Charlie Munger’s Investment in Alibaba

I am quoted in Real Money (TheStreet) on Charlie Munger’s investment in Alibaba:

David Kass, Clinical Professor of Finance at University of Maryland, suggested his conviction may be solidified by the input of a few trusted advisors that are very attuned to the tech space in China specifically.

“He relies heavily on the advice of his friend, [Himalaya Capital Management founder] Li Lu, who is very knowledgeable about the best investments in China,” he told Real Money. “Munger would not have made this investment without the approval of Li Lu.”

The assumption herein also relies upon the government easing up on its regulatory rampage. While moral hazard concerns make the real estate issues more problematic, the punishment for the tech names specifically might be coming to a close. Therefore, a key overhang that has saddled Alibaba stock amidst its current slide may finally be fading away.

Kass added that while Munger is nearing a century on this Earth, his investment style has always favored a long-term approach. Indeed, among his many golden nuggets of investing advice, patience is a recurring theme.

“Waiting helps you as an investor and a lot of people just can’t stand to wait,” Munger is famously quoted as saying. “If you didn’t get the deferred-gratification gene, you’ve got to work very hard to overcome that.”