Warren Buffett’s Right-Hand Man Praises BYD as a Top Investment and Highlights Elon Musk’s Peculiarities

Charlie Munger's Perspective on Elon Musk and BYD

Charlie Munger, Warren Buffett's former right-hand man, once described Elon Musk as a gifted individual but also peculiar. During Daily Journal's annual meeting in February, Munger aired his views on Musk and highlighted Chinese carmaker BYD as a serious threat to Tesla and one of the best investments of his career. Munger acknowledged Musk's genius in some ways but emphasized that BYD was miles ahead of Tesla in China and generating massive profits there.

Munger's Assessment of Elon Musk

Reflecting on Elon Musk's capabilities, Munger stated, "My policy on Elon Musk is that he's a very talented man but also peculiar, so I don't buy him and I don't sell him short." Despite recognizing Musk's intelligence, Munger also commented that Musk's success could be overshadowed by competitors like BYD, which could outperform Tesla in the electric-vehicle race.

BYD's Success and Munger's Investment

Charlie Munger regarded BYD as a remarkable investment, persuading Warren Buffett to bet on the Chinese carmaker and also purchasing shares for Daily Journal. Munger considered this investment a once-in-a-lifetime opportunity, praising its exceptional performance. Berkshire Hathaway's $232 million investment in BYD back in 2008 grew in value by over 30 times within 15 years, resulting in significant profits for the conglomerate. In recent months, Berkshire has sold approximately a third of its BYD stake, earning well over $1 billion in profits. Similarly, Daily Journal realized 15 times the return on its BYD investment when it sold a portion of its stake at the end of 2021.

BYD's Success in China

Munger highlighted BYD's rapid growth in the Chinese market, surpassing Tesla by a significant margin. He noted that while Tesla reduced its car prices in China, BYD was able to raise prices. Furthermore, BYD's auto division generated over $2 billion in after-tax profits in China last year. Munger expressed astonishment at the brand-new entrant in the auto business achieving such remarkable success.

Charlie Munger's insights shed light on Elon Musk's unique qualities and the prowess of Chinese carmaker BYD. Munger's perspective on these industry leaders provides valuable insights for investors and enthusiasts alike.

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By: tmohamed@insider.com (Theron Mohamed)
Title: Warren Buffett’s Right-Hand Man Praises BYD as a Top Investment and Highlights Elon Musk’s Peculiarities
Sourced From: markets.businessinsider.com/news/stocks/munger-daily-journal-buffett-elon-musk-tesla-byd-ev-china-2023-2
Published Date: Tue, 28 Nov 2023 22:03:19 +0000