Why enter now?
I’m expecting a beat on August 11th, but that isn’t driving my urgency. What makes me want to expand my position in this company sooner rather than later is the revised thesis on Asian e-commerce due to Alibaba’s profound issues, the ongoing COVID crisis, and the trends in NYSE investment. Retail investors have to conduct their own research and make their own decisions, algorithms on the other hand can make massive acquisitions as soon as they are given a ‘buy’ signal, which in the case of CPNG could come sooner rather than later.
This is because of the anticipated shift over the next 10-18 months from ‘stable’ large cap to ‘speculative’ small/mid cap growth. We’ve been hearing a mixed story about the “rotation from growth to value” for a while now, and a cross section of ETFs can be used to make this case, that even with AAPL adding .5 T like it was nothing, value is up 16% YTD compared to growth, up 10% YTD, however, the “reopening” narrative seems to have shifted since mid-May, with speculative growth such as ROKU gaining 11% compared with cyclicals and banks, any of which provide ample evidence contrary to the popular rotational narrative. Alphabet notwithstanding, even with amazing ER beats, large cap tech is selling off their ATHs. While it is clear in recent days that some of these profits are flowing into fake internet money, I’m not here to tell you about that, instead to bring your attention to an opportunity in a company that actually makes things and provides services.
How to play it? LEAPS or shares only, both of which are extraordinarily cheap right now, and which probably won’t be quite as inexpensive in the near future as Coupang’s footprint in Asian e-commerce continues to expand, and investment in Asia further consolidates outside of China. I think you have about a quarter to establish a strong position before it becomes about 50% more costly to do so. This gives you some time to be patient with its growth, but not so long that I would hesitate to make the move. The real profits are made on surprise stories
