Monday, May 20, 2013
Alex Bossert Profiled In Forbes: Meet One Of The Youngest And Brightest Hedge Fund Analysts That Isn't On Wall Street
"22-year-old Alex Bosset is not your typical college student. A finance major at the University of Minnesota, he was recently ranked among the top 14 buyside analysts in a list compiled by SumZero, a social network for professional investors (co-founded by Divya Narendra and funded by the Winklevoss twins)."
Read the rest of the article here: http://tinyurl.com/payuo6w
Friday, March 22, 2013
"The Wall Street Journal today presented SumZero’s 2012 Buyside Awards list, a list comprised of 14 of the best-performing members of SumZero between June 2011 and December 2012. Winners were determined based on average and median idea performance, average community rating, and other quantitative factors indicative of a consistent ability to pick winners and convince the community of the research quality. All winners authorized their presence on the list."
Click Here the Read the WSJ Article: SumZero 2012 Buyside Awards
This will also be on CNBC at 8:10 EST Monday morning.
Monday, March 11, 2013
You are invited to join as fellow shareholders unofficially gather on Friday, May 3, 2013 at the DoubleTree Hotel in Omaha to meet and have fun, starting at 4:00 pm and you can linger until 7:00 pm (or longer). There will be a short program at approximately 5:30.
This is a casual atmosphere. It's a "happy hour" type of gathering - not a formal dinner or anything of that sort.
The DoubleTree is located on 16th and Dodge. There may be some street parking, otherwise, one can use the parking garage with an entrance from the South at 16th & Dodge street, just east of the First National Bank.
Please register here: http://yellowbrkers.com/
I hope to see you there!
Thursday, December 20, 2012
Wednesday, June 20, 2012
Click here for the full report:
Goldman Sachs Investment Report
Wednesday, March 28, 2012
Berkshire Hathaway shareholders from all online communities are welcome to an unofficial gathering on Friday, May 4th, 2012.
You are invited to join as fellow shareholders unofficially gather on Friday, May 4th, 2012 at the DoubleTree Hotel in Omaha to meet and have fun, starting at 4:00 pm and you can linger until 7:00 pm (or longer). There will be a short program at approximately 5:00 or 5:30.
This is a casual atmosphere, with light snacks available. It's a "happy hour" type of gathering - not a formal dinner or anything of that sort.
The DoubleTree is located on 16th and Dodge. There may be some street parking, otherwise, one can use the parking garage with an entrance from the South at 16th & Dodge street, just east of the First National Bank.
To register for the event: http://yellowbrkers.com/
Monday, September 12, 2011
Note: A recorder wasn't used and therefore the following is a summary of what he said rather than an exact transcript.
$100,000 invested in June of 2000 would be $554,600 today. This is an annualized return of 17.3% since 2000 vs. 1.1% over the same period for the S&P 500.
Assets under management: $580 million
A few past ideas:
International Coal Group:
Purchased in February 2010 at $4.3
Sold April 2011 at $10.30
138% return in slightly over 1 year
Wilber Ross founded the company and sought to replicate his International Coal Group playbook. Mohnish discussed Wilbur Ross's history and why it made sense to figure out what he was doing now.
· Mohnish liked that the company was going into metallurgical coal
· Fairfax was buying
He found the investment from looking at Fairfax fillings
Reverse engineering other people’s ideas is a very powerful approach
Purchased in April 2009 at $12.21
Sold April 2011 at $37.3
206% return in 2 years
Mohnish became interested when the stock fell 90%
Thesis: 100+ NYC’s to be built over the next 100 years. Places such as China and India are expanding rapidly.
Healthy balance sheet to ride out the storm
2-3 years out sales and FCF are likely to grow significantly due to fast growth in the Asia markets
Downside protection: selling below replacement cost
Terex was a 2% basket bet
At a price of $16 Terex is interesting to look into again
Purchased at $1.26 in December 2008
Sold July 2011 at $6.3
360% return in two and a half years
Found this idea by looking at John Burbank’s portfolio. They owned over 13% of the company.
The company was trading for $146 million and had cash of $300 million
This idea plays into the 100 cities thesis
Low probability of loss of capital
Management was unknown
Took comfort in the fact that it was a net net and John Burbank’s ownership
Some large caps are quite cheap today
The fund has a large non US exposure. 55-60% of the portfolio has revenue/ assets outside the United States.
