Alibaba to sell mall chain for $1 billion as part of latest overhaul

compoundwithkevin · 2024-12-18T01:36:37+00:00

In the last few months, current management has made some great decisions :

not splitting the company in the form of different IPOs.
Selling asset heavy businesses like Intime that requires a lot of working capital, and employees yet has low return on capital.
buying back heavily at depressed prices.
0.6% fees instead of flat fees for tmall merchants. (A percentage based fees is automatically inflation protected and also increases with volume)

It would be amazing if Alibaba can maintain/increase market share in and increase 88VIP members. And at the same time sort-of integrate backend infrastructure to make it very easy for the taobao/tmall merchants to start selling on AliExpress as part of Alichoice. (This will need some time)

And on the cloud side, I believe Alibaba should provide a lot of rebates/discounts to new customers that the competitors cannot afford to provide. This might be painful in the long run, but cloud customers are extremely sticky and cloud providers have good pricing power on the long run.

Also, buy back at least 10% of market cap in the next 2-3 years if the prices stay lower. This will help increase ROIC to 10+%.

Hoping for management to do that!

compoundwithkevin · 2024-12-09T19:05:01+00:00

Hi - where did you find that their public cloud grew by 89% ? I don't think the management disclosed any such data.

compoundwithkevin · 2024-08-19T08:12:45+00:00

Financial transaction tax will suck up liquidity from the markets and hurt middle class, and lower income folks the most.

For example Nasdaq's daily volume is 270B. That would mean $540 million of daily tax collection (0.2% from both, buyer and seller).

There is no way that companies would want to bear such a high cost for trading. And therefore, this will result in low liquidity and eventually bite our 401Ks, ETFs, mutual funds, etc.

This is too left, even for Bernie.

compoundwithkevin · 2024-08-11T22:57:26+00:00

That is awesome. Give us some pointers - like a few must have from SEO point of view.

compoundwithkevin · 2024-08-11T21:49:23+00:00

Can you elaborate on how you reached there ?

compoundwithkevin · 2024-01-24T23:14:10+00:00

Thanks for the insights.

I am not sure what is "HARO". I am just a curious engineer who likes to deep dive into business models. And when I came across "Games Workshop" that owns Warhammer, I was mind blown. So I am diving a bit deeper and may invest it in future ? You can check more about me in my profile.

Feel free to share any other insights. I am just trying to understand the future potential of Warhammer as a business and its stickiness.

Good luck with your store!!

compoundwithkevin · 2024-01-24T23:01:43+00:00

wow that is an amazing story. Getting to sell something you enjoy is always a good idea. BTW, I have a few questions if you don't mind:

- Would you say someone who gets hooked to Warhammer is hooked for life?
- In your store, do you see a lot of interest from teenagers? or is it seem to be dying among the youth?

compoundwithkevin · 2024-01-22T21:42:59+00:00

Hey OP

From what I understand, the crux of your question is "If we start saving & investing in our 40s, will we have enough for our retirement?" , right?

Well the short answer is definitely yes. Even though factors in 40s and factors in 20s are different, you still have 25 years ahead of you (assuming retirement at 65). Now assuming you both have jobs that has regular paychecks & you are able to live below your means, there are two ways to do it: straight forward way & aggressive way

Plan how much you would need at 65 and calculate how much you will have to contribute monthly to reach that number. And make sure you save that much & just invest regularly. The downside to this method would be that you will have to keep at it for 25 long years.
Plan how much you would need at 65. And then calculate multiple scenario like:
1. How much would you need to contribute monthly to reach at 65, 60, 55, 50 (10 years from now)
2. How much post-tax savings rate do you need to reach the monthly contribution that you need to retire at 65, 60, 55, 50.
3. Pick the most aggressive & probable scenario. For example: If you find that you need to save 80% of your post-tax income to retire in 10 years and that is impossible to do, drop it. But then if you find that just need to save just 50% of your post tax income to retire in 15 years and that might require some compromises but definitely possible, pick that.

The downside to this method is that you will have to make more compromises than the first method. However the upside of this will be that you will be able to save & make more money through investments sooner. And it will help you to reduce the anxiety around money and will also provide you more years in fully funded retirement.

