“Buy everything China.”
That was the advice famous hedge fund manager, David Tepper, shared with CNBC viewers two months ago after the Chinese government announced a massive stimulus package.
Most Chinese stocks had already experienced strong gains on the stimulus news by the time Mr. Tepper made his comments. His words were like throwing gasoline on a flame. China’s stock market soared even higher.
Since then, China has cooled off a bit. Many of the big-name stocks have given up half, or even more of their gains. And, plenty of skeptics wondered out loud if Mr. Tepper used his appearance on CNBC to pump up his portfolio and sell his positions into the fury.
After all, it wouldn’t be the first time a Wall Street big wig used a live television appearance to talk his book (or her book, Ms. Woods), and lock in quick profits.
But, when Appaloosa Management’s 13-F filing was made public last week, showing all the holdings of Mr. Tepper’s hedge fund, we discovered he still owned 10 million shares of Alibaba (BABA). He also increased his stakes in Pinduoduo (PDD) and JD.com (JD).
Perhaps even more significant is that many other Wall Street big wigs have piled into the name.
Michael Burry – of The Big Short fame – increased his stakes in BABA, JD, and Baidu (BIDU).
Billionaire investor Philippe Laffont’s Coatue Management piled into another 2.4 million shares of BABA, upping its stake to 2.7 million shares.
And, Eminence Capital – a global asset management firm – added to its stakes of Chinese stocks as well.
I could go on. But, you get my point. Some of the biggest wigs on Wall Street piled into China last quarter. And, despite the huge rally in the Chinese stock market in late September, they held onto their shares.
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Since then, of course, the enthusiasm of China’s stimulus package has faded. Chinese stocks have corrected their extremely overbought conditions. Many of the large-cap names are trading back to where they were before Mr. Tepper advised us all to, “Buy everything China.”
Now seems like a good time to take his advice.
Best regards and good trading,
Jeff Clark
Editor, Market Minute
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