In times when no one pay attention to fundamentals

Many experienced investors look where most of people are not looking. Looking at TME chart it looks like trash if anything one may want to short it with such downward momentum. While in short term there is gain in shorting TME (At this time there are no good entry and exit point as the price is going through an uncharted territory). If you look at some education content online it is not hard to stumble upon market participants bragging how they don't "fish the bottom" or not "adding to a losing position". But big money plays it differently. They do add to a losing position because for one they can afford to do so, they do not need to barrow money to do it and secondly they hunt for bargains! I believe if you look under the hood at this prices TME is a bargain!

The company is having net profit quarters after quarter. With positive annual EBTIDA and EBTI. Is it under pressure from Chinese government? Absolutely, but right now it is a hot topic around every Chinese stock. It is just matter of time for dust to settle! Unlike education sector in China TME will thrive unless Chinese government bans streaming music all together!

The book value on TME is 4.77 meaning if TME to be delisted or get liquated today this is roughly how much each investor will receive per share. At less than 50% of it current value! Just to put things in perspective TSLA trading at $660 has book value of $23! So aren't we looking at a bargain?

So how am I going to play this?

I have been having a tiny position averaging at about 11.00. I have added to my position today small and going to add to my position at around 5.50 in larger number of shares but in the same dollar amount as before, if we ever get there. I am not expecting to profit from this in a short period of time hence I am investing the money I can pretend I never had to begin with (I can afford to park my cash). As of now there is no exist strategy on TME I am just going to wait for sell off to end and going to plan for one once the stock changes trend (it may take years!)

Comment:

Eventhough, it may look like a change in trend however, TME has not changed its downward trend it needs to close above 9.20 for a day to do that. Therefore I am not adding any further to my position unless we see 5.5 or it goes above 9.50! Again this is an investment strategy not a trade strategy!

Trade active:

While it seems that TME is breaking out of downtrend technically bullish pattern is not yet confirmed. We really need to break out of the base area shown in this chart. Eventhough, I have position in TME and bullish in long run, I do not yet recommend it for technical trade and short term gain. However, as soon as we have a break out of this base I will add to my position!