Alibaba (BABA) is down 38% in 9 months. Something that was predicted on this blog on numerous occasions. For instance…..
Is Alibaba (BABA) Getting Desperate?
Alibaba (BABA): More Money Than Brains?
Alibaba (BABA) Time To Buy Or Go Short?
Another Idiotic Advice From Jim Cramer
You get the idea. Alibaba is a giant piece of overpriced crap. That is not to say that we won’t or can’t get a bounce here. That is to say that Alibaba is just starting its long-term descend. Here is why.
- Alibaba is excessively overpriced. Click on the links above or search BABA on my blog. I have explained it previously.
- China is accelerating its collapse. As we saw with Yuan devaluation and their stock market collapse over the last few days/weeks. Don’t forget, most of Alibaba’s business comes from China.
- When bear markets hit, something we anticipate soon, overpriced and overhyped stocks like Alibaba tend to lose 50-90% of their value.
That is to say, if you have the guts to hold though the volatility, Alibaba is a great short. Even at today’s levels.
