Alibaba Group Holding (BABA)

In August they reported earnings that were extraordinary. Underneath everything there were some great metrics. This is one that you have to own.

This and Tencent (TCEHY-5) are the behemoths of China technology. She likes this company. It is a long-term core play.

It is similar to Amazon. It is hard to value. It had a tremendous run earlier. She cannot speculate where it will be in a year. It is okay for an aggressive part of a portfolio. You need to understand what you own in this stock.

(A Top Pick Aug 31/15. Up 53.57%.) This has the potential to go so much further than it has gone, because it is an international story, rather than a China or Asian story. There is lots of room for growth.

(Market Call Minute.) Valuation is too rich.

He likes the model, but there has been a considerable amount of misrepresentation and fraud. Can we believe the financial statements? He doesn’t believe that we have enough evidence to make an investment.

(Market Call Minute.) He likes the long-term business model, but you have to be comfortable with China and the risk that is entailed with investing in China.

Has spent a lot of time over the last couple of years focusing on e-commerce. When this company went public, there was a lot of love/hate with a lot of people questioning if they could deliver on the growth people expected. It has done a better than expected job in doing that, not just the one e-Commerce business but a marketplace business, with much higher margin than people expected. His challenge is that property rights in China are not as strong as they are in North America, so you actually have a very creative structure that owns the entity, Alibaba, you are not actually a direct investor in the business. Going forward it is going to be a lot more challenging given the size of the business. As margins have compressed, he doesn’t feel he is being compensated through the valuation today.

Short Sell? He applauds your aggressiveness. He would like to Short it as he thinks it is a house of cards. In China there is an ability to keep companies sustaining at a higher level longer than what they otherwise would. From what he has seen on their accounting, he doesn’t know that there are real earnings being generated on a real cash flow. He wouldn’t own this.

(A Top Pick April 30/15. Down 3.31%.) After he had recommended it, he got stopped out and ended up buying some Facebook (FB-Q). However, he liked it so much that he got back in again at about the current price. Really thinks this is the start of the future.

Not a bad investment. They will surpass Wal-Mart (WMT-N) in Gross Mercantile Value within the next few months, and will probably be double by 2020. You have to keep in mind that of China’s total retail sales, only 10% is done online right now. US has 15% and growing, meaning that there is still a fair amount of headroom for growth. China has adopted online to offline faster than anywhere else globally, and this company will be exposed to that.

A significant changer of the Chinese economy. The move to the Internet in China is somewhat faster than what we are seeing in North America. This is the dominant player. One could argue that this is a very good investment.

This actually came down to his model price in September of about $57 and jumped off from there. He would be a buyer if it got back to his model price.

A play on the Chinese consumer. It has pulled back a great deal. The Chinese market was off 30% in the 3^rd quarter alone, which is pretty remarkable. The penetration of Internet sales in China will continue. The real question is, has confidence been shaken sufficiently by the crash in the stock market to persuade people to reign in their horns. One good thing about this company is that it is not a conspicuous consumption that the Communist Party has been targeting. As a long term play on the Chinese consumer, it is probably not a bad Buy now, but it might not actually go anywhere for the foreseeable future because people will be worried about China. Until we see some strength in Chinese domestic consumption, that may be enough to keep a lid on things.

It is expected to fall 50% from its current price level. He would lighten up. There are 1.2 million merchants that shipped empty parcels. They do this to get a high ranking. They are aware of this issue. They have the most fake products of any Chinese E-commerce company.