Your Financial Future
Warren Buffett is widely recognized as one of the best overall investors in America. Buffet’s company Berkshire Hathaway routinely out performs leading indices. Berkshire is a conglomerate. That was a term that had a bad connotation in the 1980s, but this is not the case with Berkshire. They are major stock holders in companies such as Coca Cola, Citigroup, Chevron Apple and Kraft Heinz. In addition, they own outright, many companies including Fruit of the Loom, Duracell, Dairy Queen, Pilot Truck Stops and Benjamin Moore Paint.
Berkshire will only purchase companies that are industry leaders, successful and can be bought for a fair price. Warren does not believe in over paying for anything. He has a huge amount of cash on hand and can invest in anything that interest him. He does not pay dividends or buy back lots of shares of his company. He also does not believe in stock spits to reduce share prices. If you want to buy one A share of Berkshire stock, you need about $615,000!
Buffett recently sent his yearly letter to stock holders. This is a widely anticipated annual event. In this year’s letter, Buffett talks about his sister, Bertie. She is a savvy, long-term investor in Berkshire. She has some knowledge, but no formal training. Warren says, “A major asset for Bertie and investors like her: are sensible, instinctively knowing that pundits should always be ignored. After all, if she could reliably predict tomorrow’s winners, would she freely share her valuable insights and thereby increase completive buying? That would be like finding gold and then handing a map to the neighbors showing its location. This is Warren’s way of saying be careful of all the people pitching investments that are supposed to make you rich.
Buffett is a long-term investor who does not believe anyone can time the market consistently. He stays invested and has a long-term focus. He believes portfolios should be spread over many investments. This eliminates the chance that one large company could vastly go down and ruin your overall performance. He believes if the markets continue their historical trajectory, you should do good over time.
Some other investing tips from Buffett include: “Panic can cause markets to seize occasionally and Berkshire ability to respond immediately in those cases both with great sums and certainty of performance may offer us an occasional large-scale opportunity. For whatever reasons, markets now exhibit far more casino-like behavior than they did when I was young. The casino now resides in many homes and daily tempts the occupants.” Buffet is now 93 and has had stock market success for decades. He is conservative in many ways and now has an estimated $157 billion in cash. This is a much larger position than most companies.
Buffet lost his long–time vice chairman Charlie Munger last November at age 99. Charlie is called the architect while Warren served as general contractor. Munger’s key advice to Buffett years ago was to “purchase businesses at fair prices and give up buying fair businesses at a wonderful price.” That was the creed that Berkshire Hathaway has lived by. The results prove that this approach works. From 1965 through 2023, Berkshire attained a 19.8% gain while the S&P 500 did 10.2% during that same time period.