Warren Buffett and Charlie Munger. SCOTT MORGAN/REUTERS
Charlie Munger's Daily Journal raised its Alibaba stake by 83% in the last quarter.
Warren Buffett's business associate was the first to invest in the Chinese ecommerce group.
Due to regulatory pressures, Alibaba's shares on the US stock exchange have fallen by nearly 40% this year.
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Warren Buffett advised investors to be greedy even when others are afraid. Charlie Munger demonstrated this approach by double-dipping in Alibaba stock last quarter, while others rushed to get out.
Munger is most well-known as Buffett's business partner, and Berkshire Hathaway vice-chairman. The 97-year old Munger has been the chairman of Daily Journal since 1977 and oversees the investment portfolio.
According to Securities and Exchange Commission filings, Daily Journal increased its Alibaba stake by 83%, to more than 300,000. Shares in the third quarter. It added a position to the Chinese ecommerce group in its first quarter of the year. This was the first addition to the US stock portfolio it has made since the beginning of 2013 when it started disclosing its holdings.
Based on the stock's average closing prices, Munger invested $40 million in Alibaba in the first quarter. Due to China's crackdown against technology companies, Alibaba's shares on the US stock exchange have fallen almost 40% this year. Daily Journal's increased stake in the stock was worth $45 million at September's end.
Daily Journal had nine stocks as of June 30, 2013, worth a total $350 million and a $80million cost base. It owned four of them - Bank of America and Wells Fargo as well as US Bancorp and South Korean steelmaker Posco. The portfolio was valued at $151 million at that time at $151 million.
Throughout his career, Munger has mainly invested in American companies like Costco and Coca-Cola. This makes his bet on Alibaba quite surprising. He did however bring BYD to Buffett's notice, and Berkshire invested $230 million in the Chinese electric-vehicle manufacturer in 2008. Since then, the stake in the conglomerate has risen 300% to $7 billion.
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