> Warren Buffett Blog: August 2019

Monday, August 19, 2019

Bank stocks fare better when the economy is growing strongly, companies and individuals are taking out more loans, and interest rates are high.

Berkshire Hathaway has been expanding its position in banks over the past year. It is now among the five biggest shareholders in Bank of America, JPMorgan Chase, Wells Fargo, Goldman Sachs, U.S. Bancorp and Bank of New York. Its latest disclosure of its holdings showed that the firm had added to its positions in some of those companies in the Q2 of 2019.

Monday, August 12, 2019

Buffett's BYD China investment could fall victim to the US China trade war

US politicians could soon pass new laws that would hurt one of Warren Buffett's investment. The law would prohibit public transit agencies from using Federal Funds to buy railcars or buses linked to the Chinese government. 

Many years ago Berkshire invested $232 Million into BYD, a Chinese electric car company.  In the past decade, BYD has grown into China's largest manufacturer of electric vehicles, including buses, where it has a significant business in the U.S. that employs about 800 workers at a plant in Lancaster, California. BYD has sold nearly 350 electric buses to communities in 14 U.S. states.

BYD has also been a major winner for Buffett, at least until recently. At the end of 2016, Berkshire's 8% stake in BYD was worth nearly $2 billion, making it Buffett's most valuable investment outside of the U.S., although still just a slice of Berkshire's $200 billion investment portfolio. 

Shares of the electric vehicle maker have dropped lately, however, falling to nearly $6.50 from a high of $10.50 back in late 2017, in part because tensions over trade and fears about the Chinese economy but also because of a decline in public subsidies for electric vehicles around the world. Buffett's stake was recently valued at $1.4 billion.