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Some BYD Factories Confiscated


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Guest ValueCarl

Warren, Charlie, Bill and the rest of their crew, are lucky, "according to the government" that they weren't considered being there "illegally," to be "confiscated" as state owned property, too, and placed in prison during their recent trip.

 

That's my long standing prediction for Jimmy Rogers' family, a seditiousness, treasonous man in his own right, before the next Great War ends. imo   

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Guest ValueCarl

When watching one of those videos, Mr. Buffett along with Mr. Munger lead me to disappointment, once again!

 

Why? He told the world that they were not paying attention to currencies!!!!!!!!!!!!!!!!!

 

I did the math during the time of their investment which was based in the foreign currency, and they made a fortune as a result of conversion prior to US investors flocking to the ADR further bolstering their returns in "follow the leader," it's a pyramid and "we're betting on the US," NOT, order.

 

Where's Alice? Go ask Alice!  ;)

 

 

 

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Guest ValueCarl

He's right about building constructive businesses as opposed to building ticking time bombs on "derivative desks" controlled by degenerate gamblers with math and finance degrees.

 

He's damn wrong about China's success, and how that will play out, on the other hand.

 

Their success I will coin, "Serendipity Capitalism," where far away provinces sneakily developed industry away from the watchful eyes of their dictators. This history of this decentralized phenomenon is well documented in modern finance books still on the shelves. When their dictators began seeing the results, they marveled over it as they seem to be doing today, except as respects taking actions against capitalism like at BYD, just announced.

 

Mr. Munger is a wise enough old hoot owl to know that, zebras don't change their stripes. "It's so simple."

 

He was much less optimistic about this company ruling the auto world than at his last WESCO shareholder meeting the world will ever see, also.

 

I like Mr. Munger a lot, but if God forbid, the Li's ever trump the Munger's in wealth, and they "incarcerate" him for being "Munger," I'm sure he won't write it off in his lonely jail cell as, "so be it" the way he described it at Cal Tech. He will also probably wish he was in the US Air Force again, in order to be the one dropping the bombs! IMO           

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>I don't quite get what you guys are complaining, but it has relatively little impact to BYD in terms of production, earnings, or enterprise value impairment

 

This is not a good sign. In a country like China ( or many other countries outside the US as Microsoft found out painfully with the EU ) - you dont win fighting with the government. The fact that government is after you even in a minor way may be an indication of larger things to come.

 

 

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The issue, as I understand it, if not government coming after BYD. It's really central government slapping on local government. It seems that Shanxi province and Xi'an city government went aggressive and "extra mile" in granting BYD the license and land to build its factory, which violates some farmland usage policy set by central government. Unfortunately it's bad timing as China is clam down hard on land usage and real estate, they had to do something to show they're serious. But the penality to both BYD and local government officials are minimal.

 

I won't be surprised BYD will get back something, maybe even the confiscated factory after some time, when the news is over. 

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It's also interesting to note that the investigation has been going on since July and decision has been made by 9/30, but the goverment didn't go out and announce it until Buffett/Gates/Munger have left China and news on their trip have settled down. The goverment has been supportative and is courting BYD, Buffett & co extreamly well, so well that they're holding back announcement to show their respect and support. At the same time they have to show something that they've got balls for these kind of violations and to deter future violations.

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>Unfortunately it's bad timing as China is clam down hard on land usage and real estate, they had to do something to show they're serious.

 

The very fact this is coming out is kind of odd - you typically see it resolved before it hits the news - especially in a country like China.

 

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I think the land is granted to BYD before the hard brake on land & real estate. Also I guess they can and will have backdoor negotiations and good things may come out later, but for now, they have to show that they've got balls for these kind of violations and to deter future violations, even it's BYD and Buffett, and actually they serve as perfect case  :)

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China has little choice but to make an example of companies like BYD who build on land designated for agriculture. There are few things more dear to the Chinese than arable land now, and the Central Govt. is acutely aware of this. As it is, they are going to be a huge net importer of food, oil and other natural resources in coming years, but their current arable land is down to the level that it is a national security issue, so the BYD situation, while it seems harsh, is not surprising.