25% of the fund’s cash went into recent volatility. The fund was able to put meaningful capital to work. The fund still has plenty of dry powder.
10% of the portfolio has gone into Japan. This is the cheapest market in the world. Very cheap and consistently profitable. There is a wide discount to intrinsic value and Mohnish expects good returns.
Mohnish’s first ever stock tip:
Taisei Oncho (JASDAQ: 1904)
Founded in 1941
Design and manufacture AC/ plumbing equipment
$59 million market cap
Cash plus bonds minus unearned revenue minus debt is $114 million
Net Income $6.1 million
Pabrai Funds has been buying every share offered since December 2010
Pabrai Funds now owns 1.4% of Taisei at an average price of $4.28
Consistently profitable since 2006
Tangible book value of $16.78
This company is trading at ¼ of intrinsic value
30-40 similar companies in Japan
Question and Answer session:
1. Can you discuss you investments in Goldman and BYD?
He doesn’t discuss particular investments. But he did say that he got the ideas from Buffett.
2. Given Buffett’s investments in Bank Of America, what does he think of the company? Are the warrants more attractive than the common?
He will not comment if he is buying or not. But he cited a study written by a few professors that said if you buy what Buffett has bought at the end of the month that his holdings are announced. And purchased at that week’s high price, you would still do significantly better than the S&P. So Bank of America is probably a good place for investors to look.
Frontline had most of its ships on spot charters. Then rates collapsed. Across the industry the single hull ships were taken out of service and scrapped.
If Frontline liquidated its VLCC’s, the value of those ships only fell from $70 to $60 million. The stock priced the ships at $15 million.
He bought because the stock was really cheap but it’s a bad industry over time.
4. Why were the investments in 2008 so small?
Some were basket bets on commodities and those were 2% positions. Normal positions are 5%. 10% is the most he will put into a company. The Japan basket bet is currently 10% and could reach up to 20% of the portfolio.
5. How do you value Potash?
He won’t discuss current holdings.
6. When making investments in commodity companies, how do you handicap for the risk of more supply entering the market and low barriers to entry?
It’s important to know where the company is on the cost curve. They want to own the lowest cost producer. When the price of the commodity goes down, the highest priced mines will close but the lowest cost producers will continue to be profitable.
7. If a 5% investment quadruples and goes to 20% of the fund, will you trim that position?
He’s never trimmed a position. The portfolio is less concentrated now, so this is less of an issue. He will only sell if it goes above intrinsic value or he finds a better investment. He usually sells at 90% of intrinsic value.
8. How do you analyze Japanese companies when information might be difficult to get or only in Japanese?
Financial statements are always in English and that’s the first step. It’s a basket bet so he spends less time researching each company than he would for a normal position. He didn’t hire a translator because that would take too long. Japan has a very trustworthy culture. He would never do the basket approach in China, India or most other places.
9. What are some investments that have lost money in the past?
The Pabrai Funds have made mistakes. The frequency of mistakes has gone down. One mistake was Sears. Many smart people were buying. Lampert is a smart guy. But he should have realized that it was a poor business. The business continues to deteriorate over time and the company has no moat. The funds lost 60% on their investment in Sears. He added an item to his checklist to prevent this mistake in the future.
10. Why did he sell Berkshire Hathaway?
Berkshire is doing well and is likely to do better than the index over time. But he can find cheaper things to invest in.
11. Are placeholders still part of the portfolio?
He no longer uses them because they didn’t work. One of his mistakes going into the financial crisis was being fully invested. The placeholders went down a lot which hurt the portfolio. It’s a much better idea to have a cash cushion because it tempers a decline and it provides dry gun powder when stocks get cheap.
12. Why is he invested in alternative energy?
He doesn’t want to discuss his ideas so he wouldn’t answer this question.
13. How do you structure the portfolio to withstand a crisis?
The portfolio has become more diversified and he also holds a larger cash cushion.
Charlie Munger says if you can’t handle a 50% drop in your portfolio then you shouldn’t be investing because that will eventually happen.
Berkshire Hathaway has gone down 50% a few times even though it’s a great business. In a stock market decline the fund will most likely go down.
