An impeccable warning was issued on Alibaba before the 18% correction. Would you believe me if I said we planned for this?
Press the ❤️ button if my work has helped you psychologically and strategically prepare for next steps in markets. There will be more. This is just the beginning.
Note: Alibaba made an epic retracement from its recent local highs, and out of incredible commitment and deep goodwill to my public Community, I am releasing my July 1st Half Strategy report excerpt on China where I discussed risk-reduction and caution on China BEFORE the correction. This was all discussed while CNBC and Bloomberg talked up the China rally. I want you all to have an opportunity to see if you vibe with my research style.
In return, practice Karma for me. I ask that you share my email newsletter to anyone and everyone who cares about markets. I am going to help you. But I ask you to return the favor. We have 4800+ friends on the email list. And I want more people to benefit from my work.
My July 2nd Half Strategy Report will be released later this weekend to our Members to capture my opinion for the 2nd half this month. I will have several key opinions to share.
Image of famous martial artists Ip Man and Bruce Lee (I will relate this to Investment Strategy - read below)
Dear YT Friends & Public Investment Community,
In this iconic image above of notable martial artists Ip Man and Bruce Lee, it may not be apparent that they are training on a fighting style that would later be famously commercialized as Wing Chun.
I want to take a moment to walk you through the history of one of the world’s most famous martial artists - Ip Man - and help you understand how his journey can help you in your investment strategy and your personal perspectives. You will like the connection, I promise.
In the early 1900s in Foshan, Guangdong, young Ip Man (thought to be around 9-12 years old at the time) sought to learn kung fu from famous wing-chun master Chan Wah Shun. Chan had a dislike for wealthy students, and at first turned away Ip Man (who came from a wealthy family) from his school. Ip Man pleaded with Chan to take him as a student and soon returned with a material amount of silver as a form of tuition to enroll. Chan Wah Shun reluctantly let him in, and Ip Man would end up becoming his 16th and last student.
Ip Man studied with Master Chan for 3 years before Chan passed away. He later learned most of his skills and techniques from Chan's second most senior student, Ng Chung-sok.
At the age of 16, Ip moved to Hong Kong where he received a western education. Among his peers he developed a strong reputation as a kung fu martial artist and was undefeated among his social circle. His reputation would later have his friend recommend that Ip to have a friendly sparing match with an individual named Leung Bik.
The two martial artists sparred, but it was observed that Leung Bik won the match in a record short amount of time. And in a second rematch that Ip had requested out of his bewilderment at being defeated so quickly, he was once again outmatched and swiftly defeated.
At the time, it was observed that Ip was so depressed from the loss that he actively hid from new people whom he met that he knew kung fu.
A week later, Ip learned that Leung Bik was actually the actually the son of Leung Jan, who had trained Ip’s former master Chun Wah Shun.
Ip Man would train with Leung Bik until Leung’s death in 1911. These formative experiences would later catapult Ip Man into the world’s most recognized martial artist for Wing Chun.
So, you might be asking: What does this story (although interesting) have to do with investment strategy?
It is a reminder to all of us about a famous Chinese Proverb that I grew up with - that 一山还比一山高 (One mountain is higher than another mountain).
In other words, to have gotten to the next level in every stage of Ip Man’s development, he had to seek a new mentor as his stage of life progressed.
At first it was Chan Wah Shun. Then it was Ng Chung-sok. And then from Leung Bik.
And at every stage, Ip Man progressed at non-linear levels because his mentors taught him a new perspective.
Ip Man also used defeat and losses to exponentially grow as a martial artist.
Same should be said for today’s bear market.
I can guarantee you that in the brutal environment that we have experienced in 2022, most investors have done absolutely nothing but stare at their portfolios in shock as the Fed seizes this moment to enact QT due to high inflation. Most investors have not taken this period of time as a way to grow their skills.
Another group - a much smaller group (probably you) - of individuals have taken this environment in 2022 to grow as skilled individuals in the craft of investing. And to take this moment in time for maximum learning.
What I have learned from last year in the Chinese Internet regulation saga GREATLY prepared me for the excruciating bear market of 2022.
Being forced to evaluate and understand China regulation and macro landscape last year allowed me to read the situation with much more experience and confidence this year.
If I am being honest with myself, do I really think that I would have been able to confidently guide on Alibaba earlier this year during Feb-May and THEN guide on Alibaba for risk-reduction heading into early July if I didn’t go through what I did last year in the 2021 Regulation Saga?
