Warren Buffett has done it once again. Just like he has been doing it over and over again since the start of his career as a security analyst and money manager. 'Be greedy when other are fearful, and fearful when others are greedy' goes his simple homily. But simple doesn't necessarily mean easy, just like it wasn't easy to put your hard earned money in the stock market between September 2008 and March 2009. The markets were tanking almost everyday. Fear was everywhere, gripping everyone.
But not Warren Buffett. Buffett was busy. Busy being greedy that is. Some of his bigger buys during that period were US$ 230 m in BYD Co, a Chinese car and battery maker, and US$ 5 bn of preferred stock in Goldman Sachs along with another US$ 5 bn worth of warrants in the company. The Goldman investment has since generated a US$ 2 bn paper profit for Berkshire Hathaway.
The BYD investment too has been nothing short of a bonanza. In September 26 2008, Berkshire bought 225 m BYD shares at HK$ 8 each, then worth about US$ 230 mn in total. BYD shares closed at HK$ 42.9 this Friday, thus valuing Berkshire's stake at an eye popping US$ 1.25 bn now. Yes, value investing remains as alive and kicking as it was when Buffett started his career. And as you can see above, it can be immensely rewarding for the disciplined practitioner.
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