8/12/15
In the face of all of the fear and confusion surrounding China’s sharp stock market decline in June, and the recent moves by its central bank to weaken the Chinese currency, one billionaire has been using the opportunity to load up on Chinese stocks.
His name is Chase Coleman. He runs Tiger Global, a hedge fund that was seeded by billionaire Julian Robertson.
Few have had the performance over the past fifteen years that can compare to Coleman’s. According to an investor letter from Tiger Global, his hedge fund has returned 21% annualized on long positions since 2001. That compares to a 4.5% annualized return for the S&P 500. This run has made Coleman a billionaire before the age of 40.
Not only does Coleman have more than 20% of his hedge fund invested in Chinese companies, but he has been aggressively building those big stakes over the past two months as China’s stock market slid.
At Billionairesportfolio.com, our strategy is rooted in following the moves of the world’s best billionaire investors. This strategy can be even more powerful when we are able to “buy the billionaire on a dip.” In all of five of the stocks listed below, we can follow the wunderkind billionaire hedge funder, Chase Coleman’s lead, into his plays on China. In three of the stocks, we can buy them cheaper than the price Coleman paid for his shares.
1) JD.Com (JD)- JD.com is currently Chase Coleman’s biggest position in his hedge fund, making up nearly 7% of the fund. This stock has been slammed recently, which offers an attractive entry point into one of the fastest growing e-commerce stocks in China.
2) Alibaba (BABA) – Coleman has 6% of his hedge fund invested in Alibaba. Alibaba was hit hard on a weaker earnings report today, but is a dominant company in China, with huge potential growth. Baba shares are 40% off of the highs of just nine months ago, and trading cheaper than where Coleman bought his shares.
3) Vipshop Holding (VIPS) – This is Coleman’s third largest position in China and he is down on his investment. VIPS also happens to be one of billionaire hedge fund manager John Burbank’s top positions at his fund Passport Capital. VIPS has been a highly volatile stock, going from $19 to $30 this year and back to $19 today.
4) 58.com (WUBA)- In recent weeks, while the rest of the world was panicking about China’s stock market volatility, Chase Coleman added to his positon of the Chinese internet company, 58.com, and now owns more than 6.3% of the company. WUBA sold for $83 just months ago, and now trades at $51, offering huge upside if the stock bottoms here.
5) eHi Car Services (EHIC)- In June, Coleman and Tiger Global initiated a brand new position, (21.5% ownership) in EHIC, the “Uber of China.” He is now down on this position, so you are able to buy eHi at a cheaper price than one of the best hedge fund managers on the planet.
Billionairesportfolio.com, run by two veterans of the hedge fund industry, helps self-directed investors invest alongside the world’s best billionaire investors. By selecting the best ideas from the best billionaire investors and hedge funds, our exited stock investment recommendations have averaged a 27% gain since 2012.
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8/11/15
Overnight, China openly devalued its currency. And it may be only the first step in a return to the “weak currency” policies that catapulted its economy to one of the biggest in the world. Such a policy reversal would have huge implications for Chinese stocks, and the geopolitical landscape.
China has slowly and modestly appreciated its currency (vis a vis the dollar) over the past decade, in compliance with the pressures from major trading partners and global economic leaders (namely the U.S.). As a result, China’s economy has slowed, its exports have fallen in competitiveness and Chinese leadership is under pressure.
Additionally, since late 2012, Japan has delivered a massive blow to China through its outright devaluation of the Japanese yen. Japanese goods have become 40% cheaper than Chinese goods, on a relative currency basis, since Japan first telegraphed its massive QE and yen devaluation plans. Japanese growth in exports have nearly doubled that of China over the past three years.
With that, it’s no surprise that China is beginning to fight back.
Longer term, a return to weaker currency, in an effort to reclaim its global export dominance, would create major political turbulence with its leading trading partners. But short term, it could give China’s economy and its stock market a huge shot in the arm.
At BillionairesPortfolio.com, we like to follow the lead of billionaire investors that have large stakes in companies and, as such, the ability to influence outcomes.
Below are five U.S. exchange traded Chinese stocks, each owned by top U.S. billionaire investors:
1) eHI Car Services (EHIC) – Billionaire Chase Coleman of Tiger Global recently initiated a 21.5% stake in EHIC in June. eHi Car is considered the “Uber” of China. The stock hit a high of $19 this year and currently trades at $11.45. A return to its 2015 highs from here would mean a 65% return.
2) JD.Com (JD) – Billionaire Steven Mandel, who runs the hedge fund Lone Pine Capital, owns nearly 3% of JD.com, or almost $900 million worth. JD.com has been called the “Ebay” of China.
3) Alibaba (BABA) – Alibaba is a billionaire hedge fund hotel. Billionaires’ Julian Robertson, Chase Coleman and George Soros all own Alibaba. BABA is billionaire Julian Robertson’s second largest position. The stock’s 52-week high is $120 or 53% higher than its share price today. Alibaba reports its highly anticipated earnings on Wednesday, August 12th.
4) Baidu (BIDU) – Baidu is another stock that is a Billionaire hedge fund hotel. Billionaires Stephen Mandel, Julian Robertson and George Soros all own Baidu. Baidu sold as high as $251.99 over the past year — about 50% higher than current levels.
5) iShares China Large Cap ETF (FXI) – Billionaire Louis Bacon who runs the top performing global macro hedge fund, Moore Capital, recently added to his nearly $200 million position in FXI. The exchange traded fund, FXI, is one of the most liquid and diverse ways to get exposure to Chinese stocks.
Billionairesportfolio.com, run by two veterans of the hedge fund industry, helps self-directed investors invest alongside the world’s best billionaire investors. By selecting the best ideas from the best billionaire investors and hedge funds, our exited stock investment recommendations have averaged a 27% gain since 2012.
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