I spent some time on the phone with the legendary tech analyst, Gene Munster, Monday afternoon. He’s a Revolutionary kind of thinker who used to cover Apple and other tech stocks for Piper Jaffrey for many years and these days he a VC shop called Loup Ventures.
I was a bit shocked when he said perhaps his favorite stock right now might be JD. I told him I had puts on JD because I figured that the Chinese government was still going to punish the CEO for the embarrassment that came from his rape charges in the US a couple months ago. He countered that point with the fact that the Chinese government is more likely in a “screw the US” state of mind. Good point.
He told me that the stock is undervalued and that in his company’s surveys of consumers in China that JD almost always comes up. I told him that I never like to invest in Chinese stocks because I don’t trust the Chinese accounting system, enforcement system or the Communist Autocracy that it still is.
But, I asked, perhaps the fact that there are going to be more than a billion middle class consumers in China, hundreds of millions of whom are being lifted out of poverty in a form of a middle class, and maybe that’s a reason to own a least one or two Chinese stocks.
He agreed with my concerns but always reiterated my conclusion — I should own a couple Chinese stocks.
So I’m being flexible here. I’ve actually gone out and bought some JD common here. I’ve still got some JD puts so I’m hedged on the position either way right now. But I plan to let the put options simply expire if they’re out of the money when the time comes and I’ll hold onto some JD common and perhaps buy another tranche of it in coming days or weeks.
PS. I just got back to the office 20 minutes ago after seeing Amaris arrive at home at lunch and started writing this up and now I notice I’m running late on the writing here. Yes, we got Amaris home today. She soon fell asleep. I ran home to bring lunch and help out a little bit as they arrived at lunch time. I understand what it means to be humbled by all the prayers and support that so many people gave to us the last sixty days. I should be able to come in on the weekend to some writing and analysis for Trading With Cody for the first time since the hedge fund launched 51 days ago too.