Berkshire Hathaway sells more shares of China’s BYD

Yahoo Finance Live anchors Julie Hyman and Brad Smith discuss Warren Buffett’s remarks on investing in the auto sector.

Video transcript

JULIE HYMAN: All right, let's also take a look at shares of Tesla. This morning, in the wake of Berkshire Hathaway's annual shareholders meeting, the shares are trending. And the Oracle of Omaha had a lot to say on the state of electric vehicles and the auto sector. He said, "it's just a business where you got a lot of worldwide competitors. They're not going to go away, and it looks like there are winners at any given time, but it doesn't get you a permanent place."

So kind of interesting there. At the same time, we learned that Berkshire Hathaway had continued to trim its stake in BYD, which is a Chinese EV company that it sold nearly two million shares of that firm. That was found out through a filing that it did on May 2nd. So, as usual, putting his money where his mouth is, or taking away money when he's saying he doesn't necessarily see a clear path to leadership for the EV industry, which is interesting.

BRAD SMITH: Yeah, and it's interesting, especially given kind of the international exposure that they had taken onto their own portfolio with regard to EVs. Now, given that we've seen so many new entrants within the Asia-Pacific landscape, especially for electric vehicles, knowing the addressable market within that region alone, this is even more notable here because after you think about the Fords of the world, the GMs, the Teslas that have all tried to plant some type of stake in the ground in China specifically, it's interesting that this move with BYD here lowered Berkshire's holdings to about 9.87% from 10% here. So they still have just shy of a 10% share of the equity in BYD, but at the same time, this trimming netted them about $58.9 million there. So, some good time to perhaps take some chips off the table.

JULIE HYMAN: Yeah, maybe so. Although, people are putting their chips in Tesla still today. I think it's the fourth straight day that the stock has been higher. It was higher by a lot more on Friday. It rose by 5 and 1/2 percent, but nonetheless, I also thought, just quickly, Charlie Munger's comments on electric vehicles was interesting too.

He said, "the electric vehicle is coming big time, and that's an interesting development. At the moment, it's imposing huge capital costs and huge risks, and I don't like huge capital costs and huge risks." So.

BRAD SMITH: Yeah, it was interesting. Even when talking about Elon Musk, they had a little shade that they threw at him over the course of the event, saying they gave him acknowledgment for taking on some very hard tasks and seeing them through to completion while many of them. He said, he likes taking on the impossible job and doing it, Munger said. Warren and I look for the easy job that we can identify. And then Buffett later on talking about them not wanting to compete with Elon. But Munger saying, yeah, we don't want to fail that much.

JULIE HYMAN: Interesting.