Hi Lynn,
I've been trading IPOs for a while now and, in my experience, of course there are many IPOs out there that have no business coming to the public market in the first place as they are either such junk or just not ready.
However, as long as one sees merit in the fundamentals (valuations, potential sector leadership, or some other aspect of the "story") and gets into a core position at a low enough cost, then there is enough cushion in place to let the stock play out. Nothing goes up in a straight line and stops are important but if one is able to trade around a core (ie. manage the greed/fear emotions), then these gems in the rough type of IPOs can be quite profitable and fun:)
That said, I like both HUYA and IQ as longer-term China plays. In other words, "buy right, sit tight" seems to be the motto here. At the moment, I'm favoring HUYA a touch more based on the fact that gaming as a spectator sport is a new and growing phenomenon. I'm no gamer so have no first-hand knowledge to speak of and a friend told me that it might be for people without much of a life, but there is no denying the trend lol!
One important positive point that the article fails to mention is that large Chinese companies such as TCEHY, YY, BIDU are now essentially acting as VC firms. To put it in perspective, in the case of IQ, this would be like GOOGL being the parent of NFLX!
After reading the article, I can't stress enough the judicious use of stops. Also, note how IQ, HUYA, BILI etc follow each other. IOW, when/if Chinese stks lose their momo, well you have to know what to do...
I hope this is helpful to the thread and might spark some discussion. My kids are acting way too wild these days for me to be able to write in more detail. |
