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Berkshire isn't selling positions to add to its cash balance. It's just not investing it's cash flow.
So if anything it's saying hold, but as others have pointed out, the investments Berkshire makes are quite different from us common folk so I wouldn't read as much into it as you are.
If Berkshire doesn't think there are a whole lot of good opportunities right now, and is waiting for prices to decline -- why isn't everyone? Food for thought at 2:25 in the morning.
Anything Berkshire bought would move the stock price, so they typically look at entire companies. Fortunately (or unfortunately) for me I don't have that same problem. If I want to throw 10k every couple of months at a stock or index/ETF that has no impact on the price of the shares. Again, one of the benefits of being a small individual investor.
Quote:
Originally Posted by BeerGeek40
Jim Cramer always uses the analogy of taking chips off the table.
Jim Cramer caters to traders, of course he would say that. Anything can happen in the short term. The real question is look out to your investment horizon, will the market be higher or lower at that point in your opinion? In my opinion in 10-15 years when I'll actually use the money it will be higher, so messing around with a few %s is a waste of time.
Let's say you get it right and you pull 50% of your investments out today and turn them to cash and tomorrow the market drops 20%. You buy in perfectly at the bottom on that dip and it returns to where it is today in 3 months. Congrats you did everything right and you made 10% more than you would have had you not done anything. That's an awfully big gamble. Realistically you'd pull out half or a third of that and put in cash and you'd be looking at beating the market by 3-5% if everything goes perfectly for you.
Hey it's your money, you make the calls. But watching what Buffett is doing, is always a good idea.
Jim Cramer always uses the analogy of taking chips off the table.
As the market melts up. OP you are dead right we are at the top of a cycle. The problem is we DON'T know when the cycle will end and to time it is potentially losing money..alot of it if it takes a couple years. Then...as a couple here have said ..when do you get back in? At what point? Its called timing the market ..and its a losing game.
I'm not Buffett - nobody is - but I'll follow what Buffett and Peter Lynch say. And I'm more than happy to trade stocks and take quick profits at this point - but if Buffett is sitting on that much cash, that is telling me something.
is that what buffett is saying that people should do?
Buy and hold has proven to be the best long term strategy for the average investor. When they try to time the market the masses lose their asses.
Don't confuse buy and hold - a strategy that has worked fine over the years - with a hedge on profits --- if you take 25% to 50% off the table for a year - and the market continues to run up, you will still make money. If the market declines, you'll look smart.
is that what buffett is saying that people should do?
Actions are louder than words. What do you expect him to do....go on all of the TV shows and shout out to the masses that the market is overvalued?
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