Alibaba made institutions a fortune. They bought at $68 and many sold on Friday at $92.
For many of them, the Alibaba profit adds a significant “pop” to their performance for 2014.
For the rest of us humans, us individuals, the whole Alibaba IPO sucks. We didn’t get any at $68. And at $92, it’s very pricey.
My hope is that it will fall in coming days (like Facebook and other new IPOs did) and we can scoop some up.
I’ll put a limit buy order today in at $80. Perhaps it will stumble with another AliPay type scandal or some problem with those problem Chinese accounting lack of rules and regulations.
Alibaba’s founder Jack Ma is an impressive fellow. At only 50 (and now one of the richest men in the world), he’s bubbly, enthusiastic and breathtakingly uncynical. His favorite movie is Forest Gump, which he watches when he needs a pickup. He’s seen it 15 or so times. His goal with Alibaba is to help small business. Every morning he asks himself, “How can I help more people get rich?” That does not include only China. His suppliers are all over the globe. A visit to Alibaba.com is instructive. But remember that’s just one of his many sites.
AGNC and NLY maintained their dividends. Their yields are holding at 11.6% and 10.7%. That’s high and their stock prices are low. Talk of higher interest rates always hurts their prices. They can be volatile. I like them when their prices are low. Look at NLY over ten years:
Look what God could do, if only she had Harvard’s money. This is the WiFi speed that Harvard Business School gives to its guests:
This weekend was my 45th Reunion. It was fun meeting classmates. Their big obsession (like mine) was grandchildren, either the ones they had, or the ones they were motivating their children to make.
The School organized lectures by faculty, one of which was “The Low-Risk Anomaly: Implications for Investment, Asset Allocations and Corporate Finance.”
The conclusion:
One of the basic principles of finance is that, in competitive and efficient markets, investors earn higher average returns only by taking great risks. Asset classes follow this pattern: Stocks have returned more than bonds, and bonds have returned more than cash. But within the stock market, the pattern is reversed. Low-risk stocks, whether measured by volatility or market beta, have outperformed high-risk stocks, on average, in 80 years of US stock market history and in 30 years of international data.
This conclusion also applies to other asset classes, like commodities, and the continuum within real estate — from the development starting raw land to a full-leased class one office building. But he didn’t talk about them. But I can. High-risk assets often go bust.
I like the iPhone 6. The 6 Plus is too big. The 6 feels “just right.” I got to play with both over the weekend. I will not buy an iPhone 6 yet for three reasons. To buy it I’d have to pay over $700, as my contract with Verizon doesn’t expire until mid-December. Second, I won’t buy it until Mophie has produced an add-on battery case for it. The iPhone is so beautifully made with gorgeous rounded slippery corners that it’s positively lethal — you will drop it in your first week of owning it, Whether you break it depends on what you drop it on. But, trust me, you will drop it. I’m happy with the Mophie case on my iPhone 5S. It gives it more battery life and protects the phone. This morning Apple reported it sold 10 million iPhone 6 and 6 Plus this weekend. The most it’s ever sold in a weekend.
To me, the best feature of my iPhone 5S is the personal hotspot which lets me run my laptop access the Internet. But it’s often iffy. Best tip: reboot your iPhone as you move around. It needs rebooting to find the local cell tower it should be talking to. Otherwise, the poor little thing gets confused.
Harry Newton who got to see his newest granddaughter. It’s so much fun coaxing expressions out of her. I wonder what her first serious boyfriend will think when presented with this collection?
I get kick out of everybody talking about Alibaba “stock”. As you undoubtedly know, it’s not real Alibaba stock; it’s a “thing-a-ma-jigger” in the Cayman Islands. While this factor may not be a serious risk, my sense is NOBODY except, of course, Wall Street, understands that, and it is a risk should the dictators in China decide to change the rules.
I like and own some AGNC. Hard to beat 11+% dividends.
1. I wouldn’t touch baba at $40. I heard EXACTLY the same words from Masayoshi Son @ Softbank more than a decade ago. They were the words of a corporate raider at work. The REAL business plan: Buy em, drain em, dump em. That’s the only way he is going to keep “earnings” (sic). (Harry, remember DCA?)
2. “Low-risk stocks, whether measured by volatility or market beta, have outperformed high-risk stocks, on average” The best “investing strategy” for most folks is to DRIP into a good energy stock, a good pharma, a good agribusiness, and a good general manufacturer… for decades. And just let it DRIP through high and low. Meanwhile, enjoy yourself doing something else.
3. Harry, Enjoy writing this column for the next year. Once those kids learn to run you won’t have the time or energy for stuff like this for another 12 years.