However, investments such as the one in Japan will not be correlated to the rest of the portfolio.
14. How do you deal with currency in foreign investments?
He said he has no great insight into currency and he didn’t hedge the Yen. Since he started buying Japan, the index is down 15% and the Yen is up 8%. So far his basket is profitable. He ignores the effect of currency.
15. When investing in distressed businesses, how do you distinguish between a temporary verse long term problem?
He admitted making mistakes on this in the past. This is one of the most important factors and he spends a lot of time on this question. But it comes back to finding the intrinsic value and comparing that to the stock price. Investors need to determine if the distress is justified or not. For example, London Mining was worth much more in a private transaction than the price the Pabrai funds were buying at.
16. When you interview corporate management how do you evaluate their decision making process?
Most CEO’s are very poor capital allocators. A good way to judge management is to look at what tangible book value has done over time. He doesn’t interview management or even talk to them because he doesn’t want to be convinced by their sales skills. Management is always optimistic and this could cloud his decision making process. It’s better to evaluate management on your own and look at their past decisions.
17. For commodity based businesses you look at the cost curve to determine a good investment. What metric do you use for other industries?
In a commodity business he wants to own the lowest cost producer. It’s different for each industry. In retailing he looks at gross margins. This shows how well the company is run. In banking it’s the return on assets. It depends on the industry.
18. I didn’t quite catch the whole question but it had to do with his philosophy on following great investors?
This strategy doesn’t always work. But it’s a great search strategy. He’s found it to be very effective. Mohnish follows Klarman, Burbank, Watsa etc.
19. At what point does creating a basket distance you from understanding individual companies?
He’s borrowing the idea from Ben Graham. The situation in Japan is similar to what Graham was doing in the 1940’s and 1950’s in the US. This basket won’t dominate the portfolio, it’s a temporary thing.
20. How do you manage tough times?
People lose sight of basic reality. Most people freak out when their job is lost. It’s important to focus on what’s most important in life and what makes you happy. Keep a balance between work and those things.
Friday, July 15, 2011
With 15,000 or more public companies in the United States, how should investors go about finding undervalued companies? Finding companies to invest in is not easy considering there are around 10,000 hedge funds and 7,500 mutual funds scouring the stock market. One of the most important components of being a good investor is the search process. One of the most common questions I get is how I find the companies I invest in. Here are the ways I find companies to research:
1. Check what other successful investors are buying. If Warren Buffet, Charlie Munger, Joel Greenblatt or other great investors are buying a certain company then its always the first place I look. The best site to check what great investors are buying is Gurufocus. For funds not mentioned on this web site, checking the 13f fillings on the SEC web site is a great resource. For example, here are Berkshire Hathaway’s equity investments.
2. I’ve generated a few ideas by asking people I think are very smart, what they are investing in. This is one of the quickest and most effective idea generators.
3. Oftentimes successful money managers will discuss what they are investing in in their letters to investors. Here are a few web sites that post hedge fund letters: MarketFolly and Value Investing World. In addition to these, going to the web site of the fund may lead you to its letters. For example, here are Third Avenue’s letters.
4. I frequently scan the 52 week low list. This is a great way to find distressed companies that could be cheap. I use Morningstar’s 52 week low list.
6. Another great resource is scanning the Value Line Investment Survey’s list of “Bargain Basement Stocks, ” “Lowest P/E Ratio’s” and “Widest Discounts From Book Value.”
7. Joel Greenblatt’s Magic Formula screen is another source I use to generate ideas.
8. I subscribe to Forbes, Fortune and the WSJ. These publications are all a great sources for ideas.
9. I also set alerts online for specific events such as delistings, earnings misses, spin offs etc.
11. Here are some web sites I scan for spin Offs and other special situations: The Online Investor, Arbitrage View and Spinoffs. In addition, the SEC web site is useful for finding out about spin offs. Every spin off has to file a form called a 10-12b with the SEC. Searching the SEC web site for these fillings will give you a list of all the recent spin offs.
12. I don’t use stock screens very often but they can be a great starting point: Yahoo’s seems to be the best. Although, the only decent stock screeners I’ve found you’ll need to pay for.
