Wednesday, September 29, 2010

Warren Buffett, Obama Adviser

Legendary investor Warren Buffett was an adviser to Barack Obama’s presidential campaign. From time to time he continues to talk with Obama.

One of Obama’s signature campaign themes was the development of green technology to shift America and the world from heavy use of polluting carbon-based power to electric power. Electric vehicles promise a massive reduction in carbon emissions.

Warren Buffett is in China today (September 27, 2010). His first stop is Shenzhen, a city of 9 million that was formerly a small village, which Chinese leader Deng Xiaopong commissioned as China’s first Special Economic Zone in 1982. Shenzhen is headquarters of BYD, a Chinese electric vehicle manufacturer, in which Buffet thas taken a 9.89% stake for $230 million. Buffet said that he believes that the battery and car maker will play an important role in new energy technology.

Is there some reason that Buffett, an Obama adviser, has made this strategic investment in China, America's economic rival in green technology?

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3 comments :

Scott said...

Here's a thought: Buffett invests in things he thinks are undervalued and have potential for high return. When he feels charitable, he gives money to the Gates Foundation, not companies that don't have good potential. Throwing money away isn't patriotic.

Offshore Lawyer said...

Two answers (which I suspect you already know, but you are having some fun here). (1) Buffett goes where the good investments are. If energy were priced correctly in the United States there'd be a bigger incentive to make analogous investments here. But we have not managed to agree a national energy policy yet. (2) Buffett is a big investor in green energy in the US through Berkshire's midwestern energy affiliate, MidAmerican, the owner of huge wind generation capacity in Iowa and bordering states.

Buffett said...

I saw this article saying Warren Buffett has not generated any alpha in 10 years:

Warren Buffett's Alpha and Returns

Does this make sense to you?