Once in a while, you get to dabble in a business in which you can’t possibly have a complete overview of all moving parts but must look at the business in its entirety to keep your analysis grounded. Berkshire Hathaway is such a business. Alphabet is such a business. Alibaba is such a business.
With Alibaba, we deal with a sprawling octopus with its arms everywhere in Chinese digital society. There’s little chance for you to live in China without being touched by Alibaba, even if you live in the country’s most rural areas.
That said, I’ll now attempt to dive deep into Jack Ma’s legacy. We’ll look at the company’s history; We’ll look at each arm of the octopus and get a feel for the vision of the company’s innovation and investment initiatives; We’ll assess how resiliently the synergies between these arms contribute to Alibaba’s moat. But most importantly, facing current crackdown risks toward the Chinese tech and education sector, we’ll invert the problem and look at Alibaba could fail with the strong possibility that things could get worse before they get better.
Lastly, as always, I’ll value the company and give a small remark on position sizing.
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