Michael Burry’s Big Bets

Good Evening,

Welcome to another edition of ChartWiz, where we visualize financial data in bite-sized portions. Today's edition dives into Michael Burry's latest holdings as he doubles down on Alibaba (BABA).

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And with that, welcome to ChartWiz!

MICHAEL BURRY - MUSICAL CHAIRS WITH PORTFOLIO SHUFFLE

In his most recent quarterly update, Michael Burry revealed that he had pared down his portfolio from 25 positions to 16, yet the total value of his holdings increased from $95 million to $103 million. Among the eleven holdings that survived the cut, Burry significantly increased his stakes in companies such as Alibaba, JD.com, and Star Bulk Carriers. Notably, his Alibaba stake rose from 75,000 to 125,000 shares.

Burry also introduced five new positions to his portfolio, including Baidu, BP, First Solar, Sprott Physical Gold Trust, and Cigna. At the same time, he offloaded several stocks, including Amazon, Alphabet, MGM Resorts, Toast, and Warner Bros. Interestingly, his latest update did not feature any put options, a strategy he has previously employed on major indexes and notable stocks. Burry continues to be a voice of caution in the market, known for his warnings about speculative bubbles and economic downturns.

Latest Holdings (Top 15)

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ALIBABA VS AMAZON - FUNDAMENTAL COMPARISON

In the vast digital marketplace, Alibaba is often dubbed the "Amazon of China"—and for good reason. Here are some striking similarities between these two giants:

E-commerce Platforms:

• Alibaba: Taobao and Tmall

• Amazon: Amazon.com

Cloud Services:

• Alibaba: Cloud Intelligence Group

• Amazon: AWS

Logistics:

• Alibaba: Cainiao Smart Logistics Network

• Amazon: Amazon Fulfillment Centers

Digital Media:

• Alibaba: Digital Media and Entertainment Group

• Amazon: Prime Video, Amazon Studios

Local Services:

• Alibaba: Local Services Group

• Amazon: Whole Foods, Amazon Fresh

So, if you're ever confused, just think of Alibaba as Amazon with a Mandarin twist. After all, imitation is the sincerest form of flattery, right?

AMZN - HOW THEY MAKE MONEY

Revenue Segments

1. North America ($86.34B): This includes sales from Amazon's operations in the United States, Canada, and Mexico. The revenue is generated from the sale of products and services, including subscriptions, advertising, and third-party seller services.

2. International ($31.93B): This segment covers Amazon's operations outside North America, including Europe, Asia, and other international markets. Revenue is derived from the same categories as in North America, but adjusted for different market dynamics and exchange rates.

3. AWS ($25.04B): Amazon Web Services (AWS) is Amazon's cloud computing segment. Revenue comes from a variety of cloud services, including computing power, storage, and database management. AWS is a significant driver of Amazon's profitability due to its high margins.

BABA - HOW THEY MAKE MONEY

Revenue Segments

1. Taobao and Tmall Group ($12.91B): This includes revenue from Alibaba's leading e-commerce platforms in China, Taobao (C2C) and Tmall (B2C). These platforms generate revenue through online retail sales, advertising, and other services.

2. Cloud Intelligence Group ($3.54B): This segment includes Alibaba Cloud, which provides a wide range of cloud computing services, such as computing power, storage, and data processing.

3. Alibaba International Digital Commerce Group ($3.8B): This encompasses Alibaba's international e-commerce operations, such as AliExpress, Lazada, and Trendyol, focusing on global retail and wholesale commerce.

4. Cainiao Smart Logistics Network ($3.4B): This is Alibaba's logistics arm, providing warehousing, transportation, and delivery solutions, ensuring efficient logistics for e-commerce.

5. Local Services Group ($2.03B): This segment includes Alibaba's local consumer services, such as Ele.me (food delivery) and Koubei (local commerce platform), catering to local markets and on-demand services.

6. Digital Media and Entertainment Group ($685M): This includes Alibaba's digital media and entertainment businesses, such as Youku (video streaming) and Alibaba Pictures, generating revenue from content production and distribution.

HISTORICAL RETURN

How $10,000 Invested in Amazon (AMZN) and Alibaba (BABA) Would Have Returned In The Last 10 Years

Investing $10,000 in Amazon (AMZN) a decade ago would have turned into an impressive $125,136 today. On the flip side, the same investment in Alibaba (BABA) would have dwindled to $9,430. While Amazon's relentless growth and market dominance skyrocketed its stock, Alibaba's journey has been a bumpy ride.

Investing in Chinese holdings like Alibaba comes with its unique set of risks. Political pressures and regulatory crackdowns can significantly impact Chinese companies. For instance, Alibaba has faced intense scrutiny and regulatory hurdles from the Chinese government, affecting its business operations and investor confidence. The unpredictability of government policies, coupled with geopolitical tensions, adds layers of uncertainty for investors.

Moreover, China's unique market dynamics and the government's interventionist approach can lead to sudden and drastic changes. Issues like corporate governance, transparency, and differences in accounting standards further complicate the investment landscape. Therefore, while Alibaba's potential as the "Amazon of China" is significant, the risks associated with political pressures and market unknowns make investing in Chinese holdings a much more cautious endeavor.

WORD FROM WIZ

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-Wiz

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