Face Off Again?

9月29日,沃伦?巴菲特宣布以每股港币8元的价格认购2.25亿股比亚迪公司的股份,约占比亚迪总股本的10%。受此影响,比亚迪股价大涨,港股及国内A股相关概念炒作不断。

显然,关注比亚迪的并非只有巴菲特一人。理财周报独家获悉,就在此前两天,国内曾有多家基金公司前往比亚迪进行了考察。当然,他们并不晓得巴菲特认购之事。

有趣的是,这些很多事后追捧巴菲特价值投资的国内投资人士,在当时恰恰做出了与巴菲特完全相反的判断。他们认为比亚迪估值偏高,需谨慎买入。

考察完比亚迪,十几位基金公司人士的总体感觉是,比亚迪虽然基本面尚好,但人员流失严重,原材料成本上升。上半年虽然收入增加,但因成本上升缘故, 利润也在下降。因此,感觉比亚迪与其他同类企业一样,基本上没有摆脱本年度整体经济下行的大环境。而且估值也不低。因此,基金公司的判断是“买入有风险, 需谨慎。”

在基金公司作出判断几个小时后,就有消息传出巴菲特将要出手。很多分析师的态度一下子又有了180度大转弯。

2007年9月以来,受与富士康诉讼案的影响,比亚迪的股价步入下滑通道,从77港元的最高点一路下跌到8.4港元。

股价的下跌强化了市场上的质疑,2008年9月初,BNP百富勤发布的研报称,比亚迪的汽车业务扩张速度令该行担忧其盈利能力;另一方面,其子公司比亚迪电子(0285.HK)的手机业务贡献,虽然正进一步扩张,但不及预期强劲,该行给予比亚迪“减持”的评级。

9月29日,以18亿港元购入10%在港上市的中国内地最大充电电池制造商比亚迪的股份,短短三个交易日,比亚迪股价飙升89%。

“华尔街多少年?中国资本市场才几年?”上述投资总监说道,“国内证券从业人员毕竟经历的太少,在大牛大熊的转换间还是缺少经验。很多公司的分析师年纪都很小,甚至是80后。没有经历过经济周期的人,你让他们如何能够作出正确的判断?”

“另外,国内的很多投资者会受到制度上的制约。特别是基金经理要受到短期排名和基准业绩比较的羁绊。公司不会给你很多的时间,让你去做长期投资。”该投资总监称。“从这个角度上看,中国和外国的基金公司都差不多。共同基金受到赎回的压力,对冲基金受到投资人的压力。"

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Mungerism 1

"The best way to get what you want is to deserve what you want."

The Warren Buffett CEO 9: Interview with an author, Robert P. Miles III

“Charlie Munger was right when he said that the top 25 managers at Berkshire could all die at once and Berkshire would continue successfully. Berkshire by its very culture and structure is deeper than any other conglomerate because it doesn't exist with just one CEO. Berkshire is a holding company of CEOs all operating independently of one another. Unlike every other traditional corporation, none of the CEOs has a term limit. All the Buffett CEOs have designated a successor.”

Charlie Munger in Damn Right! 9

“It’s….necessary to accommodate a lot of failure, and because no matter how able you are, you’re going to have headwinds and troubles. The Sees who created this business had failed at least once, and had seriously failed. But if person just keeps going on the theory that the life is full of vicissitudes and just does the right thinking and follows the right values it should work out well in the end. So I would say, don’t be discouraged by a few reverses”



“One of Bernard Shaw’s characters explained professional defects as follow: ‘In the last analysis, every profession is a conspiracy against the laity.’”

“To a man with only a hammer, every problem tends to look pretty much like a nail.”

Charlie Munger in Damn Right! 8

“First rate man should be willing to take at least some difficult jobs with a high chance of failure.”



“I’ve been in one aspect or another of investment management for what. 44 years or so, and trying not to disappoint anyone,” said Buffett. “And in the process of not disappointing anyone, one of the key factors is having them have the proper expectations and being knowledgeable about what they’re getting and what they’re not getting. Neither Mr. Munger nor I would function as effectively if we had tens of thousands of people who were in one way or another disappointed with us. That’s not Berkshire.”

Charlie Munger in Damn Right! 7

“You want in a group of people someone who points out that the emperor has no clothes.”


