Buffett Sells BYD, Earns 30x Profit: A Success?
Warren Buffett's 30-fold investment is finally starting to cash out.
He began investing in BYD's Hong Kong stock in 2008, with the purchase price at only 8 yuan per share, and as of today, the stock price has risen to 240 Hong Kong dollars.
Even without calculating the dividends over the years, his investment return has reached 30 times.
Everyone thinks Buffett is very divine, having seen today's investment returns more than a decade ago. But in fact, if we carefully analyze Buffett's investment thinking, we will find that the truth is not so.
01
First, let's look at the purchase timing.
He bought in October 2008, when the global stock market fell sharply, and the declines in Hong Kong, US, or A-shares were close to and exceeded half.
From Buffett's philosophy, it can be called gold everywhere at that time, and the stock prices of many excellent companies have fallen below the intrinsic value in Buffett's mind.
Moreover, because Buffett holds a large amount of cash for a long time, it has laid a very good foundation for his buying.
But we see that Buffett bought BYD with only 230 million US dollars, which is a very small investment among his many investments, showing that Buffett was not very optimistic at the time.Let's take a look at BYD's stock price trend over the years.
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After a significant drop in 2008, BYD's stock price also rebounded significantly following the stock market recovery in 2009.
However, this rebound was just a flash in the pan, and the stock price later fell again, returning to Warren Buffett's cost of holding.
In the following years, BYD's performance in the Hong Kong stock market was lackluster, with the stock price fluctuating over the long term and only achieving a small increase. In other words, even after 10 years of investment in the stock, it still cannot be considered a successful investment for Buffett.
Compared to Buffett's long-term investment career, with an annualized return rate of over 20%, his investment in BYD can even be considered a failure.
Fortunately, the amount of money Buffett invested in BYD was too small, and Buffett could completely ignore it and hold it for a long time.
Finally, after April 2020, BYD's stock price rose rapidly from 33 yuan to over 280 yuan, and this rapid increase only took 8 months. But it was this 8-month rapid increase that brought Buffett huge returns.
The trend of BYD's stock price is actually very close to that of other new energy vehicles. If we look at the performance of Tesla, the leader of new energy vehicles in the US stock market, it is also quite similar.Although the concept of new energy or new energy vehicles has been around for many years, their stock performance was relatively average before, with no significant outperformance over the broader market.
It was not until the end of 2019, when Tesla was approved to invest in and establish a Gigafactory in Shanghai, that its stock price began to rise significantly in the U.S. stock market.
Observing other stocks in the new energy sector, there was a certain increase in 2019, but this was an increase that followed the market. The real independent rise mainly occurred after 2020 and was driven by Tesla's stock performance.
In this light, it seems that Buffett's investment had a significant element of luck.
04
Another investment move by Buffett this year has also been widely questioned by the market.
Starting from March, the "Oracle of Omaha" has been continuously increasing his stake in Occidental Petroleum, indicating his optimism for oil and gas shares.
However, he bought in March, which happened to be after the outbreak of conflict in Europe, when global oil futures prices were at their highest.
Since then, Buffett has increased his stake in Occidental Petroleum on several occasions, but looking back now, since oil prices began to decline in June, the futures prices of oil have clearly entered a downward trend. This also means that there is not much room for the stock prices of oil-related companies to rise.

Therefore, we need to be aware that Buffett's purchase of Occidental Petroleum may simply be from a portfolio allocation perspective. If one blindly follows and buys in, there could be significant losses.Many years ago, Buffett also experienced a failed attempt at investing in individual oil stocks.
After the subprime crisis in 2008, commodity prices actually surged significantly, with international oil prices reaching a high of $147 at the time.
In 2008, Buffett bought 5.5% of ConocoPhillips, but later international oil prices began to fall from the high of $147, and the stock price of ConocoPhillips he held also fell sharply.
In terms of a single investment, the investment at that time was a failure.
However, for Buffett, this may just be a small proportion of his many investments, and the problem is not too big.
And currently, Buffett's reduction of BYD does not mean that he does not look good on BYD, but according to his investment philosophy, BYD's current stock price has exceeded its intrinsic value.
Moreover, over the years, Buffett has also made a lot of money here, and it is worth his profit-taking.