Elon Musk says Warren Buffett missed the best stock

Elon Musk doesn’t seem too impressed with Warren Buffett’s stock picks in the S&P 500. And he – of course – took to Twitter to say so.


answer to a Post from March 26th show how Berkshire Hathaway‘S (BRKA) portfolio has grown from 1994 to 2022, Musk has belittled the Oracle of Omaha’s performance. Musk tweeted, “Or he could have just invested in Tesla with a $200 million market cap when he had the opportunity.”

According to Musk, Charles Munger, Buffett’s partner at Berkshire Hathaway, missed an opportunity to invest in the company “in late 2008.” Tesla (TSLA) when it was only worth $200 million, Musk tweeted Feb. 25. Tesla is now worth nearly $600 billion. And Berkshire Hathaway sits with more than $128 billion in cash and short-term funds to invest.

And that was a big mistake in Musk’s book. Musk is now worth $177 billion, making him the second richest person in the world. says Bloomberg. And Buffett? He’s worth $105 billion, putting him in 5th place.

Musk vs Buffett

Maybe Musk, CEO of the electric vehicle manufacturer Tesla (TSLA), takes offense that his stock isn’t part of Buffett’s famous 63-stock portfolio. After all, Tesla has a 1.6% weighting in the S&P 500, making it the eighth most important stock in this key index. (Remember that Buffett owns a sizable chunk of index funds that own the S&P 500).

Or maybe Musk is pissed that Buffett owns two of Tesla’s main competitors: the Chinese electric-car maker BYD (BYD) and traditional vehicle manufacturer General Motors (GM). Berkshire Hathaway owns 12% of BYD and nearly 4% of GM.

But there’s no question that investing in Tesla would have delivered better results than Buffett. A $200 million investment in Tesla at the end of 2008 would be worth $599 billion today. That’s an amazing gain of 299,208%. By contrast, Berkshire Hathaway shares are up 373% since then. Yes, that beats the S&P 500’s 339% rise over the same period, but it’s a far cry from what Tesla stock would have delivered.

Tesla stock vs. Berkshire Hathaway

If Buffett didn’t buy Tesla in 2008, what did he buy instead? Electric utility MidAmerican Energy was a new position in 2008 and is now fully integrated into Berkshire Hathaway’s energy division. He also took a position at Swiss Re amid the financial crisis, says S&P Global Market Intelligence.

But it’s hard to imagine leaps surpassing Tesla’s. Tesla shares are up 13,855% since their first day of trading in July 2010. During that time, Berkshire Hathaway stock is up just 289.6%. That too beats the S&P 500’s 264% gain, but only marginally.

However, here’s the rub. Tesla’s returns could surpass those of Berkshire Hathaway. But the hidden costs are a risk charged. Tesla shares, for example, are down more than 45% from the S&P 500’s January 2022 peak to the 2022 bottom. Berkshire Hathaway shares, on the other hand, fell just 12.1% — half of what the S&P 500 lost over the period.

And that explains why Buffett’s Berkshire Hathaway has an impressive beta of just 0.96, meaning it’s slightly less risky than the market. A beta of less than 1 indicates lower risk than the S&P 500. Tesla, on the other hand, carries a beta of 1.65, or 65% more risk than the market.

Buffett never said he was perfect. “I’ve made many mistakes over the years,” he wrote Berkshire Hathaway 2022 Annual Report. “As a result, our extensive collection of companies currently consists of a few companies with truly exceptional economics, many with very good economics, and a large group that are marginal.”

But Musk thinks he knows what Buffett should do with the billions he has sitting around. “Begins with a T…,” he tweeted.

Tesla vs. Buffett, in numbers

PursuesymbolChange from Tesla IPOAscension from the end of 2008yieldBeta (higher is riskier)
Berkshire Hathaway (BRKA)291.1%375.2%0%0.96
Tesla (TSLA)13,879.6%299.208%*0%1.65
SPDR S&P 500 ETF Trust (SPY)264.7%338.4%1.6%1.02
Sources: IBD, S&P Global Market Intelligence, * – based on a “late 2008” estimate by Musk Tweet

Follow Matt Krantz on Twitter @dull wreath


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