Tuesday, July 5, 2011
Friday, May 13, 2011
Interviews And Other Readings On Buffett, Gates, Munger:
Thursday, February 24, 2011
Tuesday, September 28, 2010
The meeting started with an overview of how the fund has performed. Since the fund was started in 2001, it has returned 15.1% annually compared to -1.5% for the S&P 500.
$100,000 invested in the fund in June of 2000 would be $408,000 today.
Mohnish’s goal is to beat the index by 3% annually.
This past summer 3 interns worked part time on the checklist 2.0. They identified mistakes by great investors that resulted in a permanent loss of capital and analyzed why the mistakes occurred. They looked for commentary by the fund managers on these mistakes. They found that these investors almost never discussed their mistakes.
The biggest mistake was an investment in AIG by the Davis Fund which resulted in a $2 billion loss for the fund.
Mohnish said that the checklist is a great weapon in the Pabrai Funds arsenal.
Mohnish then went through one winner and one loser in the portfolio.
The worst investment during the period was Ternium which was actually sold at a small gain.
The winner he discussed was Teck cominco. This is the best investment the fund has ever made. The Pabrai Funds made an 8x return in only 3 months. Mohnish invested because they have some of the lowest cost mines in the world. The reason they were so cheap was because of a liquidity mismatch on the balance sheet. It had a large amount of debt coming due in a year. Mohnish felt that if they weren’t able to refinance the debt that they could sell assets piecemeal because of their highly diversified operations. In the worse case, the company would be worth a lot even in reorganizations because its book value was so high.
Question and Answer:
How Long did you follow Teck Cominco before buying?
Mohnish said he spent less than 5 days researching Teck because there were so many bargains at this time. Teck had a very solid moat because it was the lowest cost producer. To find Teck he looked at industry cost curves and paid attention to the lowest cost producers. The most important question to figure out was the liquidity mismatch.
Thoughts on Fairfax?
He doesn’t discuss current holdings.
Why don’t you discuss current holdings?
If investors get in the habit of discussing their investments they may end up suffering from commitment bias. If they constantly talk about how great a company is, they may suffer from a bias that could impair their judgment.
What are your views on position sizing?
His allocation policy changed in 2008 to reflect slightly elevated investment risks of his investment baskets and prior mistakes. If he has 10% positions it’s very hard to recover from a mistake. He discussed his new allocation framework with Charlie Munger who disagreed at first. After Mohnish explained it further, Charlie agreed that Berkshire Hathaway has achieved success with a more diversified portfolio. Mohnish talked about basket bets. When the risk is slightly elevated he will buy a basket of companies with small weightings. For example, he said he is currently researching companies in Japan. If he ends up buying companies there, he will buy a basket of companies each with small weightings in the portfolio. He said stocks there are very cheap.
What attracts you to a business?
When he finds a company that looks interesting he starts by thinking as a skeptic. He looks for something that will prove him wrong. He looks for areas of extreme mispricing. It has to be very undervalued but he also has to be able to understand it. He thinks there may be value in Coke bottlers in Japan. The Nikkei has done nothing for 27 years.
Has the increasing size of the fund negatively affect performance?
The performance of the fund has not been affected by size or fund inflows. He said that the fund is sitting on a lot of undervalue assets.
Has the economic turmoil changed your model?
Mohnish said he has more of an appreciation for macro issues than he has in the past. He also said that some macro trends make sense to base investments on. But the majority of macros trends such as inflation and interest rates are very difficult to predict and he doesn’t make judgments on those.
What are your thoughts on the financial industry?
Understanding management is key. You want to look for competent and honest managers. Because of the high leverage, management cannot make any mistakes in reserving. Also, it’s very difficult for outsiders to understand reserving. He couldn’t understand Citibank.
How much time do you spend on the balance sheet of companies you invest in?
Before he invested in Teck Cominco he read the last 8 years of annual reports. He spends a lot of time on the balance sheet.
What’s your philosophy on timing buying and selling?
He expects to be wrong in the future on selling. He said its fine to sell to early. If a stock goes down after he buys it that’s fine as long as he is still right about intrinsic value and he has dry powder to invest.
What did you identify with the checklist project?
