The majority of Berkshire owned companies have dominant market positions, strong returns on capital and an owner with a fat wallet. As their competitors wilt in the coming downturn, Bershireâs companies will improve their competitive position and reap the benefit when things improve. Those companies that cant re invest their profits at good returns will pass it on to the holding company for Buffet to invest, something heâs pretty good at. Berkshire Hathaway is a money compounding machine. Sure, it wonât grow at the pace it did previously, because itâs so big but it will tick along slowly but surely. They are also increasingly venturing into international markets, where most of the growth is going to be. And if you take some of the companies that Berkshire has large holdings in, such as Coke, the prospects are very good. I think the point you miss here is that Buffet does not ignore the macro picture, he just realises that it is impossible to know what is going to happen so why not just invest in the best companies and let them do the worrying for you. A company like Coke had been around since 1880 something, itâs survived through world wars, epidemics, financial crashes, depressions, inflation, deflation etc etcâ¦.. And it has still churned out great returns on equity, year in, year out and will continue to do so as long as we have a growing world population. Over the long term most of Berkshire Hathawayâs holdings will go from strength to strength.
The reason gave up trying to predict the macro picture was didnt made much of a difference given that the credit bubble would blow bigger and bigger everytime the US got into trouble so he could AFFORD to just look at the micro, it wasn't hurting him all that much. Now he is going to get hurt big time, its not imposible to know what is going to happen. In 2007 only a clueless nut couldn't see a US recession coming, that meant short selling would do well, whats so hard about this? More regulation, nationalizations and interference with US banks have been signaled for so long by the authorities that anyone who is not ready for it is begging to lose money, yet buffett salivates over some wells CEO who lies to shareholders or some other micro factor
This market will revive companies like Buffet with rebound prices when the market rallies. There is a saying called strong hands... When the stock is once again in strong hands companies that Buffet has invested in will turn with a 30% profit. With so many Hedge Funds who lost money last year the call for new capital will go to good yield stock. What's the dividend on the BRK shares? I think BRK is a a great opportunity for the non trader. If you want to make money follow Buffet... Coke and Amex will rebound eventually and that should be simply on the fact that more execs eating at mcd and putting it on plastic until payday. I saw a board meeting (a group of older suit types) at MCD just recently and they seemed so out of place. The amount of money Buffet has access to is amazing... Not to mention his preferred stock deal with Goldman Stock. The next big wave is the foreign Bank IPOS. New Banks with no debt... You heard it first here.
then why dont you fuck off. Stick to your pathetic long stock call threads. You have no business here.
The current credit bubble started in the early 80's Buffet has concentrated on investing in quality companies since the early 70's if not sooner. He stated many times that he really does not pay much attention to economic forecasts. His main concern is outpacing inflation, which companies with pricing power, such as Coke, should be able to do for him. Anyway, i agree with Stocktrader....it's a worthless thread. I just wish there were more 'glass is half empty' types out there.
didn't buffet sell a few gigantic puts on the indexes last year? don't see any mention of that in this thread. seems kind of important to the long term outlook of stock, i think.