Media squawking about Buffet drowning in cash. But can't find anything cheap to buy. So he takes 1% of his cash & buys his own cooking. So what's the takeaway here? My conclusion is keep your cash dry for now.
I agree. Just trying to get a sense of how expensive he thinks stocks are. Without asking him directly. He might be buying again now.
Buffett has bought a lot of Apple stock recently but no other huge purchases. The "Buffett Indicator" of how expensive stocks are is calculated by:
Total Stock Market Capitalization / GDP
Currently, that indicator is VERY high, on par with the dotcom bubble days.
I love John Bogle and wish I could simply relax and hold my index funds forever. But I've become convinced we are in yet another equity bubble and I've pretty recently sold off most of my equities.
I hope you don't have the same problem as this info represents!!
Growth of 10,000 invested Jan 1 1980 for all days--- 708,143
Missing 5 best days------------------------------------- 458,476
Missing 10 best days------------------------------------ 381,484
Missing 30 best days------------------------------------ 135,226
Missing 50 best days------------------------------------ 62,342
Doesn't take many days out of the market to lose big.
I don't listen to Buffett much these days. He's got a thing for Becky Quick with CNBC - she is one of the very few folks he gives interviews with, and he does it fairly often. If you notice him at his annual meeting or whenever reporters are surrounding him, Becky is always within arm length distance...
... It may be the case that he isn't able to find anything "cheap" which is viable for him to buy because of the necessity for it to be large cap with sufficient liquidity for him to take a position. He's not looking to put $10 million or $100 million into a company. He needs to put at least a few hundred million or billions to even register.
I’m well aware of those stats and they’re misleading because missing the down days saves you a bunch which mostly offsets the good days. I more or less skipped investing during the dotcom bubble (I only had maybe 20% of my net worth in equities) and I missed a ton of great days in 1999. Didn’t bother me a bit because I had the chance (and took it) to buy into the market cheaper a couple years later. My point is that overall valuation matters in the long run and even though what I’m doing now is evil market timing, I have enough conviction in my thesis to wait patiently on the sidelines for a market that is more fairly valued than today’s. And when the market was bottoming in 2009, I went 86% in equities meaning I’m not a perma-bear. Wishing the best to those who disagree...time will prove one side or the other to be correct.
Did that wrong. Meant to include the quote about Warren Buffett liking Becky Quick.
...
Total Stock Market Capitalization / GDP
...
We are most likely in an equity bubble, IMHO. Equities may be overvalued, but to me, they're like real estate. They're worth exactly what you buy or sell them for....I've become convinced we are in yet another equity bubble and I've pretty recently sold off most of my equities.
Becky who
To start a newsletter, you buy a list and send half of them a forecast of gloom and doom. The other half gets light and airy. Then you send the half that think you are a prognosticator an offer to sign up.You should start your own letter and make some money with your timing!
Since I stopped watching CNBC, I get my Quick fix by recording "On the money" at 6:30 am Sunday on NBC.Becky Quick of CNBC. See video link below. She is apparently Buffett's favorite reporter.
It's been a few years since I watched CNBC, and Becky has aged a bit (46 now).
https://www.cnbc.com/video/2018/05/04/becky-quick-introduces-warren-buffett-archive.html