The mistakes were concentrated in 08-09 and included a lot of financials. A lot of the mistakes were similar so he just picked a few. He analyzed Longleaf’s investment in GM. Longleaf’s management discussed the GM thesis in its reports. The mistake they made was they missed the forest from the trees. They missed the big picture. They figured that because GM did so well in the truck market that that would carry them through. They missed the fact that gas prices would rise to $3. He also said that he greatly respects these managers but that it’s important to learn from them. Longleaf also made the mistake of looking at the wrong variables.
How do you know where the edge of your circle of competence is?
If you have to ask yourself that question when looking at a company, then it’s probably beyond your circle of competence. You have to be honest with yourself. In the case of the Japanese companies he is researching, he has no interest in American listed Japanese companies. He will use the basket approach to Japanese companies because of the unfamiliarity. He also said that these Japanese companies are extremely cheap.
A business owner in the audience said after analyzing his own mistakes he noticed many of his mistakes were repeated. He asked if Mohnish had made a mistake more than once and was susceptible to reoccurring mistakes in one area?
Chris Davis wrote about a mistake he made in 2002. He ended up making the same mistake again in 2008 with AIG. Buffett made the same mistake twice as well with the original Berkshire Hathaway purchased and later on, with the Dexter Shoe purchase. Leverage is a very important factor to consider. One item on the check list is whether or not he suffers from any personal biases. The checklist forces him to take a step back.
Do you see any bubbles today?
Bubbles are hard to spot. Real estate in certain parts of China is probably a bubble. There are many bubbles around all the time. He mentioned a book called Trendwatching.
What’s your philosophy on investing in foreign markets?
He said that investing in US and Canadian companies that are driven by Chinese factors would be of interest to him. It’s important to understand foreign growth. You have to watch out for bubbles. China and India have good prospects but there may be an overall bubble. He’s very reluctant to invest in China but he’s interested in benefiting from Chinese growth. He skips Chinese companies because of accounting.
What does he think about natural gas companies?
The industry may be subject to a disruptive shift because of technological changes. The low prices may be permanent but he has no idea. The only good way to invest would be at the bottom of the cost curve and he can’t find one. There is no choke point in natural gas unlike iron ore. Natural gas also has substitutes. Mohnish recommended the book, Rational Optimist. He talked about how cheap energy allows countries to create more fresh water which will allow more agriculture.
How do you prevent macro issues from blinding investments?
He’s learned to appreciate macro issues more than in the past. As an investor you can’t get a handle on all factors. So it makes sense to spread ideas out more. The micro factors trump the macro factors. The company has to be able to control its destiny. He looks for staying power so the company can withstand shocks.
This question came from an investor who has to pull out money for living expenses. He asked how he can get more visibility on what taxes will be?
Mohnish practices tax planning in the funds. He sells holdings between the funds to cancel capital gains. The statements sent to shareholders should give them a good idea what the expected tax rate will be. Mohnish is a big tax payer so he is very sensitive to tax issues.
Is your philosophy on portfolio allocation shifting more towards preserving wealth instead of growing it?
The Kelly Formula is only correct when making many bets. He always under bet the Kelly Formula. Since Mohnish is making few bets, the Kelly Formula doesn’t work. He never fully used the Kelly Formula because it would have told him to bet more heavily. Return of capital is more important than return on capital. If people redeem their money during down times that is permanently lost capital for those people.
Can you name some great companies that you’d love to own at the right price?
Ikea, In and Out Burger, Costco, the low cost mines owned by BHP and Rio Tinto. Great companies are all over the place across the world. There are great companies in India and China but and ownership issues exists over there. Pricing is also an issue. Ben Graham’s approach was to go to the store and buy what was on sale and Charlie Munger’s approach is to go to the store and wait for quality items to go on sale. He likes Charlie’s framework.
What extra work do you do to analyze financials?
He’s reluctant to own most financials. They do own Goldman Sachs. He’s read two books on Goldman. It’s a great business. He doesn’t have a problem with management ethos but it’s improving. It’s a very complex business. They have the potential to grow huge overseas because they have few offices overseas right now. Since it has opaque parts to its business he made it a basket bet.
Does checklist address good portfolio strategies?
No. The checklist deals with analyzing companies. Mohnish recommended that this person read the fundamental value investing books. Mohnish always tries to learn from others.
Would you be more interested in a more certain intrinsic value or a cheaper price?
