Is it Time to Partner With Buffett on BYD ?
I've long been interested in investing. My parents did me a great favor by presenting me with a book called "The Wealthy Barber" 20 years ago in which I discovered the power of compound interest.
I was hooked immediately.
My first few years were more focused on mutual funds and real estate. As I spoke to my investment advisor about mutual funds I was constantly disappointed in his lack of knowledge. So I started trying to learn more for myself and somehow ended up (as most value investors do) finding the Berkshire Hathaway annual letter to shareholders. I read them all. Made notes. And read them again. So I'm very interested in Buffett.
And I'm also very interested in the concept of peak oil production which I have been writing about regularly. I feel like it is an obvious supply demand imbalance that has no short term solution.
So put Buffett together with high oil prices and naturally you get to.....BYD of course.
As the share price has come off considerably in recent months I think it is time to take a deeper dive and try and determine what a reasonable entry price might be for BYD shares if a person were to hope to make a profit.
On CNBC last week Buffett made the statement that any decision to purchase additional BYD shares would be determined by price. This doesn't sound like he is thinking it is a steal at current prices.
Buffett has also made it clear that Berkshire wouldn't try to increase its current 10 percent stake in the electric car maker without the support of BYD's management.
Reuters also reported that Buffett met with BYD officials in private last night, and a "major topic" was the possibility of Berkshire raising its stake.
And as you would expect Buffett also reportedly told China's CCTV that he would "probably hold BYD stakes 10 years from now."
Unbelievable to me, there has been speculation that Buffett had gone to China to reduce his stake in BYD because the stock was off its highs of the year and because of delays to export electric cars to the United States.
Are you kidding ? Is Buffett a short term investor ? Does he sell when the price drops ? Would he get on a plane and go to China in order to sell his shares ?
With how much public info there is on Buffett, how can people be so clueless ?
Here is a link to an interview with Buffett on BYD:
I envision BYD as a high quality company with a serious tailwind behind it and a hugely strong friend in Berkshire Hathaway.
I'll dig into BYD in the coming weeks and share what I find.