The Lesson of iQiYi Stock's Dramatic Drop Isn't What You’d Expect

TL;DR

Despite iQiyi's significant stock drop, adding to winners proves successful despite some misses.

Transcript

David Gardner: My biggest loser of the last three years No. 3. This one, I have to say, the ticker symbol is fairly ironic, because the ticker symbol is IQ. You'd think, if I had a higher IQ, I never would have picked IQ when I did, but thereby hangs a tale. Let's talk a little bit about iQiyi, which is sometimes called the "Netflix of China," prob... Read More

Key Insights

• ❓ Chinese market volatility impacted iQiyi's stock performance.
• 🌸 Adding to winners is a successful investment strategy, despite occasional losses.
• ❓ Reflecting on both successful and unsuccessful investments is crucial for growth.
• 🍉 Long-term investment vision outweighs short-term market fluctuations.
• 👣 Track record of successful investments like Texas Roadhouse, Illumina, Match Group, and Okta supports Gardner's investment strategy.
• ❓ Lessons learned from iQiyi's decline emphasize the importance of perseverance in investing.
• ❓ Stock fluctuations do not deter Gardner from his investment principles.

Questions & Answers

Q: Why did iQiyi experience a significant stock drop?

iQiyi's stock plummeted due to the volatile Chinese market, losing around 25% in 2018, impacting higher-priced companies like iQiyi with high multiples negatively.

Q: What lesson does David Gardner draw from his iQiyi investment?

Gardner emphasizes that adding to winners generally yields positive results, referencing other successful investments like Texas Roadhouse, Illumina, Match Group, and Okta.

Q: How did Gardner's initial investment in iQiyi pan out?

Gardner initially recommended iQiyi at $18, which then spiked to $40 in two months. Despite subsequent declines, the overall investment was not a significant loss.

Q: How does Gardner view his investment strategy in light of iQiyi's performance?

Despite iQiyi being one of his biggest losers, Gardner remains committed to adding to winners and believes in the long-term success of this strategy.

Summary & Key Takeaways

• iQiyi, known as the "Netflix of China," faced a 59% stock drop in seven months.

• David Gardner reflects on his investment strategy, highlighting both wins and losses.

• Despite iQiyi's decline, adding to winners remains a successful approach for long-term investments.