Currently the fund holds a lot of cash as there is less cash in the fund he demands higher discounts for new investments. I wasn’t able to too write down most of his answer.
What’s your average cash level since 1999?
In a crisis, cash plus courage is priceless. Next times a crisis strikes, he wants more cash. Instead of jumping from his second best to his best idea he instead lets investments play out and clings to ideas instead of jumping around.
How does Mohnish spend his free time?
He does plenty of other things. He has a daily nap, plays racquetball and plays bridge.
Monday, July 12, 2010
Wang entered the automobile business in 2003 by buying a Chinese state-owned car company that was all but defunct. He knew very little about making cars but proved to be a quick study. In October a BYD sedan called the F3 became the bestselling sedan in China, topping well-known brands like the Volkswagen Jetta and Toyota (TM) Corolla.
One more thing reassured him. Berkshire Hathaway first tried to buy 25% of BYD, but Wang turned down the offer. He wanted to be in business with Buffett - to enhance his brand and open doors in the U.S., he says - but he would not let go of more than 10% of BYD's stock. "This was a man who didn't want to sell his company," Buffett says. "That was a good sign."
Wang typically works until 11 p.m. or midnight, five or six days a week. "In China, people of my generation put work first and life second," says the CEO, whose wife takes responsibility for raising their two children.
Even before visiting BYD, Sokol believed in electric cars. His people at MidAmerican have studied clean technologies like batteries and wind power for years because of the threat of climate change. One way or another, Sokol says, energy companies will need to produce more energy while emitting less carbon dioxide.
Electric cars will be one answer. They generate fewer greenhouse gas emissions than cars that burn gasoline, and they have lower fuel costs, even when oil is cheap. That's because electric engines are more efficient than internal-combustion engines, and because generating energy on a large scale (in coal or nuclear plants) is less wasteful than doing it on a small scale (by burning gasoline in an internal-combustion engine).
The numbers look something like this: Assume you drive 12,000 miles a year, gas costs $2 a gallon, and electricity is priced at 12 cents per kilowatt, about what most Americans pay. A gasoline-powered car that gets 20 miles to the gallon - say, a Chevy Impala or a BMW X3 - will have annual fuel costs of $1,200 and generate about 6.6 tons of carbon dioxide. Equip those cars with electric motors, and fuel costs drop to $400 a year and emissions are reduced to about 1.5 tons.
BYD's breakthrough came when Wang decided to substitute migrant workers for machines. In place of the robotic arms used on Japanese assembly lines, which cost $100,000 or more apiece, BYD actually cut costs by hiring hundreds, then thousands, of people.
Access to rare earth minerals:
As Newsnight's Economics Editor Paul Mason now reports these metals, 97% of which are mined in China, have the potential to shift the world's power away from the West.
The government plans perfectly meshed with BYD's development goals. So in 2008, the company signed an agreement with the government in the southern provincial city of Shangluo to build a 1 gigawatt solar battery production facility.
In the future, said an insider at the Shaanxi Development and Reform Commission, BYD plans to set up alternative energy facilities in Shangluo and the northern city of Yulin, including silicon smelting plants, solar battery production plants, and solar power stations. BYD's Shenzhen operation has been put in charge of researching the conversion and application of this new energy venture.
Nevertheless, the Shangluo government's land authority has already started working with BYD. A 27-hectare BYD New Energy Base is currently under construction on the city's eastern outskirts, and is expected to provide 1 GW generation capacity this year. The initial 450 million yuan investment includes a 50 million subsidy from the local government, and a 250 million loan from the Bank of China.
Moreover, Shangluo's government has spent tens of millions of yuan on resource extraction, discovering three silica mines and a vanadium mine. Development rights for two silica mines were awarded to BYD. On the provincial level, the Shaanxi government has set aside 800 million yuan for developing alternative energy, mostly for upstream solar energy production. Government sources said some of this money is earmarked for BYD.
In the future, BYD may tap into another government bank account tied to a 10 billion yuan fund for alternative energy investment at a Xi'an national civil aviation base.
Indeed, BYD's all-electric e6, has just two motors (45 parts each), one powering the front axle and the other the rear, and two gearboxes (60 parts each) to go with each of the motors. That means the whole system has 210 primary parts, excluding nuts and bolts. In comparison, BYD's F6, a gasoline-fueled vehicle, has a total of 1,400 powertrain parts: a V6 engine composed of 840 parts and a transmission with 560 parts.
