Warren Buffett Drives an Electric Car (Company)
Buffett’s investment helped make this emerging market play the top stock in Hong Kong – what does it mean for the future of the transportation industry?
Buffett made headlines in 2006 when he purchased a Cadillac DTS, an uncharacteristic luxury purchase, for the thrifty billionaire. Two years later, the Oracle of Omaha made a different kind of auto investment, putting $232 million of Berkshire Hathaway’s (NYSE: BRK-A, BRK-B) capital to work in Chinese electric carmaker BYD (OTC: BYDDF).
While putting himself “behind GM 100%,” as quoted by Left Lane News, did little to help GM, which a few years later found itself filing for bankruptcy protection, the bet on BYD has paid off quite well so far, returning over $1 billion in the last year, and BYD has become the hottest stock on the Hong Kong exchange.
The BYD buy doesn’t show up in Berkshire’s holdings at the end of Q2 because the shares Buffett bought are listed overseas, but there are plenty of ways to play Buffett’s confidence in the sector on domestic exchanges.
The Energy Storage and Battery Technology Stocks Index is quickly becoming one of tickerspy’s most tracked Indexes, and for good reason. The development of economical, efficient battery technologies could revolutionize the automotive industry, and the benefits don’t stop there.
Beneficiaries of breakthrough battery technology include the obvious automotive players, like Toyota (TM), Honda (HMC), and Tata (TTM), as well as wind energy companies, electronics companies like Apple (AAPL), and conglomerates like General Electric (GE).
Over the last five sessions, six of the Energy Storage and Battery Technology Stocks Index components have shot up by more than 10%, with ten more than doubling in the past six months.
BYD’s pink-sheet-listed ADR is on top of the battery sector’s performance rankings over the last month, followed by Altair Nanotechnologies (ALTI) and Exide Technologies (NADSAQ: XIDE). All three have gone up by more than 40% over the period.
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Warren Buffett’s 6 Biggest Stock Buys in 2012 (Jutia Group, 3/22/13)
Warren Buffett on Dividends: Ideas from his 2013 Letters to Shareholders (Dividend Growth Investor, 3/4/13)
Warren Buffett Suntech (NYSE: STP) Buyout (Energy and Capital, 4/10/13)
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