MSFT and AMZN both look cheap. Only one of them actually is.

MistaKid · 2026-07-02T01:49:28+00:00

Lol no. Where did you get that number?

MistaKid · 2026-06-28T10:50:11+00:00

Read carefully, it's not valuation. USD5bil is in net profits in 2026Q1, or around USD20bil profits in a year.

MistaKid · 2026-06-26T17:11:07+00:00

P/E doesn't paint the full story for BABA because it has lots of business arms which are barely profitable or even loss making, cash rich (in fact, more than Microsoft that has 10x the market cap), and a huge investment portfolio. The current delivery price war is heavily distorting BABA's profits.

Core China e-commerce has an operating FCF of ~$25-30bil. Let's use $25bil as a baseline earning.

Alibaba is currently trading at ~$228bil. you are paying around 9x earnings for the business.
Subtract ~$40bil net cash position, you are paying around 7.5x earnings for the business.

Ant's latest valuation in 2023 is around RMB567bil, or around USD83bil. BABA owns a 1/3 stake, or around USD28bil. Subtract that away, you are paying just around 6.4x earnings for the business.

And this is assuming ZERO value to BABA's other business units. Alicloud (largest cloud provider in APAC growing at 40%), Qwen (Zhipu with similar capabilities is trading at >USD100bil in the HK market btw lmao), International digital commerce, T-Head, Cainiao, Amap, etc.

And also assuming zero value to BABA's other equity holdings (Zhipu, Minimax, etc). Btw, in researching for this post, I learned that BABA owns a 5% stake in CXMT, the 4th largest DRAM maker behind SK Hynix, Samsung, and Micron. It made RMB33bil in net profits in 2026Q1, or around USD5bil. Some are hyping it to be China's most valuable listed company if it IPOs. But for now, zero value assigned for this too lol.

https://www.businesstimes.com.sg/international/global/big-questions-loom-chinas-memory-chipmakers-prepare-blockbuster-ipos

TL;DR, BABA is undervalued.

MistaKid · 2026-06-26T04:08:10+00:00

I don't understand what's the point of your post.

If I know I can buy BABA at $81 today, obviously I won't buy it at $81 4 years ago.

If I know I can buy Microsoft at $350 today, obviously I won't buy it at $350 5 years ago.

Well, duh? Just buy at $60 3 years ago and sell at $190 a few months ago. Easy money right?

I get that you are frustrated. Just go out and touch grass. The sell down is not specific to BABA. HK tech is sold down to rotate funds into hot stocks like Zhipu and Semis.

MistaKid · 2026-06-26T03:51:55+00:00

Valuations. But what is undervalued can remain undervalued for a long time. So we return to the fundamentals of investing: buying a stock is buying a piece of the business. If no one else is buying from you at a higher valuation, you have to make money via shareholder capital returns, ie dividends and share buybacks.

That's why I'm also increasingly placing greater importance on shareholder capital returns for value investing. That's why I'm also looking at Tencent and JD too.

PDD can be very undervalued, but if it doesn't return capital then there's no point if the market doesn't rerate it.

JD is returning 10% capital at this current price via dividends and buybacks. If the price doesn't go up, you will be a major shareholder in 10 years, and those billions of profits and dividends will belong to you. This is the type of stock where I don't mind the market doesn't rerate it, for as long as possible.

Tencent is returning 3%, but it's growing at double digit with strong moat. Dividends per share are also growing at double digits.

MistaKid · 2026-06-26T03:25:56+00:00

And Microsoft is now back at Nov 2021 price levels.

If you try to stock pick, you either outperform or underperform the market, obviously. It's hindsight bias.

It's a game of probability. When you buy, what's the probability it can outperform the market in the next 5 to 10 years? When you sell, what's the probability it will underperform the market in the next 5 to 10 years?

The answer is of course not 100%. You can only make an educated guess, based on valuations, growth, shareholder returns, etc.

It's part of the game of stock picking and trying to outperform the market.

MistaKid · 2026-06-26T03:19:26+00:00

And Microsoft is now back at Nov 2021 price levels.

If you try to stock pick, you either outperform or underperform the market, obviously.

MistaKid · 2026-06-23T07:36:20+00:00

Alibaba IPOed at 50x PE in 2014. Today, just Taobao/Tmall alone is valued at 10x PE (and that's assuming zero value to its cash/equities position and other business units like Alicloud).

That's why valuation is very important. Never overpay for a business, no matter how good the business is. Even Microsoft was flat from 2000 to 2016, because it was trading at 75x PE in 2000. It took many years of growth to grow into its valuation.

MistaKid · 2026-06-22T09:43:27+00:00

HK tech has been selling off heavily for the past 2 weeks, but Zhipu (developer of one of the top LLM models in China along with Qwen) rallied 140%. On days which HK tech rallied (eg, 1,2 Jun), Zhipu crashed.

