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'China is Uninvestable,' Says Renowned Bond Investor Gundlach

Jeffrey Gundlach says he has never invested in China. 'I think that investments in China could be confiscated,' he said.
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Stay away from putting money in China, says legendary bond investor Jeffrey Gundlach, founder of DoubleLine investment firm.

"China is uninvestible, in my opinion, at this point," he told Yahoo Finance.

"I've never invested in China long or short. Why is that? I don't trust the data. I don't trust the relationship between the United States and China anymore. I think that investments in China could be confiscated. I think there's a risk of that."

Last year, China punished big Chinese technology companies with overseas listings, such as online retail titan Alibaba  (BABA) - Get Alibaba Group Holding Ltd. Report. That company’s stock has plunged 45% in the last 12 months.

The government’s criticism prompted ride-hailing giant Didi  (DIDI) - Get DiDi Global Inc. Report, which went public in June on the NYSE, to decide on a delisting from that exchange planned for this year. Didi shares have tanked 64% since its initial public offering.

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The Shanghai Composite Index of Chinese stocks has gained only 1.25% for the past 12 months, compared to 29% for the S&P 500 index.

Alibaba recently traded at $125.25, up 5%.

Morningstar analyst Chelsey Tam has mixed views on the company, putting fair value at $188.

“Alibaba still needs to be able to identify and meet the fast-changing consumer demands quickly, offering affordable products and services to consumers in less developed areas,” she wrote last month.

“We think Alibaba’s execution in meeting these demands is not solid. It is also worth noting that Pinduoduo and Douyin, the two platforms challenging Alibaba the most in the past few years, have one common characteristic that Alibaba does not have — access to strong traffic at lower customer acquisition costs.

“However, it appears Alibaba is working hard to combat these challenges.”