Warren Buffett – Charlie Munger, partner of Warren Buffett, prefers Alibaba shares to treasury bills | Zoom Fintech

Warren Buffett – Charlie Munger, partner of Warren Buffett, prefers Alibaba stocks to T-bills

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Charlie Munger, chairman of the Daily Journal, said a new investment in Chinese internet giant Alibaba is part of a transition to equities because the yield on Treasuries is so low.

Houston Cofield / Bloomberg

Warren Buffett
long term partner
Charlie munger
recently unveiled a new investment in Chinese internet giant

Alibaba Holding Group.

Daily newspaper

(ticker: DJCO) —Munger has served as chairman since 1977, giving the firm’s investment expertise – revealed last week to a Securities and Exchange Commission that filed for possession of 165,320 certificates of deposit US Alibaba ((BA) (BA)) as of March 31 The Daily Journal had none at the end of 2020.

In response to a request for comment on the investment, Munger, who is also vice president of

Berkshire Hathaway

(BRKb), made another statement Barrons:

The Daily Journal Corporation has and needs securities held as cash equivalents. These cash equivalents will normally be US government bonds. But with the return on government debt bonds now so low, the company is instead investing in stocks. And unless the long-term outlook looks good, a common stock is not considered a good cash equivalent.

“A small portion of the Daily Journal Corporation’s cash equivalents now consists of a small number of Alibaba shares.”

The “small sum” was valued at $ 37.5 million as of March 31. The Daily Journal could have bought the ADRs from Alibaba at any time during the first quarter. So far this year, ADRs are down 4%, while

S&P 500

the index is up about 9.9%.

Alibaba’s ADRs underperformed the market last year, gaining just 9.7% while the index rose 16.3%. ADRs fell in December when a subsidiary was forced by Chinese regulators to reject an initial public offering. Barron’s wrote about a number of risks associated with investing in China.

The Daily Journal also owns other shares, and holdings traded in the United States were approximately $ 200 million as of March 31. The positions in other investments remained unchanged and the largest investments in dollar value remained

Bank of America

((BA) C) shares of 2.3 million shares, and

Wells fargo

(WFC) of 1.6 million shares; The Daily Journal’s positions on these two bank stocks have remained unchanged since the end of 2013. The company was due to start disclosing its investment positions at that time because the US-traded portfolio exceeded the $ 100 million threshold. of dollars.

Warren Buffett
recently monitored transactions at both banks through the Berkshire Hathwayway wallet. Berkshire Hathaway is Bank of America’s largest investor, with more than a billion shares after Buffett bought last year. Berkshire Hathaway has also reduced its investment in Wells Fargo. We estimate that reducing Wells Fargo’s position, and that of other bank stocks, cost Berkshire Hathaway around $ 10 billion as the industry subsequently recovered.

Berkshire Hathaway also does not have an Alibaba ADR.

Inside Scoop is a common Barron feature that covers the stock trading of business leaders and board members – known as insiders – as well as major shareholders, politicians and other personalities. Because of their insider status, these investors are required to publish shares with the Securities and Exchange Commission or other regulatory groups.

Write to Ed Lin at [email protected] and follow @BarronsEdLin.

Warren Buffett – Charlie Munger, partner of Warren Buffett, prefers Alibaba stocks to T-bills

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