Michael Puri made a name for himself by properly predicting and profit from the 2008 sub -mortgage crisis, as he was immortalized in the popular animated image.The big short‘
Since then, the smart investor put his attention in the foreign markets – China, accurately.
Alibaba Stock (NYSE: BABA) has been the largest contract for the hedge box, Scion Asset Management, for a long time now. In the latest 13-f fileBABA shares represent about 16 % of Michael Burry.
Chinese e -commerce and giant technology have been on a roll recently. However, President Trump’s tariff on April 2 had a key to business. Due to an additional 34 % duty on Chinese goods, the People’s Republic is fully expected, in retaliation with a 34 % tariff delegated to American goods.
On April 3, Alibaba shares were closed at $ 129.33. After this announcement, Baba shares price fell to $ 116.42 as of the time of the press on April 4. However, the transition by -9.99 % to the negative side, the largest shares in Burry still rises by 37.30 % on the basis of a year (YTD).
Why Michael Puri’s biggest position at risk of correction
Since the customs tariff increases the cost of goods, e -commerce works in alibaba may be slowing down or even low demand to move forward. In addition, Beijing’s response, which is inevitable as it was, is another starting point for a complete commercial war, which is likely to have a negative impact on consumer spending in both countries.
Since it is from the shares of Baba, American deposit receipts, the price depends on the original list of the arrow, resistance in Renminbi/Yuan. Therefore, currency exchange rates also play a worker in the stock price, at least in the form that American investors traded. The trade war can easily cause major changes in the exchange rate, providing another risk factor for the largest reservation in Michael Buri to move forward.
Finally, not another, the increasing periods of trade tension between the United States and the People’s Republic of China tend to achieve an increase in the scrutiny targeting Chinese companies operating in the United States. This, in turn, tends to lead to a sale, as investors hesitate to maintain exposure to shares facing policy risks.
Distinctive image via Shutterstock
