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Buffet Prefers Chinese Consumer Goods Exporters

05-07 11:50 Caijing
At the annual shareholder’s meeting for Berkshire Hathaway on Saturday, Warrant Buffet said he would prefer Chinese companies that export quality goods, especially consumer goods

At the annual shareholder’s meeting for Berkshire Hathaway on Saturday, Warrant Buffet said he would prefer Chinese companies that export quality goods, especially consumer goods, when asked about how long it would take for China to see a great company like Coco Cola.

“China’s got some huge companies and they may have clips in market value, some of the ones is as big as Coca Cola,” Buffet added.

Berkshire vice chairman Charlie Munger, who also answered questions from shareholders at the meeting, said there are already some great Chinese companies though he could not spell their names.

Mr. Munger also talked about Berkshire Hathaway’s Chinese investment in electric auto maker BYD Company. China has a huge auto market which is BYD’s main focus, while BYD’s first important step in entering the U.S. market could be California’s car rental business, he said.

As for how many cars BYD are expected to sell in the U.S. in the near future, Munger predicted that the number would be very small.

He added that he expects more electric vehicles, but no significant changes.

Here are some key notes at the annual shareholder’s meeting:(From Gurufocus)

In the past you have made a few investments in China, Petrol China (PTR), BYD, given growing importance, what advice would you give to Chinese leadership?

Charlie: We’re not taking much time giving advice to China. If you stop think about it, China’s doing very well, to some extent we should seek advice there instead of giving.

Warren: We found almost it useless in 60 years in investing to give advice to anyone.

Charlie: It’s amazing how little influence we had when we’ve had 20% of the stock, people have this illusion that the beauty of Berkshire is that we’ve created system that doesn’t require much control.

Warren: If you look at our 4 largest investments, worth $50 billion today, held some for 25 years, the number of times that we have talked to the CEO of those companies doesn’t average more than twice a year, we are not in the business of giving them advice. If we thought that the success of our investment depended on them following our advice, we’d go on to something else.

How are you feeling?

Warren: I feel terrific. I always feel terrific. I love what I do, I work with people I love. It’s more fun every day, basically I think I have a good immune system, my diet is such as any fool can plainly say, I’m eating properly. All i can say is that it works. and I have 4 doctors, least a few of them own BH. My wife and my daughter and I listen to 4 of them, they describe various alternatives. The ones that they recommend do not involve a day of hospitalization, they don’t require me to take a day off from work, the survival numbers are way up, 99 and a half percent for 10 years. Maybe I’ll get shot by a jealous husband, this is a really minor event.

Charlie: I rather resent all this attention and sympathy that warren has, I probably have more prostate cancer than he does. I don’t know because I don’t let them test for it. Anyways, i want the sympathy.

Warren: My secretary was getting too much attention, so i had to throw the spotlight back to myself. The med center is about 2 minutes away, I may have a little less energy but I do fewer dumb things.

Given that you’re now in IBM, are there any companies? Is Google inevitable? What are the one or two things about Google and Apple that you feel?

Warren: Well both are extraordinary companies, they look very tough to dislodge where they have their strengths, I would not be at all surprised to see them worth a lot more money 10 years from now, but I would not want to own either one of them. But I would short them either.

Charlie: I think we can fairly say that other people will always understand those two companies better than we do.

Warren: The chances of being way wrong in IBM are probably less than being way wrong for Google or Apple, but that doesn’t mean that the latter two aren’t going to do as well as IBM. We wouldn’t have predicted what would happen with Apple 10 years ago, and it’s very hard for me to predict them 10 years from now.

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