David Tepper China Stocks Loaded Up

David Tepper, a well-known hedge fund manager, has made significant investments in China stocks. He has been loading up on Chinese stocks, which is a notable trend in his investment strategy.

Tepper's hedge fund, Appaloosa Management, has a history of making savvy investments in emerging markets. China's growing economy and large consumer market make it an attractive destination for investors like Tepper.

Tepper's focus on China is not surprising, given the country's rapid economic growth and increasing global influence.

David Tepper's investment strategy is centered around buying undervalued Chinese equities. He recommends buying "everything" related to China, citing higher-quality companies and valuations.

Tepper's biggest holding is Alibaba, with up to 10.5 million shares worth roughly $1.1 billion at today's price. This is a significant deviation from his usual portfolio, which has been in United States technology names like Amazon and Microsoft.

Tepper's decision to go long China is driven by the fact that the stock market yields more in dividends than the country's ten-year government bond. This divergence typically leads to an equity buying spree, which is currently the case in China.

The Chinese ten-year bond yields about 2.2% today, while the stock market had yielded a high of 4% before the recent spike in prices. The dividend yield on the iShares China ETF is still 2.3% and above the ten-year yield, suggesting there is still more upside to be had.

Tepper is not alone in his view, as others on Wall Street also suggest that China has more room to run. Alibaba and Baidu are preferred for allocation, according to these analysts.

David Tepper has made significant investments in China, citing recent economic stimulus and encouraging comments on CNBC. He has gone over his usual limits, buying more shares after the PBOC announcements and even more overnight today on the fiscal announcements.

Tepper believes the stimulus has implications for bonds, currencies, and stocks, and thinks there's a whole shift happening in China's economy. He's so bullish on China that he recommends buying "everything" related to the country, including ETFs and futures.

At today's price, Tepper's investment in Alibaba alone is worth roughly $1.1 billion, making it his biggest holding. This deviation into Chinese technology is significant, especially considering most of his portfolio has been in US technology names.

The Chinese ten-year bond yields about 2.2%, while the stock market had yielded a high of 4% before the recent spike in prices. This divergence has led to a rally in the iShares China ETF and the KraneShares CSI China Internet ETF (NYSE: KWEB), with a dividend yield of 2.3% and above the ten-year yield.

Tepper's conviction comes at a time when China's government is pulling out all the stops to revive its economy, including interest-rate cuts, liquidity injections, and stock buybacks. This "internal stimulus" creates a unique environment where undervalued Chinese equities can soar, regardless of external pressures like potential US tariffs.

Here's an interesting read: China Us Treasuries