On February 17, Charlie Munger, the 98-year-old vice chairman of Berkshire Hathaway, participated in the Daily Journal annual meeting to address several questions about why he increased his stake in Alibaba, how to judge the current economic environment in China and so forth. Munger claimed that the investment opportunities in China are still worth taking seriously.
Munger said China is a very modern country with a large population and great development in the past 30 years. He also highlighted three primary reasons to invest in China: Reasonable economic growth, Competitive enterprises, and Low valuations.
“We invest a lot in Chinese companies because we can get higher returns. Some Chinese companies have higher intrinsic values than their American counterparts. Every dollar invested in China is better.” The companies they invest in are more valuable than their competitors, but the prices are lower, Munger said.
He also called US-China tensions “massively stupid” and urged Washington and Beijing to reconcile.
Munger’s Daily Journal has been adding to its Alibaba holdings since the first quarter of 2021. Daily Journal nearly doubled its holding in the fourth quarter of 2021. Munger believes the investment in Alibaba makes sense and that “at least for now, buying Alibaba is not as risky as it seems.”
Apart from these, Munger is still dismissive about cryptocurrency. Munger strongly supports an immediate ban on cryptocurrencies and admires China’s prohibition on them. He thought that people adopted cryptocurrencies only for the purpose of using them in illegal activities such as extortion, abduction, and tax avoidance.