‘Big Short’ investor Michael Burry bet half of his portfolio on Chinese stocks. It’s finally starting to pay off.

• Popular “big short” investor Michael Burry is cashing in on the recent rally in Chinese stocks.

• Burry’s Scion Asset Management invests nearly half of its portfolio in Chinese technology giants such as Alibaba.

• China’s recent stimulus measures, including interest rate cuts, led to higher stock gains.

the Chinese stocks rise this week That should be music to the ears of hedge fund manager Michael Burry of “The Big Short” fame.

Puri began aggressively buying Chinese stocks in the last quarter of 2022, and it appears that is finally starting to pay off.

According to 13F filings, Burry’s Scion Asset Management, which manages about $200 million, invests about half of its portfolio in Chinese tech giants.

He devoured the mullet Alibaba In his largest position at 21% of the portfolio, he was still buying the stock in the second quarter, boosting his stake by 24%.

Perry also invests 12% of his portfolio Baidu, He invested another 12% of his portfolio JD.com. In total, Perry had about 46% of his portfolio invested in the three Chinese stocks as of June 30.

All three stocks rose this week after that China is getting serious about announcing its stimulus plans To revive its faltering economy.

The People’s Bank of China announced major interest rate cuts, reduced banks’ reserve requirements to stimulate lending, and said it plans to support liquidity for the stock market.

The state also encouraged its companies to start buying back shares.

All these measures and dovish talk by policymakers led to a massive rally in the Chinese stock market this week.

the iShares MSCI China ETF It’s up 18% so far this week. Meanwhile, shares of Alibaba, Baidu and JD.com are up 19%, 18% and 32% so far this week, respectively.

According to data from HedgeFollow, which tracks and aggregates data from 13F filings, the recent gains in the Chinese stock market should mean Perry is also seeing some big gains in his portfolio, with Alibaba leading the charge.

HedgeFollow estimates Burry has an average cost per share of $78.83 for his Alibaba stake. Alibaba shares hit $105.25 in Thursday afternoon trading, representing an estimated gain of 34%.

This assumes Burry hasn’t sold any shares since Scion’s last 13F filing, which provides data as of June 30.

Perry isn’t the only hedge fund manager making money from the recent rise in the Chinese stock market.

Billionaire investor David Tepper said Thursday It’s a ‘buy everything’ moment for Chinese stocks.

Like Perry, Tepper counts Alibaba as his hedge fund’s largest position, making up about 12% of his $6.2 billion Appaloosa fund. Tepper believes there is more upside in Chinese stocks due to their low valuations.

The story continues

“Even with the recent moves, they appear to be at a steady low level compared to where they have been in the past. And you’re sitting there with multiple individual investors, with double-digit growth rates for the large-cap stocks that are trading here,” Tepper said. He said in an interview with CNBC Thursday.

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