News By Tag
News By Location
Follow on Google News
According to Warren Buffet, How is Berkshire Hathaway doing these days?
"We simply endeavor to be frightened when others are greedy and greedy when others are scared," Warren Buffett famously quipped.
In a recent shareholder letter, Warren Buffett declared unambiguously that he likes to own equities, whether they are complete companies or publicly listed stocks. He stated that he "always held at least 80% of my net worth in stocks" and that his preferred level is 100% in equities. He did admit though, that Berkshire Hathaway is currently closer to the 80% threshold. The corporation has a massive $144 billion cash reserve. Why hasn't Warren Buffett and the rest of the Berkshire's investing team put more of this money to work? They surely want to put more money into it. Buffet plainly said "Today, though, we find little that thrills us."
The major issue appears to be high stock prices. Despite the recent dip, the S&P 500 trades at a future price-to-earnings ratio of 19.7, which is much higher than its historical norm. Buffett went so far as to say that when it came to buying back Berkshire shares, valuation was huge factor. "We don't want to overpay for other firm's shares and it would be value destroying if we did so while buying Berkshire," he wrote to shareholders.
Should we take Buffett's present attitude, suggesting that it's advisable to stay away from equities right now? That would be taking the statements of the famed investor out of context. Buffett did not claim that there were no stocks worth investing in.
Berkshire Hathaway has made a few stock purchases recently. Two of those purchases in particular, we believe, demonstrate how other investors may use Buffett's technique to improve their own strategy. Berkshire increased its holdings in and made its first purchase of the recently listed Nu Holdings.
Ability Corporate Advisory Limited [https://abilitycorporateadvisory.com] is an independent Firm established in 2009 and headquartered in Hong Kong. As a boutique Firm, we are free from conflicts of interest or biased advice that can arise from misaligned incentives or commission-based structures. We offer rational investment and asset management recommendations based on a thorough understanding and analysis of your individual financial circumstances, risk profile, priorities and goals.