 

I have to say that I'm a bit surprised to hear the reaction to Charlie Munger's remarks. I think that he is simply a person who sees the situation from a perspective of what's rational, and I have to agree with him that the Chinese government has behaved much more rationally than our own in recent years. Learning from what works (regardless of borders) is always a sensible strategy.

 

Just my $.02.

 

 

 

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When watching one of those videos, Mr. Buffett along with Mr. Munger lead me to disappointment, once again!

Munger's comments on China are quite frankly disgusting.

 

 

I watched the clip.  What was disgusting regarding what Munger said about China?  Did I miss something or is there some deeper fundamental meaning there or do you have some sort of personal connection to China?  Munger was complimentary to how China is managing their growth using a combination of Communism and Capitalism.  IMO, nothing in the clip that Charlie said struck me as "...frankly disgusting."  What am I missing?  Is it a human rights issue, communism issue, suggesting that China is doing a better job than America or do you hate engineers  :)

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Guest ValueCarl

You seem to have applied one other's comment about Mr. Munger to me incorrectly. Initially, my disappointment stemmed from their Great Lie about, "We don't care about currencies!"  Go back and read the thread! As for quality engineers X the globe but with more focus on math and science and churning out better engineers in America, I agree with Charles T., as well as Dr. Byrne. 

 

On the other hand, Munger has turned "Chinese" in his old age. Maybe that rapper friend of Buffett's can create a new song like, "I think I'm turning Chinese, I think I'm turning Chinese, I really think so!"  ;)   

 

http://www.youtube.com/watch?v=gEmJ-VWPDM4

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I watched the clip.  What was disgusting regarding what Munger said about China?  Did I miss something or is there some deeper fundamental meaning there or do you have some sort of personal connection to China?  Munger was complimentary to how China is managing their growth using a combination of Communism and Capitalism.  IMO, nothing in the clip that Charlie said struck me as "...frankly disgusting."  What am I missing?  Is it a human rights issue, communism issue, suggesting that China is doing a better job than America or do you hate engineers  :)

Munger has fallen for the propaganda of the Chinese government, hook, line and sinker. Centrally planned economies run by politicians are always going to fail, as a student of history, I am surprised that Munger has neglected this.

 

Anyway, Vitaliy Katsenelson has recently written about his impressions on China, I agree with a lot of what he has said. http://www.marketoracle.co.uk/Article23491.html

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Guest HarryLong

Warren, Charlie, Bill and the rest of their crew, are lucky, "according to the government" that they weren't considered being there "illegally," to be "confiscated" as state owned property, too, and placed in prison during their recent trip.

 

That's my long standing prediction for Jimmy Rogers' family, a seditiousness, treasonous man in his own right, before the next Great War ends. imo    

 

I am truly amazed to observe your "thought" process. Hmm, let me get this straight, Jim Rogers believes our national debt is too high, does not believe bankers should be bailed out, and speaks out publicly about how dangerous it is that we're destroying our country and losing out competitiveness, and now he is "treasonous?"

 

Our best critics are our best friends. It's when people stop trying to convince you that you're wrong, that they've given up on you.

 

By your "logic" the Founding Fathers must have all been traitors as well. Have you ever read what Thomas Jefferson had to say about banking and debt, or is History a petty inconvenience for you? Of course, Jefferson was well aware of the dangers of leverage, since he himself was heavily in debt throughout his life, so he had first-hand experience with the the downside of borrowing to maintain a lifestyle.

 

 

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Guest ValueCarl

You can ignore the message created by this messenger as often as you choose. How many messages aren't even opened or read by participants on this board? It's not nice to attack messengers speaking their piece in a form of peace for enlightenment.  

 

What remains incoherent about the fact that, throughout the ages, "owners of capital" have exploited and will continue to exploit "labor"? Is this "heresy" to you seekers of, "The Secrets of the Temple"?  As a matter of fact, that's a good reading book for you to see the ease of money's creation by such "Money Masters." Volker is featured in such work.

 

Otherwise, this messenger must believe that, "You can't handle The Truth!"  

 

Do not curse the religion of your Money Gods, for religion in itself has made the capitalists very wealthy over long durations of time.

