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- Manlobbi
Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A) ❤
No. of Recommendations: 11
I posted this elsewhere but here is an update on BHE's continued selling of BYD shares (HK:1211). At the final required disclosure from Hong Kong, BHE owned 54.2m shares on 7/16. Looking at BHE's 10Q it appears they owned about 22.66m shares on 9/30. Obviously we know they used the cash to repurchase BHE shares from Scott estate owners and repay their $600m promissory note. I wouldn't be surprised if the BYD ownership is near zero by now since the share price was ramping higher into quarter end. I guess we'll find out in the 10-K.
22.66m HK:1211 shares were worth about $825m on 9/30
No. of Recommendations: 2
22.66m HK:1211 shares were worth about $825m on 9/30
I think you are spot on; pretty sure BYD is gone from BHE portfolio during October. Berkshire 10-Q stated that they paid off the $600mm promissory note early in October 2024, which lends even more credence to the theory that BYD was sold completely and after-tax proceeds of that sale were used to pay off the Scott estate.
No. of Recommendations: 23
Interesting & Great sleuthing. Whenever I see BYD, I think Charlie! Once again, he hit a home run when even Warren & a lot of us were skeptical on the Chinese investment at the time. What did we make $8B or something on a $250M BYD investment over 16 years?! Amazing!
Fortunately, I think of (and miss) Charlie every day, as I am sure so many here do.
No. of Recommendations: 1
I think of (and miss) Charlie every day, as I am sure so many here do.
+1, I too love and miss Charlie!
But on BYD, I am with Warren & I too never understood it. Even Charlie admitted that they warned Wang Chuan-Fu not to get into car business.
No. of Recommendations: 12
Even Charlie admitted that they warned Wang Chuan-Fu not to get into car business.
Look on the bright side. He didn't start an airline.
Jim
No. of Recommendations: 1
Look on the bright side. He didn't start an airline.
LOL 😃
No. of Recommendations: 6
Count me among the confused on selling BYD. Must the money come from within BHE?
BYD seem to having become the leading supplier of superior EV vehicles in China - the largest EV market. And also including very high milage hybrid vehicles. The USA would apparently be on their ass as competitors unless for import duties if their products were competing.
They have circa 10X engineers working on technology more than the USA. Smart, well trained people.**
Munger has described their CEO as a genius,
What do we know that Buffet knows?? Is it China risk - who Munger seemed to seem overrated And his advisor?
I really want to hear what Paul Harvey used to describe as the "rest of the story."
**
On a separate topic, Andrew Marshall - strategic defense planning advisor to Presidents from Nixon to Obama - described in 1995 the type of warfare that is occurring now in the Ukraine - and the Middle East. The US downgraded his office after he retired, The Chinese seem to have adopted his projections and patterned their military thereafter. I'm describing warfare where the offence who can identify the enemy first, can destroy them first by precision weapons. Basically the country with the best first info wins. They can also deny territory from the enemy by area defense, area denial - e.g. the South China sea. Can our aircraft carriers still operate in the South China sea?
How deeply are we thinking on China? Should we be cutting economic ties?
Just asking.
No. of Recommendations: 10
<<How deeply are we thinking on China?>>
Tex, I think you answered your question with this question. Buffett just a few days ago addressed his stockpiling of cash with comments about high domestic equity valuations amidst the “international situation”.
China, we know, was a source of major disagreement between Buffett and Munger. I also believe there are other issues related to the fragility and interconnectness of global finance and economies today. We speculate a lot about Post Buffett Berkshire. We may be looking at something nearly as significant: Post Munger Berkshire.
No. of Recommendations: 4
Post Munger Berkshire does seem like a thing maybe...
Charlie:
Never sell Apple.
Invest were the fish are - China big tec.
Buy BYD, in China and not our usual type of venture, betting on the future and the jockey.
There is too much tinkering at Berkshire.
Warren:
Sell a lot of Apple.
Sell BYD.
Buy Chinese big tech - I don't think so. Even sold Taiwan Semiconductor.
In and out of Cheveron tinkering.
They also disagreed on how far the US could put it's deficit. I think Charlie thought it could go on longer without blowing up than Warren - but not sure.
No. of Recommendations: 17
We may be looking at something nearly as significant: Post Munger Berkshire.
So far, I'm likin' it.
There might not be THAT much risk to various relationships with China and businesses based there, but it's probably now enough to make Rule #1 a consideration.
I'm glad we don't own (say) billions worth of BABA paper.
I'm glad of the risk reduction inherent in the Apple stake reduction. I think geopolitical risk within that position was the single biggest risk in a share of Berkshire.
BYD was a big win, for sure, and it wasn't a lot of original capital at risk. But I think it's easy to ascribe too much to prescience and not enough to luck. Plus, pricewise it got pretty frothy for a while and has gone more or less nowhere for almost four years...the recent good results were "prepaid".
Jim
No. of Recommendations: 3
Certainly not buying BABA and taking a 50% hit has looked pretty smart so far Buffett. They must have discussed it. He could have put $20 billion, or more into it.
But Buffett did buy BYD and it was a home run. Maybe that's why his is known as the GOAT!
No. of Recommendations: 6
But Buffett did buy BYD and it was a home run. Maybe that's why his is known as the GOAT!
I had the impression that that one was pretty much all Mr Munger's play. One rumour was that the position being taken by BHE was because Mr Buffett was so hesitant.
Jim
No. of Recommendations: 1
Munger via Li Lu, iirc.
No. of Recommendations: 3
Yes it was Munger sourced from Li Lu and David Sokol did the diligence for Berkshire. Buffett always deferred any BYD questions to Munger, as it was his idea. Agree he didn’t love it but I imagine Buffett had sign off. But not sure. Munger did use BYD as an example of Buffett continuing to learn, even with his advancing years…
No. of Recommendations: 9
<<Yes it was Munger sourced from Li Lu and David Sokol did the diligence for Berkshire. Buffett always deferred any BYD questions to Munger, as it was his idea. Agree he didn’t love it but I imagine Buffett had sign off. But not sure. Munger did use BYD as an example of Buffett continuing to learn, even with his advancing years…>>
Buffett was totally onboard for the BYD purchase. I was at the annual meeting where WEB said they (Charlie & Warren)
wanted to buy 20%of BYD but Wang did not want to give up that much of the company and Warren said you had
to really respect him for that so they ended up with 10% of BYD.
The "Financial" Press misreported Berkshire's percentage of ownership with BYD over the years because they
got mixed up on the various classes of shares available and the Hong Kong shares.
At the same BRK meeting Charlie described Wang as a cross between Thomas Edison and Jack Welch.
Just telling you what he said folks on the other board a long time ago this stirred up a hornets nest
of Jack Welch comments. Life goes on ....
No. of Recommendations: 4
@oldmarket,
That's all true. But I would add that Warren is a diplomat. I remember the days when he & Charlie used to sing praises of Jack Welch also until they changed their minds. No doubt Wang is an amazing entrepreneur as is Elon but there is a price for everything.
