Buffett liquidates BYD holdings

Buffett's move to liquidate his BYD holdings has been making headlines in the financial media these past two days. When I saw the news, I wasn't surprised at all, just a little curious: why did the old man liquidate his holdings now? My first exposure to BYD came from reading the series of books chronicling Berkshire Hathaway shareholder meetings. In these books, BYD and its founder are among the few Chinese companies and entrepreneurs mentioned repeatedly. According to the books, Buffett bought into the company primarily because of Munger's insistence. Buffett revealed that BYD was one of the few times he and Munger clashed, and Munger slammed the table and demanded Buffett buy into BYD. Later, other sources reported further news that a major reason Munger was interested in this company was because of Li Lu. I certainly don't believe Buffett and Munger bought solely based on recommendations. I believe that even if recommendations were made, the two elders would have carefully examined the company's performance before making their final decision. This shows how compelling and unique this company was at the time. However, just like other stocks the elders bought, such as Coca-Cola and Wells Fargo, I didn't buy this stock just because he did. I simply began to pay more attention to news about this company, whether consciously or unconsciously. Earlier this year, the CEO of Great Wall Motors told the media (roughly): There are companies like Evergrande in the auto industry. I clearly remember that over the next few days, numerous overseas media outlets reported news and leads related to BYD. Out of curiosity, I carefully reviewed these reports and leads. While I couldn't be 100% certain that all the information revealed was true, common sense often allows us to deduce the basic truth of a matter. After reviewing these reports and leads, I immediately thought of the other two companies mentioned in the shareholder Q&A session transcript: Fannie Mae and Freddie Mac. These two monopoly mortgage companies in the United States were originally held firmly by the old men. However, when they realized that they were beginning to disregard risks and were gradually sliding toward an uncontrollable situation, they quickly liquidated their entire positions. Shortly after the two elderly gentlemen liquidated their holdings, the 2008 financial crisis struck, and the practices of these two companies became public knowledge. Only after witnessing their rampant behavior did people realize how these companies, despite their monopoly positions, had engaged in so many shady practices. If such companies hadn't been too big to fail, and if they hadn't received an emergency bailout from the US government, they would have been eliminated from the market. After reflecting on Fannie Mae and Freddie Mac, I began to speculate that the overseas news reports might reveal clues in the company's financial statements. Such a situation shouldn't be hidden from the old man. Had he sold his BYD shares? Although the media subsequently reported extensively on changes in Mr. Munger's holdings every quarter, the focus was always on companies like Apple and Occidental Petroleum, never mentioning BYD. I also forgot to check on his BYD holdings, and so the question gradually faded. It wasn't until seeing this news that I suddenly recalled my earlier thoughts and realized that Mr. Munger had completely sold out his holdings. Further research revealed that he had been selling BYD shares continuously since 2022. Furthermore, Mr. Munger didn't pass away until the end of 2023.

It's obvious that the two old gentlemen agreed on this selling move. It's just that the outside world ignored this news.

Older people are still more experienced.