Author Topic: When were the times Buffett "market timed?"  (Read 1759 times)

stahleyp

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 2468
When were the times Buffett "market timed?"
« on: February 09, 2018, 01:03:30 PM »
The only times I can think of was when he closed down his partnership in the late 1960s and then he wrote in Oct 2008 that he "So ... Iíve been buying American stocks. This is my personal account Iím talking about, in which I previously owned nothing but United States government bonds."

Does anyone else know of any times Buffett has been out of stocks (more or less completely)?
Paul



rros

  • Sr. Member
  • ****
  • Posts: 449
Re: When were the times Buffett "market timed?"
« Reply #2 on: February 09, 2018, 02:45:23 PM »
This is my opinion only. I think he market-timed all throughout his LLC. The evidence is when he states that some of his investments would perform better in market downturns. As they did. This suggests market conditions influenced his purchases to some degree. Or at least, had some consideration on his decision-making.

That, as opposed to what he has been broadcasting the last couple of decades that it doesn't matter when you purchase as long as you have concluded there is value to be had.

BG2008

  • Hero Member
  • *****
  • Posts: 662
Re: When were the times Buffett "market timed?"
« Reply #3 on: February 09, 2018, 03:41:49 PM »
"Measured against interest rates, stocks actually are on the cheap side compared to historic valuations," Buffett told CNBC on Monday. "But the risk always is interest rates go up, and that brings stocks down."

 Feb. 27, 2017

Dynamic

  • Full Member
  • ***
  • Posts: 204
Re: When were the times Buffett "market timed?"
« Reply #4 on: February 09, 2018, 03:51:17 PM »
I always wonder how much is timing and how much is pricing. Pricing to a high margin of safety often produces results that look like market timing.

The partnership had three broad categories. General undervalued which may well be prone to market swings, control positions where Buffett could encourage the Board to distribute excess capital promptly returning value even in down markets, arbitrage which is largely immune to market swings.

Uccmal

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 3648
Re: When were the times Buffett "market timed?"
« Reply #5 on: February 09, 2018, 04:09:07 PM »
The only times I can think of was when he closed down his partnership in the late 1960s and then he wrote in Oct 2008 that he "So ... Iíve been buying American stocks. This is my personal account Iím talking about, in which I previously owned nothing but United States government bonds."

Does anyone else know of any times Buffett has been out of stocks (more or less completely)?

Paul, Why are you asking... Has he indicated he is out of stocks right now? 

To answer your question he has always market timed, IMO.  The late 60s you mention; early/mid 70s when he was buying everything in sight; and 2008/09 are the most obvious.  By its nature,  value investing is market timing for the most part. 
GARP tending toward value

Cigarbutt

  • Hero Member
  • *****
  • Posts: 591
Re: When were the times Buffett "market timed?"
« Reply #6 on: February 09, 2018, 06:42:06 PM »
One would have to define market timing.
I remember reading the following which really helped with perspective:
http://brooklyninvestor.blogspot.ca/2014/03/buffett-market-timer-part-1-partnership.html

There are five parts.

Tim Eriksen

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 646
Re: When were the times Buffett "market timed?"
« Reply #7 on: February 09, 2018, 08:30:03 PM »
I always wonder how much is timing and how much is pricing. Pricing to a high margin of safety often produces results that look like market timing.

The partnership had three broad categories. General undervalued which may well be prone to market swings, control positions where Buffett could encourage the Board to distribute excess capital promptly returning value even in down markets, arbitrage which is largely immune to market swings.

+1  It is all about price.

rros

  • Sr. Member
  • ****
  • Posts: 449
Re: When were the times Buffett "market timed?"
« Reply #8 on: February 09, 2018, 08:58:07 PM »
Quote
By its nature,  value investing is market timing for the most part.
Agree. Not just price. If "only price" were true you could sit on an investment for years w/o showing Buffett's 20+% returns. Have seen this first-hand waiting on cigar puffs to yield large gains. Prior to, there were many years of zero yield crops. Shouldn't a value investor try to assess which catalyst will catapult price? And once established, shouldn't the "when" question follow?

Value^2

  • Full Member
  • ***
  • Posts: 147
Re: When were the times Buffett "market timed?"
« Reply #9 on: February 10, 2018, 03:16:45 AM »

Quote
ďI thought that he would do it one day, but did not know it would be at that moment. It was an enormous step at a completely hostile time. There was one moment when I honestly did not think the deal would go ahead. It was the only transaction of that size at that timeÖ.My decision was to evaluate whether, against that backdrop, the share price would rise or not and whether the deal would really be made despite the crisis. I then sold a part of my stake, which annoyed some people. I didnít know how the AB board worked. I had met [August Busch] the Fourth only once at a baseball game and spoken personally to the Third about 15 years earlier. I had never spoken to them by phone or had any relationship. This happens sometimes with companies in which we invest. We had a big investment in AB, but not as big as we have in Coca-Cola, for example. I liked the company and we had been part of it for many yearsÖIt would be difficult to lose money there just as it would be difficult to make any great gain. It was a solid option, but nothing particularly exciting.Ē
https://www.santangelsreview.com/2014/04/28/book-review-and-lessons-from-dream-big-a-glimpse-inside-the-strategies-and-tactics-of-3g-capital/
original post: http://www.cornerofberkshireandfairfax.ca/forum/berkshire-hathaway/3g-background-why-buffett-likes-them/msg285843/#msg285843
So basically he was acting based on how share price would fluctuate over short term. This might first time he 'accidentally' admits it.