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Famed “big short” investor Michael Burry is benefiting from the recent surge in Chinese stocks.
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Burry’s Scion Asset Management has almost half of its portfolio invested in Chinese technology companies such as Alibaba.
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China’s recent stimulus measures, including interest rate cuts, have fueled gains in stocks.
The Chinese stocks are bullish this week That must be music to the ears of hedge fund manager Michael Burry of “The Big Short” fame.
Burry began aggressively buying Chinese stocks in the fourth quarter of 2022, and it finally seems to be paying off.
Burry’s Scion Asset Management, which manages about $200 million, has about half its portfolio invested in Chinese tech companies, according to 13F filings.
Burry reckons Alibaba His largest position was at 21% of the portfolio, and he bought more shares in the second quarter, boosting his holdings by 24%.
Burry has 12% of his portfolio invested Baidu, And another 12% was invested in his portfolio JD.com. In total, as of June 30, Burry had about 46% of his portfolio invested in the three Chinese stocks.
All three stocks are up later this week China has been aggressive in announcing stimulus plans to revive its struggling economy.
The People’s Bank of China announced major interest rate cuts, lowered bank reserve requirements to stimulate lending and said it planned liquidity support for the stock market.
The country also encouraged its companies to start share buybacks.
All of these actions and dovish rhetoric from policymakers led to a massive rally in China’s stock market this week.
The iShares MSCI China ETF Up 18% so far this week. Meanwhile, shares of Alibaba, Baidu and JD.com are up 19%, 18% and 32%, respectively, so far this week.
According to data from HedgeFollow, which tracks and compiles data from 13F filings, and recent gains in China’s stock market, Burry is also seeing some sizable gains in his portfolio, with Alibaba leading the way.
Hedgefollow estimates that Burry has an average price of $78.83 for his Alibaba stock. Shares of Alibaba hit $105.25 in afternoon trading on Thursday, an estimated 34% gain.
That assumes Burry hasn’t sold any shares since Zion’s last 13F filing, which provides data through June 30.
Burry isn’t the only hedge fund manager cashing in on the recent surge in China’s stock market.
Billionaire investor David Tepper said Thursday This is a “buy all in” moment for Chinese stocks.
Like Burry, Tepper considers Alibaba his hedge fund’s largest position, accounting for about 12% of his $6.2 billion Appaloosa fund. Tepper believes more upside is due to depressed valuations of Chinese stocks.
“Even the recent moves are flat lows relative to where they’ve been in the past. And you’re sitting with single multiple PEs, with double-digit growth rates for large stocks trading. Here,” Tepper said. He said in an interview with CNBC On Thursday.
Read the original article Business Insider
2024-09-27 08:57:43