I Sold All Of This Stock

Summary

In this video, the speaker discusses their decision to sell their entire position in PDD Holdings during the last trading hour on Friday. They explain that despite positive earnings reports, PDD's stock has been frustrating due to inconsistent share price movements and recent concerns about profitability. The speaker also highlights their goal to reduce portfolio positions and reinvest in more reliable stocks. Additionally, they mention their continued investment in Alibaba and provide insights into PDD’s balance sheet and future outlook. They conclude with reasons for exiting PDD and thoughts on investing decisions.

Takeaways

• 📉 The speaker sold out of a Chinese stock (PDD Holdings) last Friday due to concerns about its performance and outlook.
• 💼 The speaker still holds shares in Alibaba, which has seen a significant rally recently, but decided to offload PDD Holdings due to its volatility.
• 📈 The decision to sell PDD was prompted by a combination of disappointing earnings reactions, despite the company consistently beating expectations on EPS and revenue in prior quarters.
• 🤔 The speaker was frustrated that the stock price did not reflect the strong financial performance of PDD, even when results were positive.
• 📉 PDD Holdings’ stock dropped nearly 40% after a recent earnings report, raising concerns about the company’s future profitability and growth.
• 💰 The speaker expressed frustration over the company's management decision not to return capital to shareholders via share buybacks or dividends, despite having a strong balance sheet.
• ⚠️ PDD Holdings' lack of clear guidance and vague communication about a potential decline in profitability further increased the speaker’s uncertainty about the stock.
• 🗣️ The speaker emphasized that PDD management’s commentary on profitability and growth was unclear, making it hard for investors to forecast future performance.
• 📉 Although the speaker believes PDD could still perform well, the uncertainty led them to reduce exposure to Chinese stocks by selling PDD Holdings.
• 😌 The speaker feels more comfortable and relieved after selling the position, even if it might still perform well in the future.

Q & A

Why did the speaker decide to completely sell out of PDD Holdings?

The speaker sold out of PDD Holdings because they had concerns about the company's future profitability, lack of guidance, and frustration with the stock not reflecting strong earnings in its share price.

What was one of the speaker's main frustrations with holding PDD Holdings?

The speaker was frustrated because PDD Holdings delivered strong earnings reports, significantly beating expectations, yet the stock price didn’t respond positively, leaving the speaker feeling unrewarded as a shareholder.

What does the speaker mention about PDD Holdings' balance sheet?

The speaker mentions that PDD Holdings has a strong balance sheet with over 10% of its market cap in cash and minimal debt. However, they were disappointed that the company didn't use the cash to offer dividends or share buybacks.

Why was the speaker concerned about PDD Holdings' future guidance?

The speaker was concerned because the company did not provide clear future guidance, and the CEO mentioned a potential decline in profitability, which made it difficult for the speaker to predict the company’s future performance.

What impact did PDD Holdings’ earnings report have on the stock price according to the speaker?

Despite beating earnings expectations, PDD Holdings’ stock price either stayed flat or dropped, frustrating the speaker. In particular, after one earnings report, the stock fell nearly 40%, even though the earnings were decent.

What does the speaker say about their exposure to Chinese stocks after selling PDD Holdings?

The speaker mentions that they still have exposure to Chinese stocks through their holdings in Alibaba and are comfortable continuing to hold that position, but decided to exit PDD Holdings due to its issues.

How did the speaker describe their feelings after selling PDD Holdings?

The speaker felt relieved after selling PDD Holdings, saying they would sleep better at night knowing they no longer held a stock that caused frustration and uncertainty.

What reasoning did the speaker provide for reducing the number of positions in their portfolio?

The speaker wanted to reduce the number of positions in their portfolio to minimize the time spent reviewing financial reports and to focus on higher-quality stocks with better long-term prospects.

What alternative actions did the speaker wish PDD Holdings had taken with its cash reserves?

The speaker wished PDD Holdings had used its cash reserves to either offer a special dividend or conduct share buybacks, especially after the stock’s recent struggles and the lack of clear guidance from management.

What was the speaker's overall outlook on PDD Holdings' potential future performance?

The speaker acknowledged that PDD Holdings might still perform well in the future, especially given its strong historical growth and success with Teemu. However, they no longer felt comfortable holding the stock due to uncertainty and management's lack of transparency.