Charlie Munger's Daily Journal halved its Alibaba stake last quarter — after nearly quadrupling the position last year

• Charlie Munger's Daily Journal halved its Alibaba stake to 300,000 shares last quarter.
• The newspaper publisher nearly quadrupled its Alibaba holdings during the second half of 2021.

Charlie Munger's Daily Journal apparently cut its losses on Alibaba last quarter, halving its stake after quadrupling the size of its wager in the second half of 2021, a regulatory filing revealed on Monday.

Munger is best known as Warren Buffett's business partner and the vice-chairman of Berkshire Hathaway. However, the 98-year-old also served as Daily Journal's chairman for 45 years before stepping down last month. He continues to oversee the newspaper publisher and legal-software supplier's investment portfolio.

Daily Journal originally purchased 165,000 American Depositary Shares (ADS) of Alibaba in the first quarter of 2021. It boosted that bet by 83% to around 302,000 shares in the third quarter, then roughly doubled it to 602,000 shares in the fourth quarter. Meanwhile, Alibaba stock price halved over the course of last year to below $120.

Munger and his team reversed course last quarter, slashing their Alibaba holdings to 300,000 shares as of March 31. The Chinese e-commerce company's stock has slumped another 15% this year.

Alibaba shares were hammered last year by Chinese regulators tightening restrictions on their country's largest technology companies. This year, they've been caught up in a wider sell-off of higher-risk technology stocks, fueled by worries about rising interest rates, and the Russia-Ukraine conflict choking global economic growth and escalating tensions between the US and China.

It's possible Daily Journal switched out its ADS for Hong Kong-listed shares of Alibaba, as its quarterly portfolio updates exclude non-US holdings. The company's first-quarter earnings report, due mid-May, should provide more insight into the publisher's buying and selling of securities last quarter.

Munger's ostensible about-turn on Alibaba follows Daily Journal's sale of $50 million of stocks in December, and borrowing of $37 million from its margin-loan account, to invest primarily in overseas securities in the fourth quarter.

Daily Journal's portfolio of five US-listed stocks was worth $213 million at the end of March, including a $95 million stake in Bank of America and a $77 million stake in Wells Fargo. It reported a total of seven holdings at the end of September, suggesting it owns two foreign-listed stocks, one of which is probably Munger's beloved BYD.