“Smart, hard-working people aren’t exempted from professional disasters of overconfidence. Often, they just go aground in the more difficult voyages they choose, relying on their self-appraisal that they have superior talents and methods.”

Charlie Munger in Damn Right! 6

“Charlie says as you get older you tolerate more and more in your old friends and less and less in your new friends.” – Warren Buffett

Warren Buffett scolded investment bankers for providing whatever advice would bring them the most income: “Don’t ask you barber whether you need a haircut,” he wrote in Berkshire’s 1982 annual report.

Charlie Munger in Damn Right! 5

“The game of investing is one of making better predictions about the future than other people. How are you going to do that? One way is to limit your tries to areas of competence. If you try to predict the future of everything, you attempt too much. You’re going to fail through lack of specialization.”

“We’re willing to forego short-term results for long-term gains.”

Charlie Munger in Damn Right! 4

“We have gotten by trying to be consistently not stupid, instead of trying to be very intelligent. There must be some wisdom in the folk saying, ‘It’s the strong swimmers who drown.’”

“You start with the accounting figures. But that’s only the start. If you try and make judgments just based on accounting figures, you will make one terrible error after another. We’ve got to understand the accounting and the implications of the accounting and understand it thoroughly and also ask a lot of intelligent questions to enable us to judge what is really going on.”

Charlie Munger in Damn Right! 3

“If you mix raisins with turds, they are still turds.”

“Being prepared, on a few occasions in a lifetime, to act promptly in scale, in doing some simple and logical things, will often dramatically improve the financial results of the lifetime. A few major opportunities clearly recognizable as such, will usually come to one who continuously searches and waits, with a curious mind, loving diagnosis involving multiple variables. And then all that required is a willingness to bet heavily when the odds are extremely favorable, using resources available as a result of prudence and patience in the past.”

Charlie Munger in Damn Right! 2

“The best way to avoid envy is to deserve the success you get.”

“The investment game always involves considering both quality and price, and the trick is to get more quality than you pay for the price. It’s just that simple.”

“Never wrestle with a pig because if you do you’ll both get dirty, but the pig will enjoy it.”

Charlie Munger in Damn Right! 1

“To finish first you have to first finish.”

“The rabbit runs faster than the fox, because the rabbit is running for his life while the fox is only running for his dinner.” – Richard Dawkins, “The Selfish Gene”

“You have to learn to be a follower before you become a leader. People should learn to play all roles.”

Berkshire's 40 Years Wisdom of Life 3

"If a management makes bad decisions in order to hit short-term earnings targets, and consequently gets behind the eight-ball in terms of costs, customer satisfaction or brand strength, no amount of subsequent brilliance will overcome the damage that has been inflicted. Take a look at the dilemmas of managers in the auto and airline industries today as they struggle with the huge problems handed them by their predecessors. Charlie is fond of quoting Ben Franklin’s “An ounce of prevention is worth a pound of cure.” But sometimes no amount of cure will overcome the mistakes of the past." -- Warren Buffett, Letter to Shareholders, Berkshire Hathaway Inc., 2005.

Preview: Berkshire's 40 Years Wisdom of Life

Berkshire Hathaway Inc., one of the greatest investment holding company in the world starts its operation since 1965 (by current management, who is Warren Buffett). Berkshire Hathaway previously was a moribund textile company which was struggled to compete with the cheaper factories outside United States. Today, the company’s subsidiaries have various businesses ranging from auto insurance, reinsurance, building materials, consumer, financial, utility and so forth. Its success lies in its asset allocator, Warren Buffett together with his partner and long time friend, Charles Munger. Every May, Berkshire would hold its annual general meeting in Omaha where its head quarter located. Omaha is a relatively small town and is located just in the center of United States. Every year, more than 20,000 shareholders of Berkshire come from all over the world gather to listen to Buffett and Munger’s life wisdom. The meeting often quoted as “Woodstock of Capitalists” It’s my pleasure to have an opportunity to share with you their wisdom. Stay tune……

Note: “Woodstock” is a term used for the music lovers. It originated from “Woodstock Music and Art Festival” which was held in New York in 1969. It is widely viewed as the most famous rock festival ever held and it represents “hippie era” for that period.

