Charlie Munger vs. Cathie Wood on Tesla Stock: Who Is Right?
Berkshire Hathaway Vice Chair Charlie Munger recently called BYD his favorite stock ever and said that it is so far ahead of Tesla in China "it's almost ridiculous."
Cathie Wood issued a rebuttal on Twitter, saying that Munger doesn't "understand" how Tesla's technology innovations will cause an increase in demand.
Cathie Wood issued a rebuttal on Twitter, saying that Munger doesn't "understand" how Tesla's technology innovations will cause an increase in demand.
$Tesla(TSLA.US$ VS $BYD Company ADR(BYDDY.US$
Wood believes that many market participants are unable to see the potential of Tesla's technology for optimizing future production costs. In theory, this should result in an increased demand for the company's EVs.
On the other hand, Munger believes that BYD's advantage in China will keep it ahead of its peers, including Tesla.
An important detail to keep in mind is that even though BYD sells more cars than Tesla today, it makes eight times less profit per vehicle. On average, Tesla makes $9,761 per vehicle, and BYD makes $1,190.
Tesla has been lowering prices and offering incentives to attract more customers. BYD is entering several giant new markets and has very ambitious plans for the next few quarters.
Both companies are ahead of the other peers in the EV space and continue to grow and multiply their profits. Moreover, both stocks trade at nearly identical price-to-earnings (P/E) ratios. Tesla trades at 57 times P/E, while BYD trades at 58 times.
Wood believes that many market participants are unable to see the potential of Tesla's technology for optimizing future production costs. In theory, this should result in an increased demand for the company's EVs.
On the other hand, Munger believes that BYD's advantage in China will keep it ahead of its peers, including Tesla.
An important detail to keep in mind is that even though BYD sells more cars than Tesla today, it makes eight times less profit per vehicle. On average, Tesla makes $9,761 per vehicle, and BYD makes $1,190.
Tesla has been lowering prices and offering incentives to attract more customers. BYD is entering several giant new markets and has very ambitious plans for the next few quarters.
Both companies are ahead of the other peers in the EV space and continue to grow and multiply their profits. Moreover, both stocks trade at nearly identical price-to-earnings (P/E) ratios. Tesla trades at 57 times P/E, while BYD trades at 58 times.
$ARK Innovation ETF(ARKK.US$ VS $Berkshire Hathaway-A(BRK.A.US$
As a side note, those who think Munger is outdated should beware. Going head-to-head against Berkshire Hathaway rarely ends well.
In 2021, Cathie Wood was the toast of Wall Street, reporting gains of 170% since the start of the pandemic. But since then, those gains have gone down the drain.
Check out the chart below, which shows how Berkshire Hathaway has outperformed Wood's ARK Innovation ETF:
As a side note, those who think Munger is outdated should beware. Going head-to-head against Berkshire Hathaway rarely ends well.
In 2021, Cathie Wood was the toast of Wall Street, reporting gains of 170% since the start of the pandemic. But since then, those gains have gone down the drain.
Check out the chart below, which shows how Berkshire Hathaway has outperformed Wood's ARK Innovation ETF:
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
Read more
Comment
Sign in to post a comment
lessismax : I respect Charlie Munger, but he is absolutely wrong about BYD and Tesla. BYD's advantage is that it only has a Western Korean emperor behind it. Moreover, Charlie Munger's pursuit of interests made him highly evaluate the socialist government of West Korea. I am also very disappointed
The Value Investor : No one would have listed to Wood if she didn’t do well for a single year or two. she got lucky during a bull market. Value investors like myself (look on my profile’s paperfolio) , charlie munger, warren buffet, and peter lynch, outperform the market more times than not. We do not have fluke years or get lucky. We don’t lose 70-80% in several of our stocks, that’s simply unacceptable. Stop listening to Crashie Woods. You should always prefer a long stable track record over a sudden spike.
Value investing is the only type of investing. There is no other (good) way. Trading is not a form of investing so that doesn’t count.