5 ms·

Why would it be opposed to that?

dragontamer 3y ago
Generally speaking, you can only spend your money on one thing. VCs, and the Silicon Valley style culture in general, is a different investing culture than what Berkshire Hathaway is doing here. The underlying current of this discussion is which investing culture is better. There's a lot of benefits to patiently waiting for an opportunity, rather than spending money as soon as it comes up. SV is surprisingly short-term in its thinking and culture. That's the lesson IMO for the past decade or two, SV is always about keeping up with your neighbors as opposed to thinking about the long term stuff that matters. In the SV mindset, idle money is awful, you should have spent it on the latest-greatest recent whatever. 5 years ago that was maybe VR, 10 years ago maybe Internet of Things. Just 2 years ago it was cryptocurrency. Guess what? If you spend your money on dumb things, you don't have money left over when the important revolutions happen. Patiently holding money is slower, but still valid form of investing.
- burkaman 3y ago
  Can you really not think of any worthwhile uses of money other than investing in MoviePass or sitting in a cash pile and "waiting for an opportunity"? I can think of quite a few.
  - dragontamer 3y ago
    $160B is really small for Berkshire Hathaway. You're looking at a literally $Trillion++ company. This $100B is literally pocketchange for a rainy day for them. They've got the vast majority of their assets invested. Saving some money for later is more than just "patience", it also involves thinking about the overall picture of the company in question. ------------ In any case, "Cash" earns 5.25 to 5.5% right now (Federal Funds Rate), meaning all companies with a PE Ratio worse than 19 is a worse investment than cash. And there's a _LOT_ of companies that have less than a PE Ratio of 19. EDIT: I'm not saying that they're always going to be a worse buy. But a $1 Billion company needs to make 0.0525 Billion/year to be comparable against cash right now, or at least make an argument why this next year of investment is worth more than the 52.5 million that could be easily obtained from a (state-tax free) 1Y Treasury.
    - shitpostbot 3y ago
      [dead]
    - jwess 3y ago
      Even if Berkshire Hathaway has a market capitalization over one trillion, which I don't believe it does, $160 billion is 16% of one trillion, so it's not exactly "pocketchange for a rainy day"
      - dragontamer 3y ago
        $1 T+ in assets and $0.45T in Liabilities. When you have $450 B. in liabilities, $160B in cash suddenly doesn't look so big.
    - deleted 3y ago
      [deleted]

Generally speaking, you can only spend your money on one thing. VCs, and the Silicon Valley style culture in general, is a different investing culture than what Berkshire Hathaway is doing here. The underlying current of this discussion is which investing culture is better. There's a lot of benefits to patiently waiting for an opportunity, rather than spending money as soon as it comes up. SV is surprisingly short-term in its thinking and culture. That's the lesson IMO for the past decade or two, SV is always about keeping up with your neighbors as opposed to thinking about the long term stuff that matters. In the SV mindset, idle money is awful, you should have spent it on the latest-greatest recent whatever. 5 years ago that was maybe VR, 10 years ago maybe Internet of Things. Just 2 years ago it was cryptocurrency. Guess what? If you spend your money on dumb things, you don't have money left over when the important revolutions happen. Patiently holding money is slower, but still valid form of investing.

burkaman 3y ago
Can you really not think of any worthwhile uses of money other than investing in MoviePass or sitting in a cash pile and "waiting for an opportunity"? I can think of quite a few.
- dragontamer 3y ago
  $160B is really small for Berkshire Hathaway. You're looking at a literally $Trillion++ company. This $100B is literally pocketchange for a rainy day for them. They've got the vast majority of their assets invested. Saving some money for later is more than just "patience", it also involves thinking about the overall picture of the company in question. ------------ In any case, "Cash" earns 5.25 to 5.5% right now (Federal Funds Rate), meaning all companies with a PE Ratio worse than 19 is a worse investment than cash. And there's a _LOT_ of companies that have less than a PE Ratio of 19. EDIT: I'm not saying that they're always going to be a worse buy. But a $1 Billion company needs to make 0.0525 Billion/year to be comparable against cash right now, or at least make an argument why this next year of investment is worth more than the 52.5 million that could be easily obtained from a (state-tax free) 1Y Treasury.
  - shitpostbot 3y ago
    [dead]
  - jwess 3y ago
    Even if Berkshire Hathaway has a market capitalization over one trillion, which I don't believe it does, $160 billion is 16% of one trillion, so it's not exactly "pocketchange for a rainy day"
    - dragontamer 3y ago
      $1 T+ in assets and $0.45T in Liabilities. When you have $450 B. in liabilities, $160B in cash suddenly doesn't look so big.
  - deleted 3y ago
    [deleted]