The movie "The Big Short" prototype half position Chinese stocks! Expected to make a furious profit of 34% per ticket
Hedge fund manager Michael Burry profited from the soaring Chinese stock market, with about 46% of his investment portfolio allocated to Alibaba, Baidu, and JD.com. Burry's stake in Alibaba reached 21%, and he continued to increase his holdings in the second quarter of this year. The stimulus policies of the People's Bank of China have driven the stock market up, with the iShares MSCI China ETF rising by 18% this week. Burry's Alibaba shares are expected to increase by 34%. Billionaire investor David Tepper also stated that now is the time to buy Chinese assets
For Michael Burry, the protagonist and hedge fund manager in the movie "The Big Short," the surge in the Chinese stock market this week is a joy.
Burry has been heavily buying Chinese stocks since the fourth quarter of 2022 and is now reaping the rewards.
According to 13F filings, Burry's Scion Asset Management manages around $200 million, with about half of the portfolio invested in Chinese tech giants.
In his portfolio, Alibaba holds the largest stake at 21%. As of the second quarter of this year, he was still buying Alibaba's stock, increasing his stake by 24%.
Burry has 12% of his portfolio invested in Baidu and another 12% in JD.com. As of June 30th, approximately 46% of Burry's portfolio is invested in these three Chinese stocks.
After China announced significant stimulus policies, all three stocks saw significant gains this week.
The People's Bank of China announced interest rate cuts, reduced the reserve requirement ratio for banks to stimulate lending, and expressed plans to provide liquidity support to the stock market. Policymakers also encouraged companies to start stock buybacks.
All these measures and policymakers' moderate comments led to a significant surge in the Chinese stock market this week.
The iShares MSCI China ETF has risen 18% so far this week. Meanwhile, Alibaba, Baidu, and JD.com have risen by 19%, 18%, and 32% respectively.
According to HedgeFollow data tracking and compiling 13F filings, the recent rise in the Chinese stock market should mean that Burry's portfolio, with Alibaba as the largest holding, has also seen substantial growth.
HedgeFollow estimates that Burry's average cost per share of Alibaba is $78.83. On Thursday afternoon, Alibaba's stock price reached $105.25, an estimated increase of 34%.
This is assuming that Burry has not sold any shares since Scion submitted its last 13F filing as of June 30th.
Burry is not the only hedge fund manager profiting from the recent surge in the Chinese stock market.
Billionaire investor David Tepper stated on Thursday that now is the time to buy "everything" Chinese assets.
Like Burry, Tepper also considers Alibaba to be the largest position in his hedge fund, accounting for about 12% of his $6.2 billion Appaloosa fund. Tepper believes that due to undervaluation, there is still more upside potential in the Chinese stock market.
Tepper said in an interview on Thursday, "Even with recent fluctuations, they are like at a low point compared to the past. The P/E ratio is only one time, and the growth rate of large stocks trading here reaches double digits."