To The Moon

The Wonder. I have always admired the man from a distance down yonder here in SE Asia. I could not afford to make an annual pilgrimage to Omaha to hear him speak firsthand (live), back when Mr Munger was still alive. Neither could I afford to do it now that Mr Buffett’s partners in crime is no longer around. With Greg Abel and Ajit Jain, helping out in both non-insurance and insurance businesses (respectively), I cannot help but wonder if Mr Buffett: Business judgement of identifying ‘undervalue’ stocks is waning slowly. Is slowly passing the baton to his successors to manage the day-to-day running of $Berkshire Hathaway(BRK.B)$. Is less ‘interested’ in his pursue now versus when Mr Munger was still alive. Afterall who had endured the same historical background and experiences as him right ? It is hard if one loses a sparring partner of 59 years. That was how long they have known each other. The Accuses. Why am I suspecting Mr Buffett of losing his ‘golden’ touch ? It is just a hunch based on recent spate of “purchase and sales” patterns that is very unlike Mr Buffett and his investment style. His business acumen and experiences that transcend the decades does not aligned nor fit into such haphazard investment behaviour. What I mean: (1) BYD Sell Off. Berkshire Hathaway invested in Chinese EV maker $BYD Co., Ltd.(BYDDY)$ back in 2008 when nobody in the Western Hemisphere have even heard of this domestic household name, States side. It was a ‘big deal’ win with the BYD investment. Berkshire paid the equivalent of about US$1 a share in 2008 for a 225 million stake (recorded as of 30 Jun 2022 filing); spending approx. $232 million. They remained vested for 14 years, without any movements. Yet when BYD began to flex its global dominance, Berkshire Hathaway turned tail and began offloading the company’s shares over a period of 3 years between late 2022 and well into H2 2024. (see below) BYD sell off timeline. 24 Aug 2022: First reduction of stake to the tune of 1.3 million shares. 08 Nov 2022: Another significant sale of shares all 3.297 million as recorded in a 4 Nov 2022 filing with HK exchange - reducing his stake from 18.22% to 17.92%. 03 Jan 2023. Sold 1.06 million shares, reducing its holding to 13.97% from 14.06%. 03 Feb 2023: Sold 4.235 million BYD shares; leaving his stakes at 1.87%, down from 12.26%, 02 May 2023: Sold because don’t wanna compete against Tesla ? 25 Oct 2023: Further reduction of stake from 8.05% to 7.98%. 11 Jun 2024: Reduced holdings by 1.3475 million shares with revised stake at 7.02%. 19 Jun 2024: Reduced holdings by 2.0175 million shares. Rising trade tension on Chinese EVs. 16 Jul 2024: Further cuts its stake in BYD to less than 5%. No further filing with HK Exchange is required. BYD Share Prices. Throughout the period of sales from August 2022 to July 2024, the average price sold was approx. US$30 per share. Looking at BYD stock price movement - it has remained relatively stable throughout, except for the blip in October 2022 & February 2024. Unlike other HK shares that have seen massive fallout, BYD is holding its value really well. Auto Sales. BYD remains the undisputed EV leader in the Chinese market. In November 2024, of all the EVs sold in China, 32.9% were BYD registered vs Tesla Motors (TSLA)$ 5.8% and Li Auto (LI)$ 3.8%. More importantly, it has successfully made inroads into the European & SE Asia market and are gearing up for the following markets in H1 2025 - Estonia and South Korea. (2) Sirius XM Holdings Inc. $Sirius XM(SIRI)$ in a nutshell, is an audio entertainment company. Its ad-supported and premium music streaming services - Pandora is nowhere near $Spotify Technology S.A.(SPOT)$ in terms of scale and profitability. Mr Buffett already owned some shares in Sirius when he decided to buy more recently. (see below) As could be seen, the uncharacteristic nature in which Berkshire Hathaway bought into SIRI and then began to sell when SIRI was trending downwards. What is ‘stranger’ is SIRI is not exactly a profit generating company unlike BYD. (see below) Loss per share for third quarter: -$8.74 vs wall street expectations of $0.77. This was a massive -1,166% YoY decline from $0.82, a year ago. Revenue came in at $2.17 billion vs Wall Street expectations of $2.19 billion. It was also a -4.4% YoY decline from last year’s $2.27 billion. Despite dismal earnings, Berkshire recently purchased more of SIRI over a 3-day period, 17 Dec to 19 Dec. Above Form-4 showed the different tranches of shares purchased. Over the 3 days, Berkshire has purchased 4,963,844 shares amounting to $0.579 billion. From outside looking in, it looks as if Berkshire is trying frantically to hang onto a sinking ship, perhaps? (3) Ulta Beauty. Logically speaking, Berkshire Hathaway should not have any interest in $ulta beauty(ULTA)$. It is not even a sector / industry that the investment giant is known for ? So, why even begin ? Quarterly Earnings. Ulta Beauty’s earnings per share has been on the decline since Q4 2023. Even as Berkshire made its purchase in Q2 2024, the preceding quarters earnings were all telling. Revenue on the other hand began stagnating since Q1 2024, after a Q4 2023 tumble. Timeline - Buy & Sell. According to a regulatory 13-F filing released Wed, 14 Aug 2024, Berkshire has purchased 690,106 shares of specialty “beauty” retailer by 30 June 2024, for about $266 million. The shares were purchased at an average price of $406.48. Ulta Beauty surged by +14% on 14 Aug 2024, after the stake was revealed. (see above) In a strange twist, Berkshire dumped 95% of the beauty retailer by the time it submitted its 13-F filing to SEC in November 2024. With an average sales price of $375.07, Berkshire endured an approx. $20.5 million loss during exit. On hindsight if Berkshire held off its sales until this quarter (Q4 2024), it would have reported a gain instead. The hasty retreat is also a mystery of the mind. My view points : (mine only) In this post, I have skipped other sales that did not add up as well. Namely, sales of : Apple Inc (AAPL)$ in FY 2024, despite affirming Apple’s intrinsic value during the annual shareholders’ meeting. Bank of America (BAC)$ shares. (see below) Thankfully, Berkshire sales of BAC’s stake did not have an impact on the bank, it is still going strong. As of 20 Dec 2024, its stock price has regained some of the lost grounds, ending Friday at $44.17, just shy of its November peak of $47.77 (27 Nov 2024). As for the quickfire purchase and sale of Ula Beauty, I wonder how much of it was Mr Buffett’s idea vs Greg Abel ? If it was indeed Greg’s decision to buy and sell Ulta, then shareholders have to consider whether there is a need for Plan B, if and when Mr Buffett steps down - if ever that day arrives. Must Read: Click on below titles to access. Repost to share, Like as encouragement ok. Thanks. SentinelOne, Curious Case of a Cyber Stock. US Market: Rally or Sputter Like PSNY ? NU Expands Overseas, Invests in Unicorn. Do you think the buying & selling of above 3 stocks are unlike Mr Buffett’s investment style ? Do you think Berkshire Hathaway will ever reveal who decided the buy & sell of Ulta Beauty ? If you find this post interesting, give it wings! ️ Repost and share the insights ? Do consider “Follow me” and get firsthand read of my daily new post. Thank you. @Daily_Discussion @TigerPM @TigerStars @Tiger_SG @TigerEvents