Re: Joy of Cash

[John Galt]

Re: Joy of Cash

That's a good question GDER. Well thought out.
Obviously, I don't care but will be interested in what
others think.

John Galt

 

[cute fuzzy bunny]

Re: Joy of Cash

I think the key learnings from the past is that we'll have no idea what happens in the future, at least in short to medium time periods.

It might go up. It might go down. It might rocket to new highs. Might crash and burn.

I just hate buying stuff when I dont, at a glance, mutter..."hey, thats cheap". Despite the many ways of measuring stock valuations, I havent done that with any investment class in quite a while.

 

[John Galt]

Re: Joy of Cash

Yeah TH, that's what I do too ("Hey that's cheap!")
That's how I bought our Texas condo and lots of other stuff. In fact, if it's cheap enough I will buy about anything (to resell usually). Unfortunately, although my wife is a
pretty astute shopper, she seldom gets rid of anything
once she buys it. I, on the other hand, continuously
wander the house looking for stuff I can turn into
cash.

John Galt

 

[Cut-Throat]

Re: Joy of Cash

I was amused when he was trying convince folks that holding cash was not market timing .  It only would not be market timing if you structured your portfolio to hold x% cash and then did it for the long term.

I am again reminded of the saying that more money is lost waiting for the correction than the correction itself. Also that the market often climbs a wall of worry. When everyone thinks it's the place to be, that is when I get worried.

I agree with GDER's comments about the experts sitting around with piles of Cash. It seems to give the market a nice floor.

 

[John Galt]

Re: Joy of Cash

Hi Cut-Throat! I agree also. That money has to go somewhere, and chances are it will not be "the mattress".

John Galt

 

[charlie]

Re: Joy of Cash

Good grief, GDER. You probably have set ***** off
again.

Cheers,

Charlie l

 

[unclemick]

Re: Joy of Cash

That dirty rat Buffet cleaned me out of my Clayton Mobile Homes - got a bargin from the majority(family) owners. Of course that's what he does for a living - and he's always dinking around at the edges - conv bonds, foreign currencies, silver(the metal), etc,etc.

The overarching problem is the mountain of cash thrown off by the insurance operations - I don't think a high or low market means much to him - if he can find a really big company that meets his idea of a good business. Odds of finding a good company may improve at lower market valuations - but are not required. Buffett only comments on market valuations for the poor smucks who think they are buying stocks instead of part ownership in good busnesses.

 

[IDunno]

Re: Joy of Cash

One can only imagine the value of Bershire Hathaway today, if Buffet had been fully invested in stocks during 2003.

Very true. But an owner of Berkshire Hathaway stock would have been mighty disappointed if they *had* been fully invested in random stocks and the market had gone down significantly (as most people were expecting at the beginning of 2003).

Warren Buffet doesn't predict which way the market it going to go -- he finds stocks that are undervalued. So yes, Berkshire Hathaway stock would be worth a lot more today if it was fully invested in stocks in 2003. But it could be worth much, much, much less today than it is if that was the investing philosophy since the beginning.
-Scott

 

[Nords]

About Berkshire's stock portfolio...

Berkshire closed 2002 at $2423 for the "B" shares. By mid-Feb 2003, Saddam had driven them down to $2015 and I bought a large chunk for ourselves (and the kid's college fund) at prices of $2045 & $2096.

It was just a matter of selling one sucky large-cap mutual fund for what looked like an equivalently sucky large-cap fund with a more experienced & trustworthy manager.

The "B" shares closed last Friday at $3000. That's the third or fourth time this year they've pushed that number, and I think they're going to stay in its vicinity for a while before pushing higher. No problem, the kid's not going to college until 2010 and I don't think we'll sell these off until after we chew through our Tweedy, Browne investments.

Berkshire-Hathaway's stock days are just about over. In the last seven years Buffett has dramatically shifted its assets out of stocks and into entire companies (or cash). Berkshire's assets are now less dependent on the prices of its investments than on the perceived intrinsic value of its member companies... and also on the perceived health of its chairman.

 

[LA_Newsboy]

Re: Joy of Cash

Nords, your last point is an excellent one for Berkshire investors to ponder. It's basically a two-man investment firm (Buffet, and long-time co-chairman Charlie Munger, who's older than Buffet). I wonder about Berkshire's bench strength. You never hear a thing about their lieutenants, if there are any. A huge question is what direction Berkshire would go without one or both of the old guys around.

 

[cute fuzzy bunny]

Re: Joy of Cash

The bench is pretty good.

That wont matter though. Six seconds after the news that Buffett just suffered a heart attack or whatnot, the stock price will be halved and will remain so for many years, until the bench "proves" itself up to the task of replacing the master.

 

[Cut-Throat]

Re: Joy of Cash

The bench is pretty good.

That wont matter though.  Six seconds after the news that Buffett just suffered a heart attack or whatnot, the stock price will be halved and will remain so for many years, until the bench "proves" itself up to the task of replacing the master.

I think you are right! - I would be more afraid of BH than almost any single stock I can think of! - I'll stay with asset classes.

 

[cute fuzzy bunny]

Re: Joy of Cash

Its a great stock, and I've owned it. Had an "A" share for a while and four "B" shares for a while after that.

But I get indigestion thinking about the whole thing pivoting on buffett, especially when he's overweight and has a penchant for DQ burgers.

It IS comforting though to know he has a monkey.