If you have gone through the transcript, and understand how well Li Lu has grasped Buffett's approach, it would not surprise you that he emerged as one of the top candidates as Buffett's protege.
No, it is not about China play. China does provide Li Lu an opportunity to showcase Buffett with he BYD case study. But it is what he said in the lecture that Buffett liked.
Now, regarding BYD, perhaps people are more interested in whether it is a BUY now.
Here is the Question raised to Li in the lecture
- So when Buffett looked at the stock maybe it was a better deal but today it is this dream of vehicles that is really priced in. It does not feel like a good value investor stock. So why would you own it today?
Li sort of dodged the question. But I can try to answer for him. One of the key Buffett principles he mentioned was "You need a margin of safety so if you are wrong you don’t lose much." When Li and Buffet got into BYD, there were significant margin of safety (translation: price was cheap). Now that price has been 8-10x, the margin is clearly much smaller. But is there still a conformtable margin? That will be your own judgment. However, if you look at Buffet's past investment, or that of MSFT (about 250x since IPO), 10x is not that big a multiple for a "margin of safety".