Let the investment legend Charlie Munger tell you. Our call of the day comes from the billionaire vice chairman of Berkshire Hathaway BRK.A, +1.92% BRK.B, +1.72%, who offered investing insights via a podcast from Acquired over dinner at his Los Angeles home. The interview published Oct. 29.
And how did they pick the iPhone maker out of the roster of Big Tech companies? “We couldn’t find anything else. It got cheap — 10 times earnings.” “Well they really did sell cheaper than anybody else in America and they did it in big efficient stores and all, the parking spaces were 10 feet wide instead of 8 feet or whatever they normally are…they kept out of their stores all these people who didn’t do big volumes. They gave special benefits to the people who did come to the stores in the way of reward points. It all worked,” he says.
China EV maker, BYD 002594, -2.48%, which Berkshire owns “was a miracle, but that guy works 70 hours a week and has a very high IQ. He can do things you can’t do, he can look at somebody else’s auto part and he can figure out how to make the…thing. You can’t do that.” He didn’t name names, but one assumes he’s talking about BYD’s rags-to-riches chairman Wang Chuanfu.
He said it was tough to build stakes in those, and Berkshire had to be “very patient and pick away little pieces at a time. It took forever to get 10 billion dollars in investment but it was like just like God opening a chest and pouring money into it. It was awfully easy money.”