Almost Half of Warren Buffett-led Berkshire Hathaway’s $365 Billion Portfolio Is Invested in Only 1 Stock::This tech giant has made for a wonderful investment in recent years.
Saving a click:
By doing so, you’ll quickly realize that about 49% of the massive $365 billion portfolio is invested in just one stock: Apple (NASDAQ: AAPL).
Who could’ve possibly guessed? … well … everybody! … but what a story!?! … I mean … no … no, not really…
This is what makes me contemplate whether or not he is a good investor. I mean, he played it too safe, and got lucky with Apple.
His huge boner for Apple has to do with the obscene amount of cash they have on hand. I think his feeling is that they have the capacity to self-finance massive innovations without the need to issue/dilute stock.
They have the cash to immolate and outlast any competition, more like.
Ourlastoutbid the competitionFtfy
He’s 93. He hasn’t gotten by on luck alone for the 82 years he’s been investing (Yes, he bought his first stock at 11). His essential strategy and advice are solid.
That’s the thing with odds though. In any random chance distribution of 100 people, there will be 1 ranked higher than the other 99. We as a society ignore the 99 and focus on the 1 “genius” but statistically someone was going to be in that spot. If he wasn’t lucky he just wouldn’t be famous.
So you think it’s most likely random chance that this guy that’s literally a 1 in a 100M for wealth got rich?
If something has a 1 in 100M chance of happening to someone, you’d expect that about 80 people in the world now have had that thing happen to them.
Don’t mistake statistics for reality. Statistics describe reality, they don’t dictate it.
In this situation, there could be a 1:100M chance for any random investor to be this successful. Or there could be a 1:3 chance but you need to meet specific criteria, which he and only a few others have.
You can’t describe a situation with dice rolls unless you’re very sure what kind of dice you’re rolling.
I was responding to purely hypothetical odds that someone just made up, in which case things can be as complicated or simple as one wants them to be.
But even if I were making an actual prediction based on real statistical data, I am not sure why you would think that having an expectation of the approximate distribution of something given what we know about its statistical likelihood is “mistaking statistics for actual reality”.
This would assume he’s making random picks and getting lucky. He’s not. He’s the most successful “Value Investor” of which his mentor Benjamin Graham is considered the father of. The advice isn’t a secret, it’s all out there.
It’s not assuming he is making random picks. It’s saying that the stock market is a random walk, which is just a fact. He is making picks based on a system, but if that system was actually proven to find underpriced stocks, everyone/enough people would also follow the same strategy and build that value into the price, removing whatever advantage he once had.
If he’s successful because he’s a “value” investor, why aren’t all of the other “value” investors just as famous and successful? It’s because the difference between two people doing the same thing, is luck.
Other people do. It’s not a get rich quick scheme, so it’s hard to beat 80 years in the market. He avoids a lot of stocks that do very well too. I’m not saying following every move he makes will make you rich, I’m saying his general advice and strategy works.
Apple has their own hedge fund. So pretty much he’s letting Apple manage half his funds rather than do it themselves
And half that hedge fund’s portfolio?
Apple.
It’s Apple all the way down.
All those resources available to them, and the biggest idea they’ve come up with in the better part of a decade is that dumb face computer.
I used to work as a financial analyst on Wall Street, and even after I changed careers I invested on my own, roughly following Buffet’s strategy. My annual returns averaged 22%, but given the little starting capital ($2000), I cashed out with just enough for a large downpayment on my house.
Anyway, just a very short primer on how Buffet is investing. He’s a student of Benjamin Graham who wrote the highly influential The Intelligent Investor. There, Graham outlined the most basic fundamental strategy: buy stock in companies where market cap is below book value and hold long-term, until stock catches up. Obviously, that’s hardly feasible in today’s markets, but there are still stocks that you won’t realize they are undervalued until you research the shit out of the companies. Not stocks, but companies. The former, technical investing, has been in vogue since at least the 90s, while the latter is the old school fundamental approach of actually calculating the stock’s underlying value and its growth potential.
Where it all comes together is portfolio building. The conventional theory is to have around 30 stocks to minimize volatility. Buffet’s approach is to maximize upward potential by having fewer stocks (around 10), while minimizing risks by researching and fully understanding companies he invests in. This ranges from understanding financials and operations to analizing the company’s management. Buffet is known for keeping the management of an acquired company in place and not interfering with their decisions because he wouldn’t invest into a company where he wouldn’t trust the management in the first place.
Of course, I didn’t have the means for investing enough to have any influence on the company or market, so I had to really dig into the fundamentals and hope the market would eventually realize the value of the company. It worked for me, as long as I stuck to companies whose business model I could understand. So, I missed loads of winners from the tech sector, but I’ve had a steady above-market return, and that was good enough for me. I followed the advice from the book On Investing by John Neff, which I can fully recommend, if it’s still in print.
For everyone else without all that time, just invest in an index fund and go. Vtwax and chill with the bogleheads
I live in Ireland, where all investing that’s not into real estate is heavily taxed, and investing into idex fund is taxed extra hard (including tax on unrealized capital gains). So, that option is not for me, but it’s a perfectly sensible option for many. These days I just manage my retirement funds by rebalancing them within the investment house I’m with, based on economic megatrends.
Ahh very good point. My advice is definitely US centric in that regard.
always that there’s a no technology post in c/technology it is this bot who post it.
