Charlie Munger’s Daily Journal apparently cut its losses on Alibaba last quarter, halving its stake in the second half of 2021 after quadrupling the size of its bets, a regulatory filing revealed on Monday.
Munger is best known as the business partner of Warren Buffett and the vice-chairman of Berkshire Hathaway. However, the 98-year-old also served as the chairman of the Daily Journal for 45 years before stepping down last month. He continues to oversee the investment portfolio of the newspaper’s publisher and legal-software supplier.
The Daily Journal originally bought 165,000 US depository shares (ADS) of Alibaba in the first quarter of 2021. It raised that bet 83% to about 302,000 shares in the third quarter, then nearly doubled it to 602,000 shares in the fourth quarter. Meanwhile, Alibaba’s share price has halved from last year to below $120.
Munger and his team turned around last quarter, reducing their Alibaba holdings to 300,000 shares as of March 31. The stock of the Chinese e-commerce company has fallen another 15% this year.
Alibaba’s shares were plummeted last year after Chinese regulators tightened restrictions on its country’s biggest technology companies. This year, they have been caught in a broad sell-off of high-risk technology stocks, as concerns about rising interest rates and the Russia-Ukraine conflict stifled global economic growth and rising tensions between the US and China.
It is possible that the Daily Journal closed its ADS for Alibaba’s Hong Kong-listed shares, as its quarterly portfolio update does not include non-US holdings. The company’s first-quarter earnings report, due out in mid-May, should provide further details about the publisher’s purchases and sales of securities from the previous quarter.
Munger’s clear turn on Alibaba comes after the Daily Journal sold $50 million of shares in December and borrowed $37 million from its margin-loan account to invest primarily in foreign securities in the fourth quarter.
The Daily Journal’s portfolio of five US-listed stocks stood at $213 million at the end of March, including a $95 million stake in Bank of America and a $77 million stake in Wells Fargo. It reported a total of seven holdings at the end of September, suggesting it holds two foreign-listed stocks, one of which is probably Munger’s beloved BYD.