Sell full BYD holding
A quick post to state that as of today’s close I sold my full remaining position in BYD.
EV mania
When I started this blog 1.5 year ago the first EV mania wave had passed, Tesla had been treading water in the 200 USD range for a few years. But I was convinced that this rally still had more steam, the wide public had not yet caught this massive change that was upon us. Now I would say everyone is on the “EV-train”, in the sense that everyone now believes EVs will take over the world in the coming 5 years. I have no idea how far this EV-mania can go, perhaps are we still in early stages and valuations will double from these levels. But I feel the easy money has now been made. I was right, EVs are taking over, now the whole world agrees and anything touching EVs is rallying like no tomorrow. Look at the Global X Lithium & Battery Tech ETF share price and traded volumes.
So for me this it the time to start being cautious, be thankful that the investment thesis worked and stop being so heavily tilted towards this theme. Outside of this “blog fund” I also been invested in this ETF, which I now also sold.
Portfolio wise I still have 2 holdings geared towards EV exposure, LG Chem and Coslight. For the long-term I keep LG Chem, will I believe will be one of the big battery providers to the western car makers. I also keep Coslight which as a small cap is still at a low valuation, and I think there is a potential for a multiple expansion if this mania continues. It has lately also sold parts of its battery factory for laptops, to gear itself more towards batteries for the Chinese EV market, which I don’t think the market really picked up on (yet).
Any regret on byd? Also, how much further do you think naga has to climb?
Regret no. Painful to see it climb so fast after I sold, well yes of course. But it’s not my strategy to follow stocks up to bubble territory. I was very happy I didn’t sell all and with China’s announcement, well it’s a game changer for sure. My thinking still stands though. BYD’s buses are great and it’s battery production OKish for China standard. But they still are not able to deliver really solid cars (Tang was pretty good), which is a problem in my view. So I was happy to let go of my shares.
Nagacorp, I think will have a discount due to the majority owner. Over time new investors might come in who are non the wiser and the discount might shrink. I think Nagacorp has the potential of trading at 10 HKD per share in 12 months if the discount goes away entirely. We probably won’t get there, but with Naga2 opening, I’m waiting for at least around 6.5-7 HKD per share before even considering to sell. So more or less in-line with my old bullish scenario.