Value investor Guy Spier names two stocks that give him a foothold in China

Published Wed, Nov 10 202110:45 PM EST

Value investor Guy Spier told CNBC Pro that he last bought two stocks — and both were related to China and technology. The two stocks are Chinese technology giant Alibaba and Prosus, a Dutch investment company with a stake in another large Chinese tech firm Tencent . "I've been very fearful of China and I've come to take a more nuanced view," Spier, chief executive of Zurich-based Aquamarine Capital, said during CNBC's Pro Talks with Tanvir Gill on Wednesday. The investor said risks around tightening regulations in China could be overstated. He explained that much of Beijing's moves were about stabilizing the country and allowing the economy to grow in a more productive way. Spier — who set up his firm after being inspired by legendary billionaire Warren Buffet's investment strategy — said one reason why he likes having exposure to Alibaba and Tencent is the sheer size of the companies. "They are so large, and they are so central ... that it's extraordinarily difficult to displace them. And to the extent that they are displaced, it will happen slowly over time — giving me plenty of opportunity to gradually reduce my position," said the investor. Beijing has clamped down heavily on Chinese internet companies in recent months — reining in monopolistic business practices as well as regulating the use and collection of data in a widespread crackdown. Shares of Alibaba and Tencent in Hong Kong have fallen 30.7% and 14.3%, respectively, this year as of Thursday's close. Still, Spier said he's not recommending investors "take a plunge" into any Chinese tech stock. "I'm not asking anybody to take a plunge into any of these companies with 100% of their portfolio, and also not to do 1% which would not be meaningful," he said. "And I would tell you that for me, meaningful is 3% to 5%," he added. Increasingly, growth and increases in a portfolio's value will depend on investments in emerging businesses in the new economy sector, said Spier. The traditional value investing method of buying companies that trade below their book value, or those at low price-to-earnings ratios won't be enough for 2022 and beyond, he added. "The world is moving too quickly, and the accounting is too slow to capture it."