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Sometimes a picture’s worth 1,000 words. What possible reason could these 90+ year-olds have for investing other than that they must enjoy it very much? While Buffett chastised the gambling atmosphere, Munger tore in to Robinhood.
Interestingly, the WSJ mentions that Buffett is finding value in pockets of the market today and has been spending down some of Berkshire’s big cash horde. Contrast that to the heightened note of scepticism presently among much of the investing public.
It’s a little more subtle than “not liking what they’re seeing.” Yes, they think retail investors are behaving irrationally. At the same time, this has created inefficiencies in the marketplace that has left some assets undervalued and allowed Berkshire to snatch up bargains.
What I find interesting is Warren bought more stock this last quarter than usual. If he expects a significant downturn, I would have thought he would wait.
However Activision has a floor under it with MSFT purchase and the other big buys were energy CVX and Occidental, making me think he believes the price of energy will remain high
@sma3 “If he expects a significant downturn, I would have thought he would wait.”<— He doesn’t invest this way by timing the market. He just looks at the value of the company relative to the current price and he must have thought the price was reasonable enough. That said, if he’s finding companies that are reasonably priced (finally) then perhaps we are close to a bottom after all.
Re Energy… listened to the CEO of Chevron this AM… and he said that he sees energy prices remaining high for YEARS and not just for quarters.
The writers at Barron’s must read MFO… Posted today: “ While Buffett’s move could prove profitable for Berkshire (ticker:BRK.A, BRK.B) shareholders, the buys themselves aren’t really a signal of increasing bullishness on the market overall. Instead, they’re the application of Buffett’s signature value investing style and his focus on simple and easy-to-understand theses on individual stocks”
I agree with Buffett that there are some “pockets” of value here and there being overlooked by the performance chasing herd. The big indexes (like the S&P) may well be in bubble territory. And, Bill Fleckenstein thinks that target date funds, used as the default option in many workplace retirement plans, are also contributing to a bubble in some market areas - basically the major indexes.
Identifying those pockets of value isn’t easy. Way beyond my humble capabilities. I was led to Allegheny (Y) by an excellent in-depth Barron’s piece. Less than a month after I bought it, Buffet made an offer and it jumped 25% overnight. I sold. I haven’t yet replicated that stroke of good luck - and not for lack of trying.
The Barron’s piece delved into a lot of things I’m not qualified to address, like price-to-book, p/e, debt level, return on investment, dividend history, corporate leadership and diversification into market segments. Allegheny’s interest in a casket maker struck me as a uniquely “growthy” industry.
I’m inclined to say this might be a good time to lighten up on funds and seek out opportunities in individual stocks. But, admittedly, that route is much riskier.
Comments
Interestingly, the WSJ mentions that Buffett is finding value in pockets of the market today and has been spending down some of Berkshire’s big cash horde. Contrast that to the heightened note of scepticism presently among much of the investing public.
It’s a little more subtle than “not liking what they’re seeing.” Yes, they think retail investors are behaving irrationally. At the same time, this has created inefficiencies in the marketplace that has left some assets undervalued and allowed Berkshire to snatch up bargains.
https://media.gettyimages.com/photos/argentina-buenos-aires-coke-display-at-convenience-store-picture-id982745384?k=20&m=982745384&s=612x612&w=0&h=K-rb-zcIW0GoFMgARZntFN8qInnfyCplRGe4PkDDwX4=
However Activision has a floor under it with MSFT purchase and the other big buys were energy CVX and Occidental, making me think he believes the price of energy will remain high
Re Energy… listened to the CEO of Chevron this AM… and he said that he sees energy prices remaining high for YEARS and not just for quarters.
Warren Buffett Is Buying Stock Again. That Doesn’t Mean He’s Optimistic
https://www.barrons.com/articles/warren-buffett-buying-stock-optimism-51651611766
Identifying those pockets of value isn’t easy. Way beyond my humble capabilities. I was led to Allegheny (Y) by an excellent in-depth Barron’s piece. Less than a month after I bought it, Buffet made an offer and it jumped 25% overnight. I sold. I haven’t yet replicated that stroke of good luck - and not for lack of trying.
The Barron’s piece delved into a lot of things I’m not qualified to address, like price-to-book, p/e, debt level, return on investment, dividend history, corporate leadership and diversification into market segments. Allegheny’s interest in a casket maker struck me as a uniquely “growthy” industry.
I’m inclined to say this might be a good time to lighten up on funds and seek out opportunities in individual stocks. But, admittedly, that route is much riskier.
The market obviously thinks there is a sig chance the deal will not close, but Buffet obviously disagrees