The heart that just wanted to open a position in Meituan was instantly drenched.

Although I have never been optimistic about Meituan throughout the entire food delivery war.

However, after my portfolio became too concentrated, I saw Meituan's stock price fall below its 52-week low a few days ago, and I was genuinely tempted to consider opening a small observation position.

Although the business model of food delivery is not as good as e-commerce, I feel it's still within my circle of competence—a business I can understand, and a pretty decent one at that.

However, just as I was getting tempted, two pieces of bad news came in quick succession over the past two days.

One is that Douyin finally launched the Dou Shengsheng App, but I don't think we need to worry too much about Douyin's independent group-buying app.

Because in fact, Douyin Mall's independent app is also mediocre, and group-buying currently relies more on the Douyin ecosystem. Going solo might not achieve much.

The other, of course, is the news that Alibaba will continue to boldly pursue flash sales, aiming to be free from (loss-making) burdens within three years.

Mr. Ma also stated: "Taobao Flash Sales is a battle of milestone significance for the group."

From my perspective, I also think that over the past few years, Taobao has fought the flash sales battle brilliantly, essentially maximizing the value of Ele.me, "making the best use of everything," and letting it fade into history.

Taobao's e-commerce is currently on a downward slope, making flash sales the undisputed "second curve." How could they not seize such a hard-won major opportunity?

Based on this information, revisiting the idea of opening a position in Meituan immediately doused my enthusiasm.

You shouldn't concentrate just for the sake of concentration, nor diversify just for the sake of diversification.

At the beginning of 2024, the market was worried about Douyin entering the food delivery market, and Meituan's stock price fell to the 60s. Although it later proved to be a false alarm and the price quickly rebounded.

Looking at Meituan's situation today, compared to two years ago, it's actually much more difficult.

Being squeezed from both sides by Douyin and Taobao, with Tencent also exiting its investment, it's truly a fight with its back against the wall.

Thinking about it this way, why bother wading into these troubled waters?

Currently, I don't dare to increase my position size, and it would also consume mental energy. What's the real difference between just adding a small observation position and having it on my watchlist?

Unless I can wait for an absurdly low price, then I'll consider it specifically.

$MEITUAN(03690.HK) $BABA-W(09988.HK)