China Becomes More Difficult for Foreign Investors

Recent Sells                      January 19, 2022

Investment Thesis

China has implemented policies to reverse some of the free-market policies that allowed China’s economy to flourish in the last decade. Additionally, increased assertiveness by the Chinese Communist Party (CPC) leading to a potential faceoff over Taiwan and the South China Sea have led us to sell our investments in the Chinese companies Alibaba (BABA) and Baidu (BIDU). We miscalculated the risks with regards to these two fast growing Chinese Variable Interest Entities (VIEs). The past year resulted in us giving back all of our profits in these two positions.