New moves from Berkshire Hathaway; Wise words from Charlie Munger; List of the world's largest companies; Amazon is poised to surpass Walmart as the largest company by revenue; Freezing your credit to combat scammers
1) Even at age 95, with his phenomenal 55-year run as the CEO of Berkshire Hathaway (BRK-B) coming to an end in three months, Warren Buffett is still making big moves...
On September 21, CNBC reported that Buffett sold the remainder of Berkshire's stake in Chinese electric-vehicle manufacturer BYD.
This chart from the CNBC article shows how Berkshire's BYD stake has shrunk in recent years:
As the article notes, the late Charlie Munger was behind Berkshire's initial purchase 17 years ago:
At the 2009 annual meeting, he told shareholders that even though it looked like "Warren and I have gone crazy," he saw the company and its CEO, Wang Chuanfu, as a "damn miracle."
It was an incredible call. BYD shares increased by around 4300% during the years Berkshire owned them.
And yesterday, the Wall Street Journal reported that Buffett is about to spend $10 billion buying Occidental Petroleum's (OXY) petrochemical business:
The company has a market value of around $46 billion and already counts Berkshire as its largest shareholder.
Occidental's petrochemical division, OxyChem, manufactures and sells chemicals for use in applications including chlorinating water, recycling batteries and producing paper. The unit generated nearly $5 billion in sales in the 12 months ended in June.
Assuming talks don't fall apart, the OxyChem deal would be Buffett's second big bet on chemicals. In 2011, Berkshire acquired specialty-chemicals producer, Lubrizol, for close to $10 billion, including debt.
It's remarkable to see a 95-year-old still at the top of his game!
2) It's sad that Munger didn't live to do a well-deserved victory lap on BYD. Speaking of the wise man...
Creative Planning's Peter Mallouk recently posted this short clip on social platform X. In it, Munger imparts a great life lesson:
3) Mallouk also posted this list on X last week. It shows the largest global companies by market cap as of mid-September. And you'll notice that Berkshire is high on the list...
It's now the ninth-largest U.S. company and 11th largest worldwide by market cap. (The latest market cap rankings are always posted here.) Take a look at Mallouk's post:
It's mind-boggling how tech-heavy and U.S.-heavy the list is.
This is one of the reasons why I recently sold 60% of my holdings in an exchange-traded fund ("ETF") that tracks the S&P 500 Index and replaced two-thirds of that with an equal-weight S&P 500 ETF and one-third with an international-focused ETF.
(If you missed it, I discussed these moves in my August 19 e-mail.)
4) Another way to rank companies is by revenue. And here, the story has been very consistent for many years...
Walmart (WMT) has been the king for 19 of the past 22 years – only supplanted by ExxonMobil (XOM) in three years when oil prices spiked.
This Visual Capitalist graphic in a recent post on X shows Walmart's dominance:
But it's almost certain that Walmart's reign will come to an end in the next year or so – probably forever – as Amazon (AMZN) surpasses it.
In another recent post on X, this Fiscal.ai chart shows how Walmart has grown its revenues nicely over the past two decades. But look at Amazon:
I think Amazon is one of the greatest companies of all time and has many years of strong growth ahead of it. That's why it remains one of the four stocks I've been consistently bullish on for more than six years.
As regular readers know, the other three stocks are Berkshire, Meta Platforms (META), and Alphabet (GOOGL).
5) On Monday night, I had dinner with my great aunt – who was almost scammed out of $10,000.
In addition to replacing her computer, which had been hijacked by the scammers, her son also froze her credit. This is another smart step for combating scammers, as this WSJ article from August notes:
The good news is that freezing your credit is less of a pain than it used to be. It became free and simpler under a 2018 federal law following the massive Equifax breach the year before. But it does take a little more effort than locking your door...
Aside from making it a little less convenient to apply for a loan or credit card, freezing your credit costs nothing and has virtually no downside. It doesn't hurt your credit score. Landlords and employers can still run a credit check. Existing creditors can increase your credit limit.
Making it harder to open new lines of credit might also be a form of financial discipline, since you won't be able to sign up for buy now, pay later offers or store credit cards without first unfreezing your credit.
I know I sound like a broken record, but you must stay vigilant to avoid scams!
Best regards,
Whitney
P.S. I welcome your feedback – send me an e-mail by clicking here.