To The Moon

You are weighing two classic investment mindsets—contrarian (underdog) versus momentum (major trend). Both have merit, but the context matters.

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The Underdog Case (Meituan)

Valuation Compression: After a steep sell-off, the stock may be trading at a discount relative to its fundamentals, making upside potential more attractive if execution improves.

Asymmetric Payoff: Negative sentiment may already be priced in, so any positive catalyst (e.g., easing competition, better margins, regulatory tailwinds) could trigger outsized gains.

Long-Term Positioning: If you believe Meituan can defend market share and eventually monetise new initiatives, the current weakness could be a buying opportunity.

Risk: Catching the underdog requires patience and conviction, as underperformance can persist for a long time before reversal.

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The Major Trend Case (Alibaba / Nvidia analogy)

Market Momentum: Following strong earnings, Alibaba is enjoying renewed investor confidence. Riding trends with market support often reduces downside risk in the near term.

Clarity in Fundamentals: Clear catalysts such as restructuring, buybacks, or regulatory stabilisation make the investment case easier to justify.

Capital Preservation: In a risk-averse environment, aligning with market favourites tends to be safer.

Risk: Upside may be capped if valuations expand too quickly. Entry after a big surge can lead to “buying the top.”

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Why Some Investors Pick the Underdog

Greater long-term upside if the business successfully turns around.

Better entry multiples compared to popular stocks.

Contrarian strategies can outperform if the crowd is overly pessimistic.

Why Others Stick to the Major Trend

Higher probability of stability and smoother compounding.

Safer alignment with institutional money flows.

Fewer sleepless nights worrying about downside risks.

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A balanced approach could be: anchor most of your portfolio in the major trend (for stability) while allocating a smaller portion to the underdog (for optionality and asymmetry).