Worldly Wisdom From Charles Munger III

“Occasionally, scaling down and intensifying gives you the big advantage. Bigger is not always better.

The great defect of scale, of course, which makes the game interesting-- so that the big people don't always win-- is that as you get big, you get the bureaucracy. And with the bureaucracy comes the territoriality-- which is again grounded in human nature.

And the incentives are perverse. For example, if you worked for AT&T in my day, it was a great bureaucracy. Who in the hell was really thinking about the shareholder or anything else? And in a bureaucracy, you think the work is done when it goes out of your in-basket into somebody else's in-basket. But, of course, it isn't. It's not done until AT&T delivers what it's supposed to deliver. So you get big, fat, dumb, unmotivated bureaucracies.

They also tend to become somewhat corrupt. In other words, if I've got a department and you've got a department and we kind of share power running this thing, there's sort of an unwritten rule: "If you won't bother me, I won't bother you and we're both happy." So you get layers of management and associated costs that nobody needs. Then, while people are justifying all these layers, it takes forever to get anything done. They're too slow to make decisions and nimbler people run circles around them.

The constant curse of scale is that it leads to big, dumb bureaucracy-- which, of course, reaches its highest and worst form in government where the incentives are really awful. That doesn't mean we don't need governments-- because we do. But it's a terrible problem to get big bureaucracies to behave.

So people go to stratagems. They create little decentralized units and fancy motivation and training programs. For example, for a big company, General Electric has fought bureaucracy with amazing skill. But that's because they have a combination of a genius and a fanatic running it. And they put him in young enough so he gets a long run. Of course, that's Jack Welch."

Worldly Wisdom From Charles Munger II

“So you have to figure out what your own aptitudes are. If you play games where other people have the aptitudes and you don't, you're going to lose. And that's as close to certain as any prediction that you can make. You have to figure out where you've got an edge. And you've got to play within your own circle of competence.”

“To the man with a hammer, every problem looks like a nail."

Worldly Wisdom From Charles Munger I

This is a link of the speech of Charles T. Munger, Vice Chairman of Berkshire Hathaway Inc. to his audience in USC Business School in 1994.

The speech is quite long though it's an essence of a brilliant man equipped with multi-disciplinary knowledge.

Charles T. Munger often quoted as incarnation of Benjamin Franklin, one of the very few brilliant man equipped with multi-disciplinary knowledge as well.

Some excerpts from the speech:

“Just the way if you want to become a golfer, you can't use the natural swing that broad evolution gave you. You have to learn-- to have a certain grip and swing in a different way to realize your full potential as a golfer.”

“If you always tell people why, they'll understand it better, they'll consider it more important, and they'll be more likely to comply. Even if they don't understand your reason, they'll be more likely to comply.”

Manager Compensation

It’s how amaze a lousy, underperforming company gives their managers (cum director most of the time in some companies) a handsome paid plus huge bonuses. As far as I could understand, the objective of giving out bonuses is when a company performs an above average result compared to its peer. I am puzzle what’s the goal of giving out this huge bonuses if the manager does not perform. I also wonder is it a company corporate culture where the managers receiving handsome paid no matter how’s the company he manages perform, being it good or bad. If this is a case, I would not hesitate to run far away from the company, not mention to be its investor.

Let’s examine paid received by top management of Wesco Financial Corporation, including Chairman, President and CEO who is Charles T. Munger

1) Jeffrey L.Jacobson Salary Bonus
Vice President and
Chief Financial Officer
of Wesco and
MS Property Company
2003 186,000 -
2004 204,000 -
2005 210,000 -

2) Robert E.Sahm
Vice President of Wesco
and President of MS
Property Company
2003 188,400 16,100
2004 198,000 16,900
2005 207,900 17,750

3) Charles T. Munger
Chairman of the Board,
President and CEO of Wesco
2003 - -
2004 - -
2005 - -

Source: www.wescofinancial.com

The following graph compares the value at each subsequent year end of $100 invested in Wesco capital stock on December 31, 2000 with identical investments in the Standard and Poor’s (“S&P”) 500 Stock Index and the S&P Property-Casualty Insurance Index, assuming reinvestment of dividends.

Need me to say more? Compare the figures with the companies you invested....

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