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Friday, January 7, 2022

My Idol, Charlie Munger, boosts Alibaba's stake, purchases another 300K shares

This is exciting news to talk about. One of my idol investors, Charlie Munger, raised its holding by 99.3% to 602,060 sponsored American Depository Shares of Alibaba Group (Ticker: BABA) as of December 2021. He bought an additional 300,000 shares. It seems he is a huge fan of Alibaba. In this article, I will talk about his investment move when many investors are fleeing the scene. Moreover, I'm going to give my opinion on his investment purchase on Alibaba Group. As you readers know, I am heavily invested in Alibaba and planning to keep my position despite my loss.

Charlie Munger must really, really like China's Alibaba.

Curran recently wrote in Real Money that Alibaba "isn't quite the Wall Street darling it once was." "However, one titan of finance hasn't given up hope yet. Despite a bleak outlook for 2021 and ongoing concerns about regulatory risks as well as the stability of the Chinese economy, Berkshire Hathaway Vice-Chairman Charlie Munger remains bullish on China's top tech company. Instead, he's been progressively doubling down.


Even though the 98-year-old has recently commended the Communist government of China for cracking down on the Chinese e-commerce and cloud behemoth, Charlie Munger, a longtime friend of Berkshire Hathaway's Warren Buffett, appears to be a major fan of Alibaba. 


Daily Journal owns 602,060 shares of Alibaba as of the end of 2021, according to a report with the Securities and Exchange Commission on Tuesday, a position worth $71.5 million. That's nearly double its holdings from the previous quarter when Daily Journal had 302,060 Alibaba shares worth $44.7 million.

Munger, who turned 98 on New Year's Day, has increased his stake in Alibaba as the price continues to tumble due to fears of a Chinese crackdown on big digital firms, as well as concerns about the company's slowing profits growth.


Alibaba's stock dropped 20% in the fourth quarter of last year after losing over half of its value in 2020. Munger's investment in Alibaba is notable because he has made several provocative comments in the last year supporting China's handling of criticism from internet moguls like Alibaba's Jack Ma.


Daily Journal increased its holdings in Alibaba in the fourth quarter but did not adjust its positions in four other stocks: financial heavyweights Bank of America (BAC), US Bancorp (USB), and Wells Fargo (WFC), as well as South Korean steelmaker Posco (PKX).

My Opinion on Charlie Munger's Investment Moves on Alibaba Group.

I think Charlie Munger made a sagacious and strategic investment move by buying more Alibaba shares. "When a result, Munger may be doubling back on the stock as it goes on sale," he said, adding that this is "definitely a move well within his modus operandi." "In a more widely quoted version, he's becoming greedy while others are fearful."


I see the same investment opportunity as a value investor, just like Charlie Munger. I'm pretty sure that the investment move he made on Alibaba has the same reasoning as mine. Similar to him, I also added my position in Alibaba stock; however, I could only buy a little more since I don't have any more capital. If you read my previous article, "Why I'm Going to Keep Holding Alibaba Stock," readers know that my last version portfolio is valued at $1,350,000. This is $350,000 more than the current portfolio version I have right now.

I learned a valuable lesson from this. I realized that I shouldn't go in too fast when I see opportunities in the stock market. Sometimes, the stock market can be irrational, and a stock you have high conviction on still can go down much further. Luckily, I didn't go all-in on Alibaba stock and still have a high concentration on Pfizer Inc. (Ticker: PFE). From this particular stock, I can receive a quarterly dividend payout that I can use to purchase attractively valued stocks.


Charlie Munger's recent double-down purchase on Alibaba stock is excellent news for me. This news gives me the confidence that Alibaba Group (Ticker: BABA) is a perfect investment opportunity for investors. Just like my previous article on my decision to keep holding Alibaba stock despite losing money, I will keep holding this stock for a long-term period. In fact, I will keep buying more if the stock price goes down further.


Let's see how this investment purchase turns out in the long run. What do you guys think about the recent purchase Charlie Munger made. Do you think it's an excellent investment decision? Readers out there, please feel free to give your opinion in the comment section below. I will keep readers updated with my portfolio investment!

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