The heavy hand of China regulators has been making huge dents on many China technology stocks. Alibaba and Tencent have been beaten down to a pulp. The sea of red in China stocks reflected the pessimistic sentiment of most investors who are exiting rapidly. Is this a disaster in the making or once in a lifetime opportunity for retail investors?
The "Once in a life-time Opportunity"?
As an income strategy focused investor, my main investment philosophy is on accumulating securities that pays decent yield dividends or interest income. My original resource allocation into a secondary approach focused on growth stocks is only expected to have not more than S$5K into any individual counter and also a small part of my overall combined portfolio.
As an income strategy focused investor, my main investment philosophy is on accumulating securities that pays decent yield dividends or interest income. My original resource allocation into a secondary approach focused on growth stocks is only expected to have not more than S$5K into any individual counter and also a small part of my overall combined portfolio.
For Alibaba (on HKEX), initially at beginning of the year, I only target to have 100 shares even if a suitable entry point present itself. However, since then, I have invested almost S$20K (600 shares) into Alibaba despite the ever decreasing price. Yes, I am in the "Pro" camp of Alibaba based on its recent financial results and also growth story such as rising demand for its cloud computing as well as its investment into data centers. I also plan to continue adding on to Alibaba based on its current price weakness. In addition, I am of the belief that China government will not destroy the best their companies.
The Predicament
Nevertheless, the past year has taught me invaluable lessons in stock market investment that some risk factors like government intervention, major lessee negating on contractual rental agreement and fraudulent acts by management of a company are uncontrollable factors that may lead to permanent loss of value or even total bankruptcy.
Hence I plan to restrict my investment into China Tech to no more than 5% of my overall equity portfolio. Yes, some of the people around me is calling me idiotic in that but I think it is important to be able to sleep soundly at night based on one's own comfort level- no right or wrong in that. I still prefer reaping dividends at regular intervals annually rather than not sure waiting till 1 year or 3 years later to realise the full benefits of growth stock strategy.
Parting thoughts
Who dare wins! May good luck and fortune follow all who took the plunge into China tech stocks recently. 😃💪💪
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