It's hard to fight momentum on Wall Street. Whether the market is surging higher or dropping like a stone, taking the other side of the trade can often end up costing you.
Alibaba Group Holding BABA, +0.97% is plotting 30% revenue growth this fiscal year and another 25% growth next year — figures that top the admittedly impressive growth of Amazon. Furthermore, while Western nations continue to wring their hands over the influence of Big Tech, with President Trump and the European Union finding a rare issue of agreement as they take aim at Amazon, Alibaba remains quite cozy with the Chinese government and carries much lower political risk.
Yet Big Pharma names including Merck & Co. MRK, +0.42% , GlaxoSmithKline GSK, +0.26% and Pfizer Inc. PFE, -0.89% have all performed worse than the S&P 500 since Jan. 1 — proving bigger isn't always better and even supposedly stable healthcare companies can suffer when they are reliant on an aging drug pipeline and a growth-by-acquisition strategy.
That strategy may work as a swing trade, as Schlumberger is up about 60% from its March lows and Haliburton has surged almost three-fold from the low $4 range to back over $12 a share. However, depending on this run to continue seems a dangerous strategy. Wells Fargo & Co. WFC, +5.43% has started to attract some attention among bargain hunters, as the $110 billion bank looks to turn the page on past missteps over the last few years with a new CEO and new structure, including a dedicated focus on small businesses. Trading at less than 70% of its book value, this stock seems quite interesting to many right now.
'Alibaba remains quite cozy with the Chinese government and carries much lower political risk.' Coz this's how companies work in China, companies like Alibaba or Tencent have special department for the CCP.
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