Alibaba, PayPal Have Lost 80% Since 2021: Falling Knives or Undervalued Gems?
Navigating the stock market demands patience, and while the emphasis is often on the long-term and buy-and-hold approach, it's essential to note that being patient doesn't equate to being a passive investor. Quite the contrary.
Today, let's delve into two stocks that have faced significant challenges recently: Alibaba (NYSE:BABA) and PayPal (NASDAQ:PYPL).
Both associated with the online realm, Alibaba in e-commerce and PayPal in digital payments, these stocks have practically experienced a downward spiral since the beginning of 2021.
Both Alibaba and PayPal have experienced substantial losses, approximately 80% from their all-time highs in 2021. Currently, they find themselves downgraded by analysts, shunned by investors, and relatively overlooked by major fund managers.
Over the past three years, a considerable but not negligible timeframe, many investors made the mistake of buying these stocks at their peak valuations.
Particularly for PayPal, the surge during the COVID period inflated its valuations based on a narrative that eventually proved challenging.
Both companies share some common characteristics:
Given these similarities, the question arises:
While both are considered excellent companies, personal considerations lead to a preference for PayPal.
This preference stems from uncertainties surrounding Alibaba's political landscape, which introduces unpredictable elements even if the company were to recover.
From a peace-of-mind perspective, PayPal appears more reassuring.
Moreover, the new CEO, Alex Chriss, demonstrates clear vision and excellent communication skills, as evidenced by his recent interview on January 25, where he hinted at making a significant announcement.
Although I didn't consider buying PayPal in
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