“When giants speak humans have no choice but to listen” Shaun Fox
And if you are paying attention friends then the real gold is in what the mighty are not saying.
The giant in question here is Warren Buffet, undeniably the most successful investor of our time.
I say investor and not share trader as he is commonly referred to, as in my opinion these titles could not be further apart.
The difference that i see is this, investors are buying in for the long term, adding value to the enterprise, even if it is just financial commitment and faith, now a share trader is someone watching stock numbers on a board, gambling against bullish and bearish odds, or trading with others money and needing a fluctuating market so that they can constantly buy and sell some of your portfolio so they can justify a new round of fees and commissions.
Warren Buffet’s investment strategy is based on the Value Investing model, this is where you buy shares at a price that is less than its intrinsic value, Warren then added his own spin on this by “finding an outstanding company at a sensible price” rather than generic companies at a bargain price.
Warren invests in companies and good value businesses where there is a long-term opportunity to hold and return profits and has made not a few aggressive take overs of these companies through the years.
It is safe to say that Warren and his company Berkshire Hathaway are not afraid to get in the market and pursue opportunities where they find them.
What interest me the most are the times when Warren and Berkshire Hathaway are not investing and purchasing.
Warren famously took his investors’ money out of the market in a lead up to a recession and invested the money into a textiles company “Berkshire Hathaway”, even after that recession he kept his money out of the market in any meaningful way until the end of the next recession, at which time he re-entered the market aggressively.
We have seen a pattern of Warren being able to read the market and anti to what you may think, he is not afraid of a recession, in fact he has been quoted more than once expressing his positive outlook on recession as this is where some of his best purchases have come from.
Berkshire Hathaway is currently stockpiling cash and is holding around $122.4 Billion, to give perspective and to use Warrens own previous words Berkshire Hathaway would be better to be holding closer to $30 Billion. especially since Berkshire Hathaway is an investment company.
Berkshire Hathaway has made no significant purchases for 3.5 years.
What does this mean? It is a very good indicator 3.5 years ago that a recession was coming, if Warren was a weather-vane, we would be looking to him to see which way the winds were blowing as he seems to be more reliable than the evening weather report.
This is not a bad thing, it means that opportunity is about to knock, if i had to make a statement about why they are stockpiling money, the obvious reason is that they are getting their buying fund ready.
Exciting times ahead my friends and lots of opportunities .
Always listen for the silences.