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.
Conclusion
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!
No comments:
Post a Comment