 

Why is it hard to see that those who command "political power" help such "owners of capital" have their way in doing so under the disguise that they are "agents for change"?  Has money some how lost its power to influence and control?

 

After all, if not for "dirt cheap labor," would the great marvels across this globe have ever been created? Start with the ancient pyramids and move on throughout history to the modern era including China, as well as India. Wouldn't a slave be unwilling to work for his master, in most instances, if a slave's wealth was on par with his master's?

 

Let's get back to the subject matter on why Buffett and Munger are exploring China where the laws of "unintended consequences" will certainly prevail, using history as a guide.  :-*

 

 

     

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You can ignore the message created by this messenger as often as you choose. How many messages aren't even opened or read by participants on this board? It's not nice to attack messengers speaking their piece in a form of peace for enlightenment.  

 

What remains incoherent about the fact that, throughout the ages, "owners of capital" have exploited and will continue to exploit "labor"? Is this "heresy" to you seekers of, "The Secrets of the Temple"?  As a matter of fact, that's a good reading book for you to see the ease of money's creation by such "Money Masters." Volker is featured in such work.

 

Otherwise, this messenger must believe that, "You can't handle The Truth!"  

 

Do not curse the religion of your Money Gods, for religion in itself has made the capitalists very wealthy over long durations of time.

 

Why is it hard to see that those who command "political power" help such "owners of capital" have their way in doing so under the disguise that they are "agents for change"?  Has money some how lost its power to influence and control?

 

After all, if not for "dirt cheap labor," would the great marvels across this globe have ever been created? Start with the ancient pyramids and move on throughout history to the modern era including China, as well as India. Wouldn't a slave be unwilling to work for his master, in most instances, if a slave's wealth was on par with his master's?

 

Let's get back to the subject matter on why Buffett and Munger are exploring China where the laws of "unintended consequences" will certainly prevail, using history as a guide.  :-*

 

 

     

 

Ok. You have made your point.  Move on.  Perhaps start a new thread called unintended consequences (please use quotes) and if someone is interested in going down that road with you, then great.

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  • 2 weeks later...

Has anyone on here spent much time in China?

I've toured 4 cities, but hardly understand it.

 

The more you try to understand it, the less it makes sense.

 

Just got back from a trip to China last week myself. I think the drive, determination and entrepreneurial spirit of the people are clear to see. The other thing that strikes you, if you compare China today to 5, 10, 20 years ago, is that the pace of progress is breathtaking.

 

Although much more needs to still be done, the infrastructure is in some respects world class. And, the movement towards "greenness" also surprised me given all the talk about how environmentally irresponsible China is - just observe the number of electric motorbikes/scooters and the presence of trash cans for recyclables.

 

The politics remains communist but it is clear that the economy is increasingly capitalistic. Students of western history may see problems with the Chinese model but students of late 20th century history of the Far Eastern tiger economies will see many parallels between what is happening in China with what happened in Korea, Singapore, Taiwan, and HK. These tiger economies combined autocratic govt with free enterprise economies to achieve amazing rates of growth, the same as we are seeing in China.

 

Of course, many problems remain - corruption, political discontent, wealth disparity - but it is equally important to understand that the Chinese mindset has been conditioned by a very long history of subjugation under non-democratic rule. You only have to observe how Chinese migrants act in societies where they are minorities to understand their relative indifference to political freedoms. As long as they see opportunities to improve their lot in life (through education or enterprise), they are quite happy to leave politics alone. You rarely hear them grumble about what the govt should do for them; they just suck it up and get on with life, no matter how tough a hand they have been dealt.

 

I have no doubt that the Chinese economy will suffer setbacks from time to time as its outdated institutions and systems try to catch up with the breakneck pace of economic development - the tiger economies suffered the same - but the drive of the common people to build better lives for themselves will provide the impetus for the economy to continue on a long term trend of growth. All the govt has to do is to ensure that the right incentives remain.

 

For me, the challenge is to identify companies and managements that we trust enough to be long term investors in. Corporate governance remains problematic but it seems better now than before. Again, I believe that this will improve over time - the Chinese are no different from others; initially, they may value money over reputation; once they have accumulated enough wealth, they will start to worry about legacy and reputation.

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