Munger Says Chinese Firms Provide Better Strength Per Dollar
One of the more controversial positions in his portfolio is Alibaba Group Holding Limited (NYSE:BABA), the Chinese tech giant with a market capitalization of close to $300 billion. Over the past few months, the shares of the tech firm have slumped, dropping by more than half in value since April 2021, due to a regulatory crackdown in China and an inflationary market in the US. Munger has used the opportunity to double down on his bet on the Chinese company, increasing his stake by 99% and 82% in the last two quarters of 2021.
At the annual meeting of Daily Journal Corporation shareholders in mid-March, the veteran investor outlined his broader economic outlook and thoughts on China in particular. When asked about his interest in Alibaba Group Holding Limited (NYSE:BABA), Munger was of the opinion that he thought he could get “more value” in terms of the strength of the enterprise and the price of the securities in China than he could get in the US. He also highlighted that leading venture capitalists in the US were on the same boat that he was in with regards to China.
After the Russia attack on Ukraine and the Western sanctions on Moscow, financial experts in the US are questioning the foresight behind investing in China due to the Chinese position on Taiwan. Munger was asked about this and the possibility of Chinese firms being delisted in the US for failing to meet international accounting standards. The investor noted that his position in Chinese stocks was simply because he got “better strength per dollar invested” and the firms he invested in were priced lower but stronger than the competition.
https://finance.yahoo.com/news/...ger-thoughts-china-5-135827070.html |