Buffett close all positions BYD

In the past couple of days, Buffett's action of closing all positions in BYD has made headlines in many financial media.

When I saw this message, I was not surprised at all, but I was a little curious, why did the old gentleman only clear the warehouse now?

My first exposure to BYD was entirely due to reading a series of books on the transcripts of Berkshire Hathaway's shareholder meetings.

In this series of books, BYD and its founder are among the few Chinese companies and entrepreneurs that are repeatedly mentioned.

According to the description in the book, Buffett bought the stock of this company mainly because of Munger's insistence. The old man revealed that during the few times in his life when he had disagreements with Munger, BYD was one of them. At that time, Munger slammed the table and demanded that Buffett buy BYD.

Later, there were other channels that reported further news stating that one of the main reasons Munger was interested in this company was because of Li Lu.

I definitely do not believe that Buffett and Munger's purchases are solely because of others' recommendations. I believe that even under others' recommendations, the two gentlemen would carefully examine the company's situation before making a final decision.

It can be seen how remarkable and unique this company was at that time.

However, just like the other stocks that the old gentleman bought, such as Coca-Cola, Wells Fargo, etc., I didn't buy it because the old gentleman bought this stock, but since then I have consciously or unintentionally increased my attention to the company's news.

Earlier this year, the CEO of Great Wall Motors made a statement to the media (in essence):

There are also companies in the automotive industry like Evergrande.

I have a clear impression that in the next few days, many overseas media spread news and clues related to BYD.

Out of curiosity, I carefully read the news and clues, and although I dare not be 100% sure that all the information revealed in them is true, many times we can deduce the truth or falsehood of the basic situation of a matter based on common sense.

After compiling through the news and clues, I immediately thought of the other two companies mentioned in the transcript of the shareholder Q&A: Freddie Mac and Fannie Mae.

The two mortgage companies that hold a monopoly in the United States were originally firmly held by the old gentlemen. However, the two old gentlemen later discovered that they began to disregard risks and gradually slid towards an uncontrollable edge, so they quickly closed all positions.

And not long after the two old gentlemen cleared their positions, the 2008 financial crisis occurred, and the actions of these two companies were also exposed. When people saw the misdeeds of these two companies, they realized that they had done so many dirty things when they were originally in a monopoly position.

If it weren't for the fact that they were too big to fail, if it weren't for the emergency rescue of the U.S. government, such companies would have been eliminated from the market.

After thinking back to Freddie Mac and Fannie Mae, I began to speculate that the situation revealed by overseas news should be traced from the financial report, and such a situation should not be hidden from the old gentleman, did he sell the BYD shares he held?

Although the media would extensively report on the old gentleman's position changes every quarter, they always focused on companies like Apple and Occidental Petroleum, and no one ever mentioned BYD. I also forgot to check the changes in the old gentleman's BYD holdings. Therefore, this question gradually faded from memory.

It wasn't until I saw this news that I suddenly recalled my previous thoughts and realized that the old gentleman had completely closed all positions. As I further searched for more information, I found out that the old gentleman had been continuously selling BYD since 2022.

In addition, Mr. Munger will only pass away at the end of 2023.

It is clear that this selling action is the consensus of the two old gentlemen. However, the outside world has overlooked this news.

Ginger is still old and spicy.