At the same time, Buffett decided to reduce his holdings in JD.com and Alibaba, showing a shift in his investment strategy. The market will be closely watching how these decisions play out in the coming months, as Buffett's moves are often seen as indicators of market trends.
Renowned investor Michael Burry, famous for predicting the subprime mortgage crisis, made significant changes to his investments in Chinese internet stocks during the last quarter. He reduced his holdings in Alibaba and JD.com while acquiring a new position in PDD.
Changes in Holdings
Burry's hedge fund, Scion Asset Management, decreased its stake in Alibaba by 25% in the fourth quarter, as indicated by recent filings. Despite the reduction, Alibaba remained the largest holding, valued at $12.7 million by the end of 2024. The fund also trimmed its JD.com position by 40% to $10.4 million in December.
New Addition to Portfolio
Adding to his portfolio, Burry initiated a $7.3 million investment in PDD, the company behind online retailer Temu. Meanwhile, his stake in Chinese search engine Baidu remained unchanged at $11 million at the close of 2024.
Diversification Beyond China
Expanding beyond Chinese stocks, Burry entered a new position in beauty brand Estee Lauder and established holdings in healthcare companies such as Molina Healthcare, HCA Healthcare, and biotech firm Bruker.
Market Trends and Investor Sentiment
Following Beijing's indication of substantial fiscal support, many investors are reevaluating opportunities in the Chinese market. Appaloosa's David Tepper notably expressed optimism by increasing his exposure to Chinese assets, citing government assistance as a key driver.
Outlook on Chinese Economy
Chinese policymakers have already taken steps such as interest rate cuts to stimulate growth. Investors are now anticipating further details on planned stimulus packages, focusing on areas like consumer demand and the real estate sector. Despite China's 5.4% growth in the last quarter of 2024 surpassing expectations, concerns persist regarding deflation and the impact of new tariffs imposed by President Donald Trump.
Michael Burry's Background
Michael Burry gained prominence by accurately predicting the mortgage crisis of 2008 through bets against mortgage-backed securities. His story was portrayed in Michael Lewis' book "The Big Short" and the subsequent award-winning film of the same name.
