GM at $35.
I was asked this morning if anything surprised me from this weekend.
One thing in particular did after a colleague pointed it out to me. Apparently he was listening more attentively while I was laughing at a joke. This has not been discussed broadly in the media, and there were only a few comments on Twitter. Here we go…
During the Q&A, there was a question about education investments between the US and China. After Charlie answered, Buffett paused and said, 'I probably shouldn't say this, but sometimes I worry about Charlie.' The joke that followed went something like this and may have had an investment suggestion nested within (paraphrasing):
Warren is a little worried about Charlie's hearing, so while visiting his doctor he asks what he should do to bring attention to the problem. The doctor suggests Warren test Charlie's hearing from various distances. Later, from across a room, Warren asks Charlie, 'What do you think about buying GM at $35/share?' Warren hears no response. So he moves closer and asks again, 'Charlie, what do you think about buying GM at $35/share?' Still no response. So Warren walks right up to Charlie and asks directly in his ear, 'Charlie, what do you think about buying GM at $35/share?' Munger then turns and says, 'For the third time, Yes.'
Laughter ensued from the crowd (including me). My colleague looked at me with a surprised look on his face. 'Is he indirectly saying buy GM at $35?' I quickly looked to see if there was any immediate news on Buffett buying GM. A story had broken earlier about his support and backing of GM CEO Mary Barra, but that's it.
GM is currently priced at a $55B market cap and maintains 18% market share. Was Buffett hinting? He owns $1.4B already, but may have suggested a fair price at $35. In the first day following the meeting, GM traded down (0.63%).WSJ: May 1 Auto Data
Disclosure: I am long GM.