Alibaba Group Holding (BABA)

Not expensive at 14x. Being broken up into 6 different businesses. Issue for him is that when the Chinese government tells you to do something, you do it. This makes running a business difficult. Better off buying a global company with a Chinese presence.

He doesn't own Chinese stocks. Yes, he wants to invest in China, a massive market, but there's political interference and risk. He prefers multinationals that derive revenue from China, like Unilever.

As China phases out its Covid policy and rapidly returns to normal, Alibaba has climbed, but it’s been a rocky ride. Year-to-date through mid-April, BABA has risen 9%, but soared 36% in January alone as shares passed $120. On March 20, they sank to $81 and in mid-April is bouncing between $95-100. To compare, Amazon has rallied 20% YTD with far less volatility. (Curiously, BABA’s beta is 0.63.) Read China reopens for our full analysis.

No. It's very alluring, well run, very good growth rate, attractive price. Way too much state intervention. You need a very big margin of safety to wade into any big name that's important to the Chinese system.

Today, announced it will split into 6 companies

China is focused on industries that create jobs and have ancillary industries. Tech, though, doesn't create as much employment as, say trains and biotech. This move could unlock some value, but the Chinese government will rather support the semis companies which is a better investment there.

He feels that investing outside North America is taking a big risk. The stock may be great but he is not sure about the rules of governance. China needs a reliable legal system.