| | | Charlie Munger's Recent Statements/ Chinese Value Stocks
Dear SI Members,
As some of you may have read/ heard from the Daily Journal's recent AGM, one of the OG's of value investing a.k.a. Charlie Munger stated that investing in Alibaba (BABA/ 09988) was one of the biggest mistakes he's ever made in his life.
His stated reasons were that he was overly charmed by the seemingly ironclad position that Alibaba possesses in the Chinese internet sphere, all the while forgetting that it was a "godamn retailer" at the end of the day.
I think his retail references go back all the way into the mid 60s when Buffett, Munger and the late Sandy Gottesman of First Manhattan invested in an operation called Diversified Retailing. From what I remember, it was a pretty bitter experience for the trio and they all considered themselves lucky to have been able to walk away at breakeven (or a minor loss).
Now I have the utmost respect for Munger and hold him literally in the highest regard. But with that said, I do disagree with him this time when it comes to Alibaba.
In short, I think that:
1. Comparing Alibaba to a traditional retail business operation is not the most rational comparison for obvious reasons.
2. I do objectively think that Alibaba (and Chinese tech in general) continue to offer better value than their American counterparts at this point.
3. In fact, one could make the argument that Munger dove headfirst into Baba (even going on margin) at too high a price back when he did. Which I suppose he did admit to i.e. saying he was too charmed with Alibaba's prospects back then.
Anyway, these are my humble opinions and welcome any feedback from the community. What do you guys think about the value (or lack thereof) that Chinese tech stocks have to offer these days?
Sincerely,
Burryville18 |
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