Is Warren Buffett Buying Tesla Stock?
Is Warren Buffett Buying Tesla Stock?
This is a huge “surprise” for many Tesla investors. Warren Buffett is now using Tesla’s S and E stock to buy the stock in his Berkshire Hathaway stock portfolio. Is this a mistake?
On Friday, as usual, Warren Buffett purchased a secondary primary stock, just in case. It’s not a big deal, but it’s worth noting. As of Friday, the price of the “secondary” Tesla stock is higher than Berkshire Hathaway’s primary stock.
I believe this can be understood if you take a second to compare the two stocks. Both the S and E of both companies are publicly traded companies that have been generating considerable cash flow. Also, both have a proven record of success and a loyal customer base.
The U.S. auto market has been in shambles for many years. However, Tesla has an excellent product, sales are expected to grow, and market share is growing. Tesla’s stock is a “safe” investment. So it makes sense to hold a piece of Tesla’s stock in your portfolio.
On the other hand, Berkshire Hathaway’s British Treasury stocks are, by far, Berkshire’s worst performing stock since the start of their “Rich Dad” program. This tells me that the trust has bought some of Berkshire’s “dead” (secondary) holdings to try to buy a little extra luck.
While the complete financial statements of both companies aren’t available yet, I would assume that Tesla’s losses will exceed those of Berkshire. So your timing may be a little off when buying into either company.
Still, Berkshire’s trading volume on the BT and T stock is probably limited, so you are much more likely to make a profit if you hold Berkshire stock rather than the British Treasury stock. While the BT and T stocks aren’t “going anywhere”, I suspect you’ll do well with either one of them over the next couple of months. It’s just a matter of timing and having the wrong stock in your portfolio right now.
In addition to my own research, I’ve been part of an investment research team for several years now. We’ve studied a wide variety of stocks and managed a number of portfolios over the years.
Related Posts
Ganassi’s XE car to carry Hummer styling after GMC tie-up →
Ganassi’s XE car to carry Hummer styling after GMC tie-up →
Ganassi’s XE car to carry Hummer styling after GMC tie-up →
