For a guy who really doesn’t like puns – I sure do make a lot of them…
I guess that makes me a hypocrite – but the fact remains – a good pun should produce a chuckle, and if it doesn’t, you did something wrong.
With Alibaba (BABA) – I used the “open sesame” pun in order to lay the groundwork for what we’re going to talk about today…
And that’s namely how this stock could be your window of opportunity into the Asian markets – which, if played right – can be thoroughly lucrative.
Alibaba is one of those stocks that makes a guy like me giddy…
We’ve got a relatively inexpensive stock with a solid company behind it – that could make us a LOT of profit.
The biggest reason why is the fact that it has been called the Amazon of the East – but it’s so much more than that.
Let’s delve into it, shall we?
When it comes to Alibaba, it’s hard not to love a LOT of what this company is all about…
A MASSIVE Chinese, online retailer, web portal, social media platform, mobile commerce, and so much more…
In fact, that’s why Alibaba has been compared to Amazon – it just that everything Amazon does – Alibaba tends to do a little bit better.
The only drawback is that it operates solely out of Asia – so for many American or Western investors – there has been a little apprehension about dropping some cash to buy shares.
For the past decade – Alibaba has been killing it, averaging annual revenue growth of 33.4%.
That means that it’s doing something right – or at least the growing Chinese and Asian middle class is stronger than we’ve been led to believe.
Not only has it had INSANE revenue growth…
But Alibaba’s active user base has more than TRIPLED from 231 million users in 2013 to more than 780 million in 2021.
If you think that’s something, its mobile active users almost QUADRUPLED jumping from 265 million in 2014 to a whopping 902 million now – that’s a HUGE customer base…
And it’s only getting bigger.
To put Alibaba’s growth into perspective – over the past decade – Amazon averaged annual revenue growth of just 21.4%…
Even more, the “world’s largest e-commerce giant” has about 310 million active customer accounts worldwide – meaning Alibaba DWARFS Amazon in both revenue and users.
The difference?
Amazon is global – Alibaba is ONLY in Asia.
Which brings us to our biggest conundrum as a Western investor…
If Alibaba is so good, then why aren’t we all investing in this amazing company?
The answer to that question comes down to one simple word…
China.
Well, to be fair, it’s technically two words…
The Chinese government.
Back in April of 2020, the Chinese government did what any authoritarian regime does – it pushed itself into Alibaba’s business – and used its inside access to find a few things out about the company’s business dealings.
The country’s regulatory bodies then halted Alibaba’s Ant Group IPO and fined the company $2.8 billion for anticompetitive practices – and then made it change all kinds of things about the way it operates.
Now, we both know these changes are not just something it wanted Alibaba to do on a whim…
But since China gives no warning or indication that it’s even thinking about punishment or regulation – it’s hard for Western investors to trust in the stock.
Alibaba DOES have some amazing prospects – but those prospects don’t really outweigh the uncertainty – which may be why the stock is down 50% from a year ago.
Do I think BABA will reach those heights again? Yes, but it’ll take a lot longer to get back there than you’d think.
If you have the patience and stomach to ride it out, you’re more than likely going to make some money with BABA…
There’s the potential for a nearly 100% gain on BABA stock if it heads back to all-time highs – but that’s if (and only if) the Chinese government gets out of the way.
Whether or not you pull the trigger – that’s on you.
This is why I keep urging you to join GorillaTrades – we take the uncertainty out of the equation for you – as our recommendations come ONLY as a result of hard data and real numbers.
However, some people like a little danger with their investing – and if that’s you – then GT may not be the best fit for you…
But if you do like making money with very little effort – you may want to give us a try.
Either way – give Alibaba a looksee – maybe it’s the right fit for you!
“Good regulation should be conducive to business and to customer protection.” – Jamie Dimon
