Putting half of his net worth on Chinese concept stocks, "The Big Short prototype" Michael Burry made a profit this time
Renowned investor Michael Burry has nearly half of his investment portfolio in Chinese concept stocks, mainly including Alibaba, Baidu, and JD.com. With the release of liquidity by the People's Bank of China and the high market optimism, Burry's investments have gained significant returns. According to the SEC's 13F filing, the holding value of Alibaba has increased from $9 million to $11.2 million, with the three stocks collectively accounting for approximately 46% of his investment portfolio. This week, as the Chinese stock market surged, Burry's investment portfolio also profited accordingly
From the People's Bank of China's release of a "policy gift package" to the signal of heavy fiscal and monetary support from the Political Bureau meeting on Thursday in September, the optimistic sentiment of domestic and foreign investors has been completely ignited, with a frenzy of global capital pouring into the Chinese market.
As the Chinese stock market soared, one of the happiest individuals is the famous subprime "big short" Michael Burry, who truly made a fortune this time. SEC's 13F filings show that his investment firm Scion has placed nearly half of its investment portfolio on Chinese tech giants.
Continuous Increase in Chinese Concept Stocks
According to the 13F regulatory filings, in the second quarter of this year, Scion increased its holdings of Alibaba by 30,000 shares, with the position value rising from $9 million in the first quarter to $11.2 million, making it its largest holding. Baidu and JD.com each accounted for 12.36% and 12.31% of its investment portfolio. As of June 30, these three Chinese stocks collectively accounted for approximately 46% of Burry's entire investment portfolio.
It is reported that as early as the fourth quarter of 2022, Burry began to significantly increase his investments in Chinese stocks, with Alibaba and JD.com entering Scion's portfolio.
Chinese Concept Stocks Soaring, Burry Making a Fortune
This week, with the People's Bank of China lowering reserve requirements and interest rates to release liquidity, and encouraging companies to repurchase and increase their stock holdings, Chinese assets experienced an "epic" turnaround.
As of this week, the iShares MSCI China ETF has risen by 18%, while the stock prices of Alibaba, Baidu, and JD.com have increased by 17.94%, 17.72%, and 31.77% respectively.
HedgeFollow, a hedge fund tracking website, stated that "the recent rise in the Chinese stock market should mean that Burry's investment portfolio has also gained considerable returns, with Alibaba seeing the largest increase".
The company also mentioned that assuming Burry has not sold any shares since Scion's last 13F filing on June 30, the average cost per share of Alibaba he holds is $78.83, while Alibaba's stock price reached $105.25 in Thursday afternoon trading, representing an increase of about 34%.
Considering his holdings of Chinese concept stocks in his entire investment portfolio, the total returns would be even more substantial.
Coincidentally, billionaire investor David Tepper also profited from the recent surge in the Chinese stock market, making a significant profit. Like Burry, Tepper also listed Alibaba as the top holding in his hedge fund, accounting for about 12% of the value of his $6.2 billion Appaloosa fundDuring his interview with CNBC on Thursday, he stated:
"Now is the time to 'buy everything'. The growth rate of large-cap stocks in China has reached double digits... Chinese stocks still have a lot of room to rise."