Ali Baba and other popular chinese stocks (part II)

Two months ago, I wrote a post about chinese stocks, saying that they were risky and that I thought that we should add 20 to the PE before investing in any of these. For instance, if the PE is 15, I'd add 20, making it a company with a PE of 35. If it's still interesting at that price, I may invest in it... But just a little percentage of my portfolio. 

Recent events proved I was right, because many chinese stocks dropped like crazy in the recent days. Mostly because US regulators said that chinese stocks should be audited by american firms to be listed on the american markets. And China doesn't want that. So, there's a risk of delisting. 

Yeah, I was right, but not because I'm a rocket scientist. Just because I repeat what I've read numerous times and because I don't trust China at all about transparence and honesty. 

So, after the recent drop and as of december 5th 2021, we can buy Ali Express (BABA) for about 15 times next year's earnings. That's very cheap given the fact that this company had an average annual growth of 30% over the last 5 years. Of course, that's China and I'm not sure that we can trust the numbers of any company based in that country. But, to me, that's one of the safest names in China because it's a huge company and many superinvestors have invested in Ali Express. Also, it's a chinese company that we can see operate all around us. A chinese company operating only in mainland China would be tougher to understand. 

I wrote many times that superinvestors weren't that super. I still believe that. But I recently bought some shares, thinking that it could be interesting to put a little less than 2% of my portfolio in BABA. I would never put much more money than that on a chinese company. But I don't think that BABA will be delisted from the S&P500. 

That would have way too much impact on the american economy. I think China and USA will find a common ground. Both economies can't live without each other even if they hate each other.