3 ms·
> Warren Buffet's secret weapon is that he never sells (so you never realize a loss!). That's not how mark-to-market accounting works.
by notyourday 9y ago
> Warren Buffet's secret weapon is that he never sells (so you never realize a loss!).
That's not how mark-to-market accounting works.
- anonu 9y agoRoughly speaking - if you mark an asset lower than its purchase price you have an unrealized loss. You still hold the asset and - if you're taking the super long-term investment horizon view as Buffet does - eventually your asset will go up. In addition, Buffett gets into investments that probably wont have their business models disrupted anytime soon - and are tied to the success of the USA as a country: railroads, insurance, housing.If he does his stock picking right, he doesn't need to sell...
- notyourday 9y agoThat's not correct for public companies - the unrealized mark to market losses will be reported as losses via correctly (mark-to-market) valuing the asset on the balance sheet.