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Charlie Munger’s Firm Doubles Down on Alibaba Investment. Again.

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Charlie Munger
Johannes Eisele/AFP via Getty Images

Charlie Munger’s other firm has doubled down on an investment in Alibaba Group Holding for the second consecutive quarter.

Munger is probably best known as the vice chairman of Berkshire Hathaway (ticker: BRKb). However, he also serves as the chairman of Daily Journal (DJCO), and provides that firm with investing expertise. Daily Journal publishes newspapers and websites covering California and Arizona, and produces information services; it also owns large stakes in stock, with a portfolio valued at $259 million as of Dec. 31.

Daily Journal disclosed in a form it filed with the Securities and Exchange Commission that it ended 2021 with 602,060 Alibaba (ticker: BABA) American depositary receipts. That means it bought a net 300,000 ADRs of the embattled Chinese online giant in the fourth quarter, as Daily Journal had owned 302,060 Alibaba ADRs at the end of September.

Munger declined to comment on the larger Alibaba position. Daily Journal had bought 136,740 more ADRs in the third quarter, after initiating a position of 165,320 ADRs in the first quarter. Munger compared Alibaba ADRs favorably to Treasury bills for the initial investment.Alibaba ADRs fell 20% in the fourth quarter, and ended the year down 49%. For comparison, the S&P 500 index rose 10.6% in the fourth quarter to end 2021 with a 27% gain.

Alibaba closed Tuesday at $119.56 share, down 0.7%. Daily Journal’s current position is worth nearly $72 million.

We’ve been telling readers to be wary of Alibaba ADRs as the company, and Chinese peers, continue to face uncertainty regarding stock delistings, geopolitical tensions and China’s regulatory crackdowns.

Daily Journal didn’t make changes in other investments. It continues to own 2.3 million Bank of America ( BAC ) shares, and 1.6 million Wells Fargo ( WFC ) shares.

Inside Scoop is a regular Barron’s feature covering stock transactions by corporate executives and board members—so-called insiders—as well as large shareholders, politicians, and other prominent figures. Due to their insider status, these investors are required to disclose stock trades with the Securities and Exchange Commission or other regulatory groups.

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

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