Finance
Fund manager says: ‘Two worlds rarely collide’
Warren Buffett-LED Berkshire Hathaway, Inc.‘s (NYSE:BRK) (NYSE:BRK) Q10 report filed with the SEC showed the investment holding company’s cash position increased to $277 million. The cash buildup sent social media into an uproar for some Tesla, Inc. (NASDAQ:TSLA) fans fervently hoped the investment guru would shift some of it into the electric vehicle maker’s stock.
What happened: “Buffett is a value investor. $TSLA is a growth stock,” said the Managing Partner of The Future Fund LLC Gary Black in a post on
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Growth stocks, on the other hand, are expected to generate above-market returns and these stocks trade at high price-to-earnings ratios. Their high valuations are only justified by the returns they can generate in the future.
Despite Tesla stock’s extended decline since late 2022, it is still trading at an elevated price-to-earnings ratio of 84.75, according to Yahoo Finance’s database.
Source: Benzinga Pro data
Never shall the Twain meet: “The two worlds rarely collide,” Black said in the post, referring to Buffett’s ideology and Tesla’s stock nature. To clarify, the fund manager said that Buffett bought first Apple Inc. (NASDAQ:AAPL) stock when it traded at less than 12 times earnings BYD Co. Ltd (OTC:BYDDY) (OTC:BYDDY) stock when it traded at less than 10 times earnings.
Tesla “is not his type [of] shares,” Black said.
By the way, CEO of Tesla Elon Musk has disliked Buffett and his trusted late lieutenant in the past Charlie Munger had overlooked Tesla as an investment option. Musk has mentioned a failed meeting with Munger in 2009 about a possible Tesla investment.
Every time Berkshire’s massive cash position is discussed on social media, the world’s richest man has indirectly pushed Buffett to take a stake in Tesla. Although Buffett disdained Tesla, he admired Musk. “Elon is a brilliant, brilliant guy and I would say he might score over 100%,” Buffett said at a shareholder meeting in Berkshire. “He dreams about things and his dream has a basis.”
Tesla ended Friday’s session down 4.24% at $207.67 Benzinga Pro Data.
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This article Berkshire Hathaway’s massive $277 million cash hoard reignites Tesla investment talk: Fund manager says ‘Two worlds rarely collide’ originally appeared on Benzinga.com
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