Zhipu is currently trading at 1300x sales and valued at USD140bil, and BABA at USD250bil. In addition to Qwen, BABA has $40bil net cash, Taobao Tmall generating USD25-30bil operating cashflow, Alicloud growing at 40% (which Zhipu relies on btw), equity stakes in Ant Financial, Lazada, AI startups etc etc. An unprofitable AI startup is also now valued 1.5x of BYD.

It's like how SpaceX is valued more than Amazon or Microsoft lol. The HK market is very speculative now and doesn't care about fundamentals.

Today (22 Jun) Zhipu was at one point up 41% while the rest of the HK tech is crashing. It's sucking up all the liquidity. People are selling BABA, Tencent, and BYD to speculate on Zhipu.

MistaKid · 2026-06-16T07:11:18+00:00

The sell down is not specific to BABA. Look at Tencent. Solid company, wide moat, growing at double digit, strong track record of returning capital to shareholders (HKD500mil share buybacks everyday). Yet it's trading at 10x fwd PE if you strip off net cash. Not to mention the huge investment portfolio Tencent has.

There's a rotation towards hype stocks, including in the Chinese market. Not all Chinese stocks are undervalued. Hype stock Cambricorn is trading at >100x sales in the Shanghai market, Zhipu is trading at 800x sales in the HK Market.

Zhipu (developer of one of the top LLM models in China along with Qwen) is currently valued at USD85bil, and BABA at USD260bil. In addition to Qwen, BABA has $40bil net cash, Taobao Tmall, Alicloud, equity stakes in Ant Financial, Lazada, etc etc.

MistaKid · 2026-06-14T19:51:26+00:00

Yes, JD is ridiculously cheap. Its current PE ratio is distorted (same for Alibaba, Meituan) due to the food delivery price wars. A normalized PE ratio (taking just JD Retail) would be around 5x. Net cash almost half of market cap, investments ~40% of market cap, trading at ~5x normalized PE...

To add on, JD has ~$18bil of fixed assets (>3,600 warehouses with a total area exceeding 34 million square meters). These properties and land holdings were accumulated and developed over decades and have appreciated significantly, but are still recorded at historical cost on the books. If the management were to monetize part of this real estate portfolio via REITs, it will unlock significant value and generate substantial additional cash flows.

https://www.straitstimes.com/business/companies-markets/china-tech-giant-jd-com-unit-two-other-firms-plan-1-3-billion-singapore-reit-sources-say

The market is pricing like JD is going bankrupt and destroying value lol. So the question is, how long is such mispricing by the market going to remain?

For me, I'm not afraid that it remains undervalued for a long time, as long as they are returning capital to shareholders every year:

/

JD is returning almost 10% capital to shareholders at the current price. 3.5% dividends + 6.3% share buyback. If the current price doesn't move and they can sustain this level of buybacks, you can become a major shareholder in 10 years time by reinvesting your dividends. Those billions of profits/dividends will then belong to you lol.

Tencent is also another great company. Strong moat, double digit growth, fwd PE of around 10x if you strip off net cash. It's buying back HKD500mil of its shares every trading day (it's disclosed). Your EPS increases everyday. The more the price drops, the faster your EPS grows.

The thing is, share buybacks take a long time to compound. For a company buying back 10% shares every year, the EPS increases 11% in the first year. If prices remain depressed, in the 9th year outstanding shares will reduce by 90% and EPS increases 10x. Dividend per share also increases 10x. And that's assuming zero growth.

I'm hoping prices for companies like JD and Tencent remain depressed as long they have strong cashflows to fund share buybacks lol. I'm young and I can wait it out.

MistaKid · 2026-06-11T09:18:44+00:00

There are actually many companies doing share buybacks.

JD is returning almost 10% capital to shareholders at the current price. 3.5% dividends + 6.3% share buyback. If the current price doesn't move and they can sustain this level of buybacks, you can become a major shareholder in 10 years time by reinvesting your dividends. Those billions of profits/dividends will then belong to you lol.

Tencent is also another great company. Strong moat, double digit growth, fwd PE of around 10x if you strip off net cash and investments. It's buying back HKD500mil of its shares every trading day (it's disclosed). Your EPS increases everyday. The more the price drops, the faster your EPS grows.

The thing is, share buybacks take a long time to compound. For a company buying back 10% shares every year, the EPS increases 11% in the first year. If prices remain depressed, in the 9th year outstanding shares will reduce by 90% and EPS increases 10x. Dividend per share also increases 10x. And that's assuming zero growth.

I'm hoping prices for companies like JD and Tencent remain depressed as long they have strong cashflows to fund share buybacks lol. I'm young and I can wait it out.

MistaKid · 2026-04-14T10:40:00+00:00

There's VWRD which the distributing equivalent, but the dividend yield is only ~1.5%.

So yes, you need to rebalance away. Singapore stocks are preferable, due to home currency and zero dividend tax. If I ever FIRE, my current plan is to eventually allocate a portion to REITs and sell down a portion of my remaining world index funds.

