7 ms·

Charlie munger and buffet are famous for not diversifying very much. They deeply research companies and then buy them long term. Currently half the Berkshire po

by jraby3 3y ago

Charlie munger and buffet are famous for not diversifying very much. They deeply research companies and then buy them long term. Currently half the Berkshire portfolio is in apple. Also bill gates probably wants to change the world for the better with his assets and has done so repeatedly. So the trillion dollar difference probably would have had a huge positive impact on the world.

candiodari 3y ago
I don't understand where this Berkshire reverence comes from. Buffet didn't become rich through stocks. His accomplishment is to stay rich by investing, primarily in insurance contracts, and it does look like that is a good way to summarize Berkshire: it's a backend investment fund for his insurance business. It makes his large insurance contracts a lot more competitive. And about that part, he's very tight lipped. He invests well, but he's hardly the only one, and Berkshire would not work without the backend insurance business generating the amounts of funds he has to invest in the stock market. So all of his advice is mostly pointless, unless you have 100 billion lying around. I'm saying: if you want to beat Berkshire financial performance, they key to that ... is not investment. Which is the great con Buffett pulls. He shows large amounts of money and a very prudent investment strategy, and with that attracts funds to run his insurance business. NOT the other way around. This is the central component of a huge insurance business: you need a LOT of money, available as capital, to run it. To be fair, I've never heard of him lying about this either, but he's not exactly forthcoming with this information. He also does remarkably little investing with the time he has. Clearly he's spending the vast majority of his time on his insurance business, not his investment business.
- bombcar 3y ago
  The vast majority of Berkshire’s returns come down to identifying strong businesses, acquiring them, and providing them nearly unlimited free capital.
- jimhefferon 3y ago
  This is interesting, and I have not heard it before. Thanks. But I'm not really interested in WB so much. I'm more interested in his claims about investing. I understand him to say that he has done well over decades, better than the broader market, with Value Investment. Is that true?
- loumf 3y ago
  Another big part of it is the tax structure of a conglomerate. He is able to take cash out of See's Candies and Daily Queen (where they cannot do any good) and put it into big capital investments in Trains and utility infrastructure -- he can do this tax-free. If you tried to replicate his strategy, but could not hold 100% of the companies, you'd have to constantly sell stock or collect dividends to do the reinvestment and would incur taxes along the way.
- tim333 3y ago
  >Buffet didn't become rich through stocks. That is untrue. That's exactly how he became rich. Although his dad was wealthy he deliberately took no money from him and started from zero. He started stock investing and ran an early hedge fund, the Buffett Partnership investing for others and taking a cut of the profits. In the 1969 after becoming a multi millionaire and closing that he moved to running Berkshire Hathaway. At Berkshire there is a mixture of stock investing and running businesses. He was briefly ranked the richest man on earth but started giving his shares away to charity. If it was not for the charity thing he'd be up there with Elon.
  - seec 3y ago
    At least that's the mythology he wants you to believe. But if you truly believe that I'm going to say you need to take a hard look at how humans really operate and stop taking stuff said as truth. Because even when people say some true things, there is ALWAYS some hidden information that changes the overall look. It's foolish to believe whatever crap comes out of the mouth of those billionaires regarding how they made it.
ac29 3y ago
>Currently half the Berkshire portfolio is in apple. This isnt right. Roughly half of their portfolio of publicly traded companies is in Apple, but they have quite a few 100% owned subsidiaries that are not publicly traded (and a lot of cash, etc). According to the most recent numbers I could find [0], Apple is slightly over 20% of their total holdings. [0] https://www.cnbc.com/berkshire-hathaway-portfolio/ https://www.cnbc.com/berkshire-hathaway-portfolio/

by jraby3 3y ago

candiodari 3y ago

I don't understand where this Berkshire reverence comes from. Buffet didn't become rich through stocks. His accomplishment is to stay rich by investing, primarily in insurance contracts, and it does look like that is a good way to summarize Berkshire: it's a backend investment fund for his insurance business. It makes his large insurance contracts a lot more competitive. And about that part, he's very tight lipped. He invests well, but he's hardly the only one, and Berkshire would not work without the backend insurance business generating the amounts of funds he has to invest in the stock market. So all of his advice is mostly pointless, unless you have 100 billion lying around. I'm saying: if you want to beat Berkshire financial performance, they key to that ... is not investment. Which is the great con Buffett pulls. He shows large amounts of money and a very prudent investment strategy, and with that attracts funds to run his insurance business. NOT the other way around. This is the central component of a huge insurance business: you need a LOT of money, available as capital, to run it. To be fair, I've never heard of him lying about this either, but he's not exactly forthcoming with this information. He also does remarkably little investing with the time he has. Clearly he's spending the vast majority of his time on his insurance business, not his investment business.

bombcar 3y ago
The vast majority of Berkshire’s returns come down to identifying strong businesses, acquiring them, and providing them nearly unlimited free capital.
jimhefferon 3y ago
This is interesting, and I have not heard it before. Thanks. But I'm not really interested in WB so much. I'm more interested in his claims about investing. I understand him to say that he has done well over decades, better than the broader market, with Value Investment. Is that true?
loumf 3y ago
Another big part of it is the tax structure of a conglomerate. He is able to take cash out of See's Candies and Daily Queen (where they cannot do any good) and put it into big capital investments in Trains and utility infrastructure -- he can do this tax-free. If you tried to replicate his strategy, but could not hold 100% of the companies, you'd have to constantly sell stock or collect dividends to do the reinvestment and would incur taxes along the way.
tim333 3y ago
>Buffet didn't become rich through stocks. That is untrue. That's exactly how he became rich. Although his dad was wealthy he deliberately took no money from him and started from zero. He started stock investing and ran an early hedge fund, the Buffett Partnership investing for others and taking a cut of the profits. In the 1969 after becoming a multi millionaire and closing that he moved to running Berkshire Hathaway. At Berkshire there is a mixture of stock investing and running businesses. He was briefly ranked the richest man on earth but started giving his shares away to charity. If it was not for the charity thing he'd be up there with Elon.
- seec 3y ago
  At least that's the mythology he wants you to believe. But if you truly believe that I'm going to say you need to take a hard look at how humans really operate and stop taking stuff said as truth. Because even when people say some true things, there is ALWAYS some hidden information that changes the overall look. It's foolish to believe whatever crap comes out of the mouth of those billionaires regarding how they made it.

ac29 3y ago

>Currently half the Berkshire portfolio is in apple. This isnt right. Roughly half of their portfolio of publicly traded companies is in Apple, but they have quite a few 100% owned subsidiaries that are not publicly traded (and a lot of cash, etc). According to the most recent numbers I could find [0], Apple is slightly over 20% of their total holdings. [0] https://www.cnbc.com/berkshire-hathaway-portfolio/ https://www.cnbc.com/berkshire-hathaway-portfolio/