Billionaire hedge fund founder David Tepper said one of his big bets after the Federal Reserve cuts interest rates is to buy Chinese stocks. “I thought what the Fed did last week was going to lead to China easing monetary policy, but I didn’t know that they were going to pull out the big guns like they did before,” Tepper told CNBC’s “Squawk Box” on Thursday. “I think it’s a radical change. “We’re getting a little bit longer and a lot more exposure to Chinese stocks,” Tepper continued. “So, I have limits, historical limits. I probably said a long time ago that I wouldn’t go above 10% or 15%. Well, that may not be true anymore.” In fact, Appaloosa Management The founder of Appaloosa Management said he may have doubled his limits on Chinese stocks and said he bought more of “everything” stocks such as big tech giant Alibaba after the U.S. lowered interest rates earlier this month Baba and Baidu. “That’s what it’s all about. Now, I’d like to see a pullback, okay,” he said. “I’m going to have another newfound limit, okay, in the pullback.” Tepper told Chinese markets this month that China’s President Xi Jinping and other top leaders affirmed the government’s efforts to stimulate the economy, state media said Thursday afternoon. Become more optimistic. The move comes after China announced interest rate cuts and other measures to support the property market earlier this week. “They’re promising to do more and more. OK? That’s very strange language, especially for any central banker, especially one out there,” Tepper said. “Last night, you know, we heard they were going to have some kind of meeting, but they were kind of defying expectations for fiscal stimulus.” FXI 1D mountain iShares China Large Cap ETF following Tepper’s comments The iShares China Large Cap ETF (FXI) rose 6.8% in pre-market trading, extending gains driven by gains in China and Hong Kong stocks. Tepper also pointed out that the Chinese market is cheaper than U.S. stocks. “The large-cap stocks trading here are trading at double-digit P/E growth rates,” Tepper said. “That’s different than the S&P 20-plus.” As part of his China strategy, Tepper said he would acquire Wynn Resorts and Las Vegas Sands. Casino stocks rose more than 6% and 7% respectively. To be sure, rising geopolitical concerns, including further tariffs between the United States and China, have scared many investors away from the Chinese market. Tepper, however, dismissed those risks. “My counter-bet is that I don’t care,” he said.
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