Alibaba BABA InvestWithAlex

Since it’s IPO, I have argued that Alibaba (BABA) is one giant overpriced and over hyped stock. By comparison and considering it’s valuation, Amazon (AMZN) is being given away. For instance, Alibaba Stupidity and Alibaba (BABA): More Money Than Brains?

Here is what peaked my interest.

Jack Ma, sparking America’s next gold rush?

“We want to connect small business in the West with the largest, fastest-growing market in the East,” he wrote. The strategy, according to Ma, is “simple and clear.” “Chinese consumers will get to buy the American products they want,” and this, in turn, he said, “will help create American jobs and increase U.S. exports.”

While that sounds good on paper, I believe it is to be an impossible task. At least at this time. About 3 years ago I was part of a group that was trying to identify what European or American consumer products we could sell in China (not commodity or industry related). We couldn’t find any. Whatever products we did identify, domestic Chinese suppliers were offering the same at 30-70% our costs.

So, a gold rush? I have my doubts. Perhaps another conclusion. It appears that Alibaba is getting desperate for growth. Considering its overall and massive overvaluation, it is not a good sign.