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Article:Long, long ago, Buffett ceased being a diehard value investor, seeking instead what he regarded as great companies at good prices. It is not for me to say whether he currently owns great companies (aside from See’s, that is). But their prices are certainly moderate. Were this a fund, Morningstar would classify its portfolio as large (or possibly mid) value.
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But, in fairness, most of the outsized returns (versus say SP500) came in first 20 years, not the last ...
And without last month's August surge, SPY and BRKA dead even on this chart.
1. BRK has huge operational businesses now and lots of related economic risks.
2. WB has gotten trigger-shy. He didn't act during 2020 or 2022. He may be waiting for a market that isn't there.
BTW, many value investors (WB, Howard Marks, Sam Zell, etc) complained that the Fed and the Congress intervened too early in 2020 (remember pandemic, elections), so the value investors missed their "feasts" or "on the grave dances". I think that the government saw earlier than the most what was evolving in 2020 based on tax receipts (payrolls, FICA, sales, customs).
March 2020 unsettled even The Great One. He's in good company. He moved quickly enough to dump all the airline holdings though.
The Fed and Congress really did respond quickly, fortunately for us. Like going to war, but instead of paying people to build airplanes and bombs, they paid them to stay home ... and, likely, not topple the government. Actually, many governments did same thing.
Those images of stacked coffins rocked our world.
The value investing environment you describe sounds right too.
People only invest if they perceive there is a future. Even value investors! In March 2020, for a few short moments, it felt like an asteroid was inbound.
So, likely took a while for WB and company to recover.
Those who did not hesitate and jumped into BRKA (and other funds) during that time have been rewarded handsomely.
They still believed!
https://investopedia.com/terms/c/conglomeration.asp
On a sum of the parts basis, it is undervalued relative to current market. Insurance and utility stocks are hot. But WB thinks the current market is not undervalued; otherwise, he would be buying back BRK stock.
I feel I learn a lot by scanning a list of 15-20 funds, stocks or indexes at the end of the day. These are things I may never own. But together they tell a story. Takes less than 60 seconds out of each day. My $1.95 monthly app from Apple makes this extremely simple. Everything updates continuously and syncs across my devices.
The observations rarely produce “actionable” information. Rather, they add in small degree to my understanding of how various market components interact. Daily the tid-bits of data are meaningless. Over months and longer periods I think there is something to be learned.
Many profess not to care what markets do. Say they never look. Never react. Yet, many visit boards like this where markets and approaches to investing are discussed daily. It strains credulity to think we are all passive investors blithely sitting on the same mutual funds or stocks we’ve owned for 15 years - rarely bothering to look.
"Many profess not to care what markets do. Say they never look. Never react."
If anyone says that they are not aware of the inherent contradictions in those statements, and we do not need to react to their statements.
I assume everyone that posts here knows or wants to know what the broad markets (not necessarily individual stocks) are doing and they have a real or mental notes of watch lists. To me, BRK price level or changes in its price is not helpful to my investing activity / decisions. YMMV. But because I own it, the days of not paying attention to it may be coming to an end sooner than later.
I think we are getting away from the OP.
https://www.cnbc.com/2024/09/12/ajit-jain-dumps-more-than-half-of-his-berkshire-hathaway-stake.html