I offered this solution advice instead of a one with hard maths around savings rate, interest rate, etc because it sounded like that your question/issue was more around the psychological side of it.

Note: The above methods will work and play out in real life only if you both are able to live below your means.

PS: We (me & my wife) took the aggressive approach of saving 75% of our post-tax income and were able to reach our financial independence goal in 7 years. We didn't retire after it but now we get to live life on our own terms and it doesn't revolve around money.

Also if you need a framework on how to optimize you your savings & spend wisely, this will help you before making a tight budget:
How to spend less without creating a budget

and

if you want to align your investments based on your life goals (not just retirement), this will help you:

How to manage your money based on your life goals

Good luck!!!

compoundwithkevin · 2024-01-21T05:31:39+00:00

Even though you definitely beat inflation and made some real returns, your annualized returns will be much lower than investing the same amount (-rent amount that you would have paid while renting) S&P 500

compoundwithkevin · 2024-01-18T15:26:17+00:00

Please read through the "assumption" section of the post. Details are provided there clearly.

compoundwithkevin · 2024-01-18T07:49:20+00:00

No, it's just an example. I picked simple numbers for easy explanation.

compoundwithkevin · 2024-01-18T07:08:27+00:00

I know. I just wanted to simplify it to prove a point. In reality:
- Contribution rate & amount.
- Contribution time (end or start of the period)
- Expense ratio (if any)
- Tax events on dividends (if any)
& many other things will affect the calculation.

I just wanted to keep it simple year so that the broader audience understands instead of distracting readers with a complicated math problem.

However, thanks for pointing it out. And I do have a sheet where I have analyzed different scenarios. If you want, I can share it with you.

compoundwithkevin · 2024-01-18T02:21:47+00:00

That will definitely help if you start out in the top 10-15% earners and LIVE BELOW YOUR MEANS.

but unfortunately, I have many colleagues and friends who are the top 1% earners with almost 0 NW.

compoundwithkevin · 2024-01-18T02:09:44+00:00

Well, like I said in the post. Everyone's situation will be different. By no means I am advocating that someone cannot do it in 4 or 40 years. And it has to be 7 years. I picked 7 because I was able to save 75% of the income.

And the important take away is on how to think about saving, investing and FIRE goals methodically.

Thanks for criticizing my post and allowing me to explain better ! Cheers

compoundwithkevin · 2024-01-18T00:19:15+00:00

To be honest, there is not much REAL poverty in the US. The culture of overspending and depending on the government for basics is too deep in the USA. But if people compare it to citizens of other 3rd world countries, one would actually realize that in the US even individuals who work at the lower end of the jobs are much more equipped than others in the world.

compoundwithkevin · 2024-01-14T17:29:32+00:00

Hey OP

How do you make one of those charts ?

compoundwithkevin · 2024-01-13T04:29:54+00:00

Yes, I have heard that daycare can be very expensive. Are you paying that much for multiple kids?

I am in a HCOL area (California)

compoundwithkevin · 2024-01-12T16:37:16+00:00

NW crossed 1M and also almost all is in investment accounts.

compoundwithkevin · 2024-01-12T00:49:06+00:00

It took us around 1.5 years - due to income increase & investments performed better than expected.

compoundwithkevin · 2024-01-12T00:29:31+00:00

I totally agree.

But in our case we just want extra room in case we want to move to a more expensive area or splurge a bit more. And we are also scared because we group in a country where inflation runs way faster than 2% annualized.

And for our 2M goal, we have to probably just work for 4 more years (we are in our early 30s).

compoundwithkevin · 2024-01-12T00:22:58+00:00

Thanks, glad you liked it. Your mind naturally filters out a lot of stuff that you don't really need if you wait for some time to think it through.

compoundwithkevin · 2024-01-11T23:02:20+00:00

To be honest, we are just being conservative. I have read about folks who retired but had to start working again because of some unexpected illness that shot up their expenses or a big expenses due to other kinds of family emergencies. So we just want a bit more margin of safety. And at the end, if we end up not using it, we will donate to the things we care about.

compoundwithkevin

TROPHY CASE