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Warren Buffett's former right-hand man — who has now passed away — once described Elon Musk as a gifted but weird individual, and touted Chinese carmaker BYD as a serious threat to Tesla and one of the best investments of his career.
"My policy on Elon Musk is that he's a very talented man but also peculiar, so I don't buy him and I don't sell him short," Charlie Munger said during Daily Journal's annual meeting in February, which was aired live by CNBC.
"He's a smart man — sometimes," the 99-year-old investor and Berkshire Hathaway vice-chairman added. "Like all the rest of us."
Munger recognized the unlikely success of Tesla in the fiercely competitive automotive industry. But he suggested BYD is pulling ahead of Musk's company in the electric-vehicle race.
"Even if you're a genius like Musk is in some ways, there's always some little BYD that comes out and does better," he noted.
The billionaire stock picker has previously praised Musk for his innovations in clean energy and space transportation. Meanwhile, Buffett has traded both compliments and barbs with Musk, who has described the Berkshire chief's job of allocating capital as dull.
Munger, who persuaded Buffett to bet on BYD and also bought the carmaker's shares for Daily Journal, described it as a once-in-a-lifetime investment.
"I have never helped do anything at Berkshire that was as good as BYD," he said, noting the conglomerate's $232 million investment in 2008 soared in value by more than 30 times within 15 years. "That's a pretty good rate of return."
Berkshire has pocketed well over $1 billion in profits by selling roughly a third of its BYD stake in recent months. Similarly, Daily Journal raked in 15 times what it invested when it sold a chunk of its BYD stake at the end of 2021.
Munger lauded BYD for growing rapidly in its home market and leaving Musk in the dust. "BYD is so much ahead of Tesla in China it's almost ridiculous," he said.
The billionaire investor pointed out that Tesla cut its car prices in China last year, while BYD was able to raise prices. He also noted BYD's auto division made over $2 billion in after-tax profits in the country last year.
"Who in the hell makes $2 billion as a brand-new entrant in the auto business, for all practical purposes?" Munger exclaimed. "It's incredible what happened."
This story was originally published in February 2023.
