Buffett Posts $1 Billion Profit on China Hybrid Carmaker BYD

[Joanne98]

Source: Bloomberg

July 31 (Bloomberg) -- Warren Buffett’s Berkshire Hathaway Inc. earned a $1 billion paper profit from an investment it agreed to make in Chinese carmaker BYD Co. less than a year ago.

The automaker has jumped fivefold in Hong Kong trading since the deal was announced on Sept. 27, helped by Buffett’s investment and rising demand for fuel-efficient vehicles. Three days earlier Berkshire agreed to an investment in Goldman Sachs Group Inc. that has since generated a paper profit of about $2 billion.

“When Warren Buffett says the sun shines out of somebody’s backside, it’s worth paying attention,” said Guy Spier, principal at New York-based hedge fund Aquamarine Funds LLC, who owns Berkshire shares and has researched BYD. Buffett is “betting on the jockey in this case,” Spier said, referring to BYD’s Chief Executive Officer Wang Chuanfu.

Berkshire’s MidAmerican Energy Holdings Co. unit agreed to buy 225 million new shares of BYD for HK$8 apiece. That stock now has a market value of HK$9.66 billion ($1.25 billion), based on today’s closing price. Buffett will pay HK$1.8 billion.

BYD said last night it completed the sale. Buffett didn’t respond to a request for comment.


Read more: http://www.bloomberg.com/apps/news?pid=20601109&sid=amaKePJpsGCk

---

We're losing our new economy before it even got started. As long as the fucking conservatives are in the way nothing good is going to happen!

[JDPriestly]

1. Our economy is simply being ignored by the likes of Warren Buffet

Remember, we are virtually underwriting this deal since we have put money into some of the same companies in which he invested -- except that his investment was made on better terms than ours. There is no end to the greed and callousness of some people. Let the American economy and the dollar go the way of the horse and buggy. As long as they get their cut, they do not care.