The Buffettster

solidpro

Warren Buffett jumped from about 3% cash allocation to 12%, 1 year before the dot-com crash. He went from under 10% to 23%, 3 years before the 2008 Financial crisis. In the last 2 quarters, has jumped from around 15% cash to 28% cash. 

Timing or time in? Decision time!

If only I had $330bn in cash to play with, I could afford to switch between 10% and 30% cash allocation and not get too worried about running out.

InvesterJones

Hasn't he started buying again recently?

Brie

I wonder what he's been selling to get the cash.  I suspect that the stock market might do a bit of wobbling in the US in particular in the coming weeks.  

Hoenir

Berkshire Hathaway is predominantly an insurance company not Warren Buffet's personal plaything. When you've billions of $ under management there's limited options as to where to invest it. 

Reaper

It's a mistake to assume Buffet can predict crashes. He can't and says himself he can't. When buying he ignores macro economic factors and just looks at the stock he is thinking of investing in. Right now the US market is very expensive in P/E terms so he is finding few of the value opportunities he likes. If he can't find anything he likes then he keeps it in cash until he can. A market correction will bring back those opportunities. Until then cash is paying quite well particularly as the Fed is changing its mind about cutting interest rates.

Adyinvestment

3% cash allocation to 12%, 1 year before the dot-com crash

10% to 23%, 3 years before the 2008 Financial crisis

last 2 quarters, has jumped from around 15% cash to 28% cash. 

.... so he is pretty rubbish at timing the markets then!

masonic

Adyinvestment said:

3% cash allocation to 12%, 1 year before the dot-com crash

10% to 23%, 3 years before the 2008 Financial crisis

last 2 quarters, has jumped from around 15% cash to 28% cash. 

.... so he is pretty rubbish at timing the markets then!

It is far from established that those correlations were causative, but supposing that they were, 3 years is quite rubbish when it comes to timing crashes. Missing out on 3 years growth can be worse than riding out a crash.

I personally think that after two great years and a much longer period of fairly sustained growth, we are long overdue a prolonged downturn. But the only thing I am doing about it is making absolutely sure I am not invested above my risk tolerance.

Hoenir

masonic said:

Adyinvestment said:

3% cash allocation to 12%, 1 year before the dot-com crash

10% to 23%, 3 years before the 2008 Financial crisis

last 2 quarters, has jumped from around 15% cash to 28% cash. 

.... so he is pretty rubbish at timing the markets then!

It is far from established that those correlations were causative, but supposing that they were, 3 years is quite rubbish when it comes to timing crashes. Missing out on 3 years growth can be worse than riding out a crash.

I personally think that after two great years and a much longer period of fairly sustained growth, we are long overdue a prolonged downturn. But the only thing I am doing about it is making absolutely sure I am not invested above my risk tolerance.

Bekshire Hathaway has exposure to many sectors of the US economy through it's trading subsidaries. As a result have a far better finger on the pulse of what's actually happening on the ground than people playing the markets from afar. 

masonic

Hoenir said:

masonic said:

Adyinvestment said:

3% cash allocation to 12%, 1 year before the dot-com crash

10% to 23%, 3 years before the 2008 Financial crisis

last 2 quarters, has jumped from around 15% cash to 28% cash. 

.... so he is pretty rubbish at timing the markets then!

It is far from established that those correlations were causative, but supposing that they were, 3 years is quite rubbish when it comes to timing crashes. Missing out on 3 years growth can be worse than riding out a crash.

I personally think that after two great years and a much longer period of fairly sustained growth, we are long overdue a prolonged downturn. But the only thing I am doing about it is making absolutely sure I am not invested above my risk tolerance.

Bekshire Hathaway has exposure to many sectors of the US economy through it's trading subsidaries. As a result have a far better finger on the pulse of what's actually happening on the ground than people playing the markets from afar. 

Do you think it has increased its cash position from 15% to 28% because it is predicting an imminent stockmarket crash? Or could it be that it just isn't seeing good opportunities to deploy that cash, ultimately being driven by a value investing philosophy?