Investor Michael Burry, famous for his role in the 'Big Short,' was raking it in from the resurgence of Chinese stocks back in 2023. His firm, Scion Asset Management, had a hefty stake in China's tech sector—a space that many investors were wary of. But Burry's calculated moves are paying off big time as these stocks began to rebound.
Burry’s Strategic Moves: Cashing In on China
Since late 2022, Burry had been quietly allocating chunks of his portfolio into major Chinese tech players. While others sat on the sidelines with a watch-and-wait approach, he dove headfirst into Alibaba, Baidu, and JD.com—three titans of the Chinese market. According to recent 13F filings, Scion managed about $200 million at that time and nearly half of it was tied up in these three companies alone.
- Alibaba: This stock became Burry's largest position, making up around 21% of his total portfolio. He even ramped this stake up by 24% just before the surge.
- Baidu and JD.com: Both received equal treatment in terms of investment—12% each—which showed Burry’s confidence across multiple fronts within the sector.
This level of concentration—46% across just three names—is a bold statement about where he sees potential growth amidst overall skepticism about China.
The Market Reacts: Government Stimulus Fuels Gains
The boost wasn't just due to individual stock performance; broader market factors were at play too. The Chinese government initiated several stimulus measures aimed squarely at reviving its economy—cutting interest rates and lowering bank reserve requirements to boost lending activities. These measures ignited optimism among traders that echoed through every trading desk focusing on Asian markets.
As the iShares MSCI China ETF surged by 18% almost overnight, so did shares for companies like Alibaba (up 19%), Baidu (up 18%), and JD.com (a whopping 32%).
Burry’s bold choices started shining as profits rolled in; Alibaba jumped from an average purchase price around $78.83 to approximately $105.25—a solid gain nearing 34%. Such movements highlighted not only market recovery but also validated Burry’s strategy amidst noise elsewhere.