Speaking at an event in Beijing, Zetsche remarked “If you look at the population and the growth here, you quickly reach the conclusion that it would be unthinkable to provide these people with traditional gasoline- and diesel-powered vehicles. There just isn’t enough oil for that. So there has to be personal transportation that is not dependent on oil and is CO2-free to the greatest possible extent. In this regard, BYD is clearly a front runner.
Put simply, cheap battery storage at scale would address one of the biggest drawbacks to wind and solar energy, which is that, unlike coal or nuclear power, they are unpredictable -- you can only make electricity when the wind is blowing or the sun is shining. "If you can store electricity when the wind blows, and have it available when you need it, that argument goes away," Sokol says.
BYD, partly owned by Warren Buffet, has injected around five billion yuan (about 731.5 million U.S. dollars) into the operation of the Huizhou plant, which produces rechargeable batteries, automobile parts and handset components, the newspaper Xinhua reported.
Facilities for the production of batteries for the company’s electric cars are almost ready now, since construction began in September last year.
According to relevant information, the actual price of F3DM has been raised by 50,000 Yuan from 169,800 Yuan for relieving the current contradiction of demand and supply. Comparing with other types of vehicle of BYD, the ordering time for F3DM low carbon vehicle will be longer. It’s said that some of the customers calling for consultation are from Hong Kong, Beijing and even oversea.
Currently, the basic condition for promotion of electric vehicle in Shenzhen has been increasingly mature. The first batch of electric vehicles firstly built by China Southern Power Grid in Shenzhen has been put into operation with two charging stations and 134 charging cords started. The two charging stations are designed to have 9 charging cabinets which could accommodate 18 vehicles at the same time.
He added that electric city buses and plug-in electric buses will also be produced by 2015. At that time, the output of electric vehicles will make up 10 percent of the total number of electric passenger vehicles. China National Offshore Oil Corp. is considering building battery-changing stations for electric vehicles, part of a broader push by the state-owned oil giant that could give a boost to electric cars in China's huge market.
Link: http://thebreakthrough.org/blog/Rising_Tigers.pdf or http://thebreakthrough.org/blog/2009/11/rising_tigers_sleeping_giant_o.shtml
After that, the company's next goal is to expand throughout the States, and only after that is done will it turn to building hybrid and fully electric cars here. BYD's new operations are expected to add several hundred jobs to the LA's employment rolls.
BYD's Los Angeles headquarters will be responsible for sales, marketing, and research and development for its automobiles and energy products, which include solar panels, LED lighting systems and home and grid level energy storage units through BYD's unique iron-phosphate batteries, Schwarzenegger's office said in a statement.
"The cooperation could involve the establishment of industrial standard for electric cars as well as joint investment and production," he told reporters at an auto forum in Shanghai yesterday without providing details.
China is aggressively pushing forward a plan to speed up the development of new energy vehicles, which include financial subsidies as well as 10 billion yuan (US$1.5 billion) investment to help car makers upgrade technologies.
Several car makers, including SAIC Motor Corp, Chang'an Auto Group and BYD Auto Co Ltd, have poured a huge amount of funds into investment and offered various new models of green cars to meet demand.
Plans call for offering a 15 percent discount on the wharfage rate for battery electric vehicles passing through the port. The reduced rates could go into effect by September, pending final approval by the harbor commission, the California Ports Authority and the Los Angeles City Council.
The proposal was introduced last week, when Chinese manufacturer BYD Auto Co. announced plans to move the company's North American headquarters to Los Angeles.
"BYD is a truly visionary company and the zero-emission tariff our port will offer is another great example of our strong desire to work with and attract global alternative energy companies to Los Angeles," Mayor Antonio Villaraigosa said. "By pursuing 21st century clean technology enterprises, we are building a foundation for our future, both economically and environmentally."
Lu personally owns at least 2% of BYD, which rose 400% in 2009. I don’t know anything about his investments beyond that one position, but I know he is a huge believer in taking concentrated, high conviction positions. If that is the case here, BYD’s spectacular results must have contributed a lot to his returns for 2009 which may make a 200% for the year possible.