that the regulatory risk was now finished in other words if these stocks don’t face any specific threat the way chinese education stocks have and they continue to put up the kind of growth they historically have investors could be rewarded over the long term for buying now alibaba for example is now trading at a price to earnings ratio of just 16 based on 2022 expected eps and analysts expect revenue growth above 20 alibaba and its big tech peers will have a chance to show off their results and make their case to investors a strong performance could help make investors forget about the crackdown on the education sector while chinese stocks will remain risky for the foreseeable future and the regulatory risk shouldn’t be ignored investors are clearly being compensated for that risk at current prices if you can stomach the volatility and have a long time horizon picking up a small position now could have a big payoff down the road please leave a comment below of what stock you want me to research on thank you for watching please like and subscribe let’s invest and make some money [Music] you
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MASSIVE ALIBABA , DIDI, JD.COM STOCK PRICE PREDICTION! CATHIE WOODS SOLD HER CHINESE. SHOULD YOU?

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