Thursday, 26 September 2019
You want to learn to invest like Warren Buffet???
Read? Here's why Warren Buffett's record $122 billion cash pile could be a worrying sign for stock markets
Berkshire's cash pile is worth nearly 60% of its $208 billion portfolio of public companies. In the past 32 years, the group held more cash as a percentage of its portfolio only in the years leading up to the financial crisis of 2008, according to Bloomberg.
Hmm ...
So you are also holding large war chest like Warren Buffet to be learning to invest like Warren Buffet?
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Do trainers teaching warren buffet method telling you this moral of the story?
ReplyDeleteHi Uncle8888,
ReplyDeleteHeheh need to bear in mind that BRK holds more assets in private companies than in public companies.
Comparing BRK's cash-to-total-assets ratio over the years:
end-2007 : 16.1%
end-2008 : 9.5%
end-2009 : 10.2%
end-2010 : 10.2%
end-2011 : 9.4% (this is just before S&P500 really started multi-year boom)
end-2012 : 11.0%
end-2016 : 13.8%
end-2017 : 16.5%
end-2018 : 15.8%
mid-2019 : 16.0% (latest reported figures as of June 30)
Yup, BRK cash level is back to 2007, but it's not like they liquidated a lot of their portfolio. They normally hold between 10%-15% of overall portfolio in cash.
They are still a buy-and-hold investor! Kekeke!!
Warren buffet holding more private companies in his portfolio then how can retail investors learn to invest like him. Isn't this BS learning to be like Buffet?
ReplyDeleteYeah BRK is more like private equity cum insurance business.
DeleteThe important learning is the thought process & valuation process whenever he buys or sells major positions .... which he usually writes down in his annual letters for free ... No need to pay expensive "trainers" LOL!
Otherwise if just want to copy his public companies can just follow his quarterly 13F reports. Also free! 😄
For no brains required, aiyoh ... Just buy berkshire shares lorr! Keyman risk though...
Or just 50% BRK and 50% blackstone -- a very atas private equity company. Temasek & GIC use blackstone a lot. 😉
Blackstone versus Berkshire
Blackstone quite active in rebalancing. Right?
DeleteErrr .... blackstone super high-beta long-term invest-and-hold. Just look at how much BX dropped during the GFC LOL! Temasek & GIC seems to have this mentality at that time too ... hence the speculated drops of $100B in each of their portfolios then.
DeleteLonger term, on a portfolio basis of many PE investments, Blackstone is more right than wrong. But as retail investors, we need to remember Keynes' quote about Irrationality & Solvency! Hoho!
For someone who initiated a 50:50 into Berkshire & Blackstone one year ago .... looking at the performance charts, he should now be busy selling quite a bit of BX and buying BRK to get back into allocation. 😉
Buffet does "value timing" .... which is another form of market timing LOL!
ReplyDeleteHowever he tends not to sell. And he sells slow, bit by bit, as a company's business model & prospects deteriorates over a few years.
Or to sell small chunks 1%-10% when company's stock price is very optimistic.
Billionaire families also raising cash
ReplyDeleteNot as aggressive as Berkshire though .... family office target cash allocation only 8%.
They are still looking for real estate & private equity, both of which are not exactly cheap currently.
But they all expect US recession in 2020 LOL!