Warren Buffett: Tesla Stock Is a Terrible Investment (2022) | Hacker News Reader

Warren Buffett: Tesla Stock Is a Terrible Investment (2022)

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20 pointsbelter11 comments

Buffett has stock/owns BYD, fossil fuel companies (Occidental, Chevron), lots of fossil fuel power companies that actively lobby against renewables, GEICO, stealerships [1](also known as dealerships), Lubricants (Lubrizol, only needed for gas cars) and quite possibly a lot more that I don't know about which are threatened/compete with Tesla. It is understandable that he will put his competitors down.

Buffett's only tech investment is IBM, which bombed. He didn't pick Apple[3], which is now half of Berkshire Hathaway's portfolio[2]. Got super lucky from Apple investment. Buffett buys monopolies/oligopolies, which as we all know do regulatory capture and steal money from everyone else.

1)Berkshire Hathaway Automotive is one of the largest dealership groups in America, with over 100 franchises in 10 states: Berkshire Hathaway Automotive is one of the largest dealership groups in America, with over 100 franchises in 10 states

2)https://www.fool.com/investing/2023/12/16/half-warren-buffet...

3)Berkshire Hathaway's cash in Apple. Inc. was selected by one of Warren Buffett's stockpicking lieutenants, not by the "Oracle of Omaha" himself: https://www.wsj.com/articles/BL-MBB-49672

Market can stay illogical for long time...

I doubt Tesla will keeps this level valuation for next 10 or 20 years.

Text outline with section breakdowns and key images for those that prefer it: https://www.videogist.co/videos/warren-buffett-tesla-stock-i...

If you like the thrill of a roller coaster with a child at the controls, it’s not so bad.

Currently my 2nd best stock at about +60%.

Yep sounds like he missed the growth phase and is bitter. There were memes all over reddit about shorting Tesla and having Elon musk show up at your door. My best move was buying 20 OTM tsla calls 3 minutes before they announced the split. I held them through expiry and tried my hardest to find the money to keep the shares. Ended up getting liquidated but still walked away with a very pretty penny

Still won’t buy a Tesla though

Warren Buffett invests based on the fundamentals of a company / stock. Buffett’s point is that he considers Tesla a gamble not an investment because the fundamentals are not there to support the high valuation.

At one point Tesla was valued more than Toyota. Will Tesla sell as many cars as Toyota any time soon? No? Then the valuation is incorrect and will theoretically self correct in time.

I think the point is that Tesla was not always a gamble. If Warren buffet can invest in ZOOM but calls Tesla speculation is clearly a sign of missing the mark. Tesla was setting the bar for electric vehicles well before 2022. It’s okay to say your favorite investor doesn’t always get his picks right.

Tesla's stock was overweight before it was able to turn a profit. The company nearly went bankrupt according to Elon himself before they could turn the corner. It was a big IF on whether Tesla or anyone could produce electric cars at volume or at a profit even while the valuation was sky high. No matter how bullish you are on electric cars (which I am) or Elon, it was a speculative investment and that is not something that Warren does. He is a value investor. He freely admits he has missed a lot of opportunities because of that and there is a strong argument to be made that his era of investing is over or at least not present at the moment.

And Berkshire invested in Zoom, which was probably a Charlie Munger decision; not Warren himself. Charlie loves Zoom. Warren hates Zoom as he explains in this interview: https://www.youtube.com/watch?v=EJImdZEgghQ

> My best move was buying 20 OTM tsla calls 3 minutes before they announced the split.

Options adjust accordingly when a split occurs, so why is it relevant that you bought 3 minutes before?

Tesla has had two splits so far and there wasn't much movement during either.

I did not lose any value to theta decay. When the split announced the stock popped, my calls moved in the money. I got the maximum value for my calls with the least amount of risk. Obviously no one knew when the split was going to happen.

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