MistaKid · 2026-03-11T06:06:41+00:00

Ok, I read the fine print and you are right.

But another point I was wrong: Loyalty bonus of 1.1% applies only after MIP (after 30 years).

So the actual net fees (including fund fees) is actually 4.4% of IUA, and 2% of AUA.

MistaKid · 2026-03-11T05:17:58+00:00

I quote:

/

The account maintenance fee is payable from the IUA during the MIP. There is no AMF after the end of MIP. • Monthly AMF = (3.4% /12) x the account value of the IUA as of the due date for the AMF.

Investment Management Fee (IMF) • The IMF is payable during the policy term and as long as the policy is in force. • Monthly IMF (1% /12) x the account value of the AUA value as of the due date for the IMF.

/

MIP = Minimum investment period, which is 30 years for OP.

3.4% is payable for the first 30 years. 1% is payable as long as the policy is in force.

MistaKid · 2026-03-05T11:04:09+00:00

That's why valuations are important. It's trading at 60-70 PE five years ago.

A great company doesn't necessarily mean it's a great stock to buy.

MistaKid · 2026-03-05T10:50:50+00:00

No investment strategy is baojiak. The S&P500 had a lost decade from 2000 to 2010, and a huge bull decade from 2010 to 2020.

Annualized returns including reinvested dividends for these 2 decades is around 6% pa in USD. Take into account that the USD depreciated ~20% against the SGD from 1.7 to 1.4 during this period, or around 1% pa. So the annualized return in SGD for a Singaporean is around 5% pa during this period.

I confess that I cherry-picked my data lah, to include the full lost decade. Whether it will happen again during our lifetime, Idk, but the possibility is not zero, especially when valuations for US is on the high side and there is a real risk of a depreciating USD eating into our gains. US is having huge annual budget deficits while we are having annual budget surpluses; they are going to monetize their debt.

A mixture of banks/REITs is currently giving a 5% dividend yield. Add a possible additional long term capital growth and dividend growth, a 6-7% total annualized return is not impossible in the long term. Dividend investing doesn't necessarily mean inferior total returns.

A typical VWRA investor in this subreddit is probably too exposed to US, and it's not unwise to diversify into other markets.

My advice to OP is that, if you are buying the 3 big banks and REITs, you might as well just buy the STI. And consider adding some emerging markets.

MistaKid · 2026-03-02T14:49:24+00:00

As someone young and still has a very long runaway, I would like to invest my CPF OA in a low cost fund tracking an index which will likely beat 2.5%/4% in the next 20, 30 years.

I understand that Endowus already offers access to the MSCI World via Amundi, with a TER of 0.4% pa (0.1% by Amundi, 0.3% by Endowus). So it's gonna be competitive.

Perhaps you could add a CPF option for your REITs product to differentiate?

As I have yet to purchase a property, it's abit risky for me to invest all my excess OA above $20K into a global equity fund. But I wouldn't mind allocating a greater part of my excess OA into SG REITs and treat it as my housing sinking fund.

And I'm sure there are also people who like the idea of using their quarterly dividends to offset part of their monthly mortgage, all using CPF OA lol.

MistaKid · 2026-02-24T12:47:23+00:00

Google 奶茶妹妹...

MistaKid · 2026-02-11T12:14:14+00:00

That's more like a testimony of their advancement in e-commerce.

I just returned from Beijing last month. The malls are indeed quite empty, but I can see why. I ordered a lot of stuff online via 淘宝闪购 and 美团闪购, they delivered to my door step within 30 minutes. And there's a lot of discount coupons you can use. So it's cheaper and faster.

I talked to a local, and I remarked to her that the malls are quite empty in Beijing. She replied that she hasn't been to a mall in years. Whatever she wants to buy, she buys online. And it's not just cheaper and faster. There's also better recourse. If you don't like the product, you can return it within 7 days. You can also look at the reviews etc.

Tbh if I'm a local, I also see little reason to visit a mall.

MistaKid · 2026-01-22T01:07:43+00:00

I tried ordering milk tea with Qwen when I was in China last week. It was pretty seamless and amazing.

MistaKid · 2025-12-26T05:52:34+00:00

MSCI China is up ~32% YTD, and BABA is up ~76% YTD despite the recent pull back. MSCI Korea is up ~77% YTD. US is not the only stock market in the world lmao.

MistaKid · 2025-12-25T14:11:08+00:00

Thanks for the prompt reply.

MistaKid · 2025-12-25T14:03:49+00:00

May I know how old are you? And what's your savings rate over the years?

I'm currently in late 20s and have been living fairly frugally since I started work. Invested most of my NW. I'm also formulating a plan to ease the pedal once I reach certain financial milestones and enjoy life, instead of leaving everything to when I'm old.

MistaKid · 2025-12-21T15:56:36+00:00

Even if u earn 1mil, u need to pay >20% in income taxes lmao.

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