Several media reports have appeared today suggesting that Warren Buffett’s visit to China next week may be due to concerns regarding Berkshire Hathaway’s investment in BYD. Most of the reports cite a Reuters article which seems quite unconvincing. While BYD
BYD has encountered a few rough patches lately with cuts to its sales target for 2010 and second quarter profits that were significantly below consensus estimates. These developments have resulted in a sharp drop in BYD’s share price with the ADRs falling close to 52 week lows. Adding to the negative news, Bloomberg reports that China’s Ministry of Land and Resources has accused BYD of illegally building seven factories on 112 acres of farmland that was zoned for agricultural use. The government will make a decision regarding the punishment for the company prior to the end of September. Read this article for more details.
According to an article in The Chicago Tribune, Lou Simpson is planning to retire from GEICO at the end of 2010. Mr. Simpson is President and CEO of Capital Operations. Tony Nicely is Chairman, President, and CEO of GEICO’s insurance operations. Like other Berkshire Hathaway insurance subsidiaries, insurance underwriting operations and investment decisions are handled separately with Mr. Simpson having broad autonomy over GEICO’s investment portfolio.