It would be impossible. Absolutely impossible.
There’s no way I would have seen it coming. I simply wouldn’t have the perspective.
In 2021, the vicious pain that I went through cemented into my memory what matters when it comes to analyzing China.
I would remember PRECISELY what moved the Chinese internet markets in 2021.
And this would help me assess how events and catalysts would move the market in 2022.
I am sure that at some point in the future, I will be humbled again in the markets in a large, unexpected way. I will say this time and time again - I am a mere mortal.
But one thing is for sure: my dedication and commitment towards being one of the top analysts in my space is unquestionable.
My public audience knows this. My private audience knows this. And if you are reading my email, I want you to know this.
To say this year is a painful year is an understatement. But I cannot overstate how this period of time will reward people who are seizing this opportunity to learn properly as the markets leave behind the people who haven’t adequately done their homework.
I spend quite a bit of time reading philosophy outside of market hours. One of my favorite quotes from Buddha ties Ip Man’s journey and your investment strategy together in this relevant quote here.
Pain makes you stronger. Fear makes you braver. Heartbreak makes you wiser. So thank the past for a better future.
Ip Man continued on his journey to seek advice even after a bitter and put aside his ego.
And my experience gained from last year has helped me provide a tremendous level of guidance this year to my Community. Given that there are many finance professionals among my members (that’s how you know stuff is good), I am also very happy to see my impact being multiplied by helping inform the clients that they serve.
On Alibaba & China: This recent correction was FULLY expected by me based on my Research.
I am sure that there will be critics emerging once again about how Alibaba is back down to 100/shr. or that China is once again down.
And to that I will say, don’t even go there.
Inside our Community and ALSO publicly, I talked about how risk/reward had moved greatly against Alibaba as we approached the 120-130/share region.
Here’s where I highlighted this:
Inside our July 1st Half Bi-weekly report for Members
Inside our July Monthly Strategy deck released on July 1st
AND inside our Discord News Feed where I provide timely updates
From my July Monthly Strategy Deck - issued on July 1st
We sealed the deal on the offense side. We sealed the deal on the defense side.
As a long-term investor myself, I don’t bother with trying to time these local tops or bottoms.
But hey - I know a portion of my audience cares about 10-15% moves, and perhaps you may too. I get it. I really do.
So out of what my Community most likely cares about, I decide to provide guidance on it.
And so I have.
In a way that the skeptics have nothing left to say (see that rhyme there?)
Now here’s the excerpt of my China opinion July 1st Half Strategy Report that I issued to my Members inside the Community. I must keep a separation between my Public Content and content for Members, so this excerpt is only the China commentary section from the full July 1st Half Report.
I believe me sharing with you this is tremendous goodwill already, and I’m sure you would agree.
Most of the actionable ideas have already been executed upon. But I’m sharing it with you because I want you to have more exposure to my Research, and I want to help you think with my frameworks.
I assure you that if you follow my line of thinking, you will evolve yourself to be a force to be reckoned with as an individual investor. I’m not kidding about this.
My mission is to help more retail investors think and act like Smart money.
Institutional investors have enough of an edge. I want to balance the playing field.
You can see in the image below that everything in all my reports are timestamped and clearly marked. This report was published on 7/1. (Click file link PDF below where it says 571KB).
Here’s a highlight snapshot of my opinion from my July 1st Half report published on July 1st
If you vibe with my actionable research style, let me know.
Before we wrap up, I want to take a moment to thank the company Trends (owned by Hubspot) for Sponsoring my channel for the month of July.
Trends is a community of over 16,000 entrepreneurs, startup founders, and business owners exchanging a wealth of actionable knowledge to grow their businesses and stay ahead of the curve. In the past, people have met their co-founders or have found investors on their community platform.
Their team of business analysts send up and coming market trends and vetted business ideas directly to your inbox every week. Check out Trends for only $1 for a week with this link below or click the image.
That’ll do for this update.
Social: https://www.instagram.com/larrycheungcfa/
Twitter: https://twitter.com/LarryCheungCFA
Patreon Investment Community: https://www.patreon.com/larrycheung
Best Investment Platform For HK-Listed Shares for Chinese Internet Companies: Interactive Brokers
❤️ this email if you enjoyed the read. And see you in my next Youtube Video.
Your Investment Strategist,
Larry
Important note: My public letters are not financial advice. You must do your own research. They are designed for educational purposes only.