Author Topic: Zerohedge - do what buffett says not what he does  (Read 6346 times)

Evolveus

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Zerohedge - do what buffett says not what he does
« on: May 07, 2012, 05:17:54 PM »
http://www.zerohedge.com/news/do-what-buffett-says-not-what-he-does

This Zerohedge article criticizes BRK and Buffett for saying that cash is the riskiest asset, yet BRK has their highest cash balance on record.  I think Zerohedge is muckraking - for one, given the large insurance ops and super cat exposures, they need a sizable slug in the event of said super cat.  Also, it seems that BRK is focusing more on growing earnings from Operating companies so that when WB isn't around they are not as dependent on his investing prowess.  So naturally as they grow cash flow from ops, their cash balance will continue to increase incrementally, and possibly faster than they can put it to good use given their size.  As Munger says, "There are worse problems to have..."

If they intended on just holding cash forever and letting it build then that would be risky, just as Buffett is saying - ie, don't go bury your cash in the backyard.  Also a glance at that graph at the bottom of the article clearly shows that cash balance going down considerably in down markets. 

Given that cash from Ops is coming in faster than they can deploy it, what does one make of the high cash balance in relation to possible danger in the overall market or lack of value opportunities?


Liberty

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Re: Zerohedge - do what buffett says not what he does
« Reply #1 on: February 01, 2020, 10:32:08 AM »
Before you read anything on ZH, read this:

http://www.propornot.com/2016/10/zero-hedge.html

scorpioncapital

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Re: Zerohedge - do what buffett says not what he does
« Reply #2 on: February 01, 2020, 12:53:57 PM »
Cash is the riskiest asset ...long term. But nobody has defined long term. Also one hasn't defined the level of cash that is risky or not.

Dynamic

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Re: Zerohedge - do what buffett says not what he does
« Reply #3 on: February 03, 2020, 04:15:38 AM »
Wikipedia editors have very strict guidelines about consensus opinion and not giving undue weight to fringe viewpoints, including reliance on secondary Reliable Sources, both for establishing the notoriety/notability of having an article and for discussion of notable criticial reception (positive and negative) of the subject, so it's often a useful summary as a starting point:
https://en.wikipedia.org/wiki/Zero_Hedge

Generally, I became aware of Zero Hedge's recent Twitter ban, but I try not to reward them with advertising revenue or pollute my Google curated news feed by clicking through to them. Likewise, I'm no fan of Zacks Investment Research and one or two others who seem to reveal their automated text generation all too often when they report ridiculous numbers (often zero) for various fundamentals of BRK.B, so I try to avoid clicking through from Yahoo Finance links to their articles.

If I want a more reliable Ludwig von Mises Austrian School view of current economics and investing and a measured usually somewhat bearish analysis, I'd much rather read something like The Leithner Letter, which is well referenced (albeit lengthy) and gives pause for thought and some alternative viewpoints to consider, and is written from the point of view of a Graham/Buffett type value investor with a decent 20-year track record despite significant cash and bond allocation. I generally, pay little heed to macroeconomics, but Chris Leithner provides a well reasoned non-mainstream view that's worth considering and weighing against my usual considerations such as time-in-the-market to compound wealth beating attempts at timing the market.

Returning to Berkshire specifically, if cash remains closely matched to float most of the time, I would not be concerned. I'd then expect cash to decline compared to float if they can make a well-priced acquisition or substantial additional equity investments, especially during market turmoil.
« Last Edit: February 03, 2020, 04:18:00 AM by Dynamic »

wachtwoord

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Re: Zerohedge - do what buffett says not what he does
« Reply #4 on: February 03, 2020, 04:56:07 AM »
Before you read anything on ZH, read this:

http://www.propornot.com/2016/10/zero-hedge.html

May all be true, still name 1 better source for news (not state propaganda) this day and age?

I read it, yet I don't leave my brain at home while doing so.
"Beware of he who would deny you access to information, for in his heart he dreams himself your master"

DooDiligence

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Re: Zerohedge - do what buffett says not what he does
« Reply #5 on: February 03, 2020, 05:30:22 AM »
Wikipedia editors have very strict guidelines about consensus opinion and not giving undue weight to fringe viewpoints, including reliance on secondary Reliable Sources, both for establishing the notoriety/notability of having an article and for discussion of notable criticial reception (positive and negative) of the subject, so it's often a useful summary as a starting point:
https://en.wikipedia.org/wiki/Zero_Hedge

Generally, I became aware of Zero Hedge's recent Twitter ban, but I try not to reward them with advertising revenue or pollute my Google curated news feed by clicking through to them. Likewise, I'm no fan of Zacks Investment Research and one or two others who seem to reveal their automated text generation all too often when they report ridiculous numbers (often zero) for various fundamentals of BRK.B, so I try to avoid clicking through from Yahoo Finance links to their articles.

If I want a more reliable Ludwig von Mises Austrian School view of current economics and investing and a measured usually somewhat bearish analysis, I'd much rather read something like The Leithner Letter, which is well referenced (albeit lengthy) and gives pause for thought and some alternative viewpoints to consider, and is written from the point of view of a Graham/Buffett type value investor with a decent 20-year track record despite significant cash and bond allocation. I generally, pay little heed to macroeconomics, but Chris Leithner provides a well reasoned non-mainstream view that's worth considering and weighing against my usual considerations such as time-in-the-market to compound wealth beating attempts at timing the market.

Returning to Berkshire specifically, if cash remains closely matched to float most of the time, I would not be concerned. I'd then expect cash to decline compared to float if they can make a well-priced acquisition or substantial additional equity investments, especially during market turmoil.

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required to recite, by memory, Leithner Letter No. 241-244, before being sworn in.
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Liberty

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Re: Zerohedge - do what buffett says not what he does
« Reply #6 on: February 03, 2020, 06:12:47 AM »
Before you read anything on ZH, read this:

http://www.propornot.com/2016/10/zero-hedge.html

May all be true, still name 1 better source for news (not state propaganda) this day and age?

I read it, yet I don't leave my brain at home while doing so.

It is state propaganda, is the point. You just seem to personally prefer Russian state propaganda designed to make westerners hate and mistrust their own governments for the benefit of Putin and his mafia-state cronies.

rkbabang

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Re: Zerohedge - do what buffett says not what he does
« Reply #7 on: February 03, 2020, 07:35:07 AM »
Before you read anything on ZH, read this:

http://www.propornot.com/2016/10/zero-hedge.html

May all be true, still name 1 better source for news (not state propaganda) this day and age?

I read it, yet I don't leave my brain at home while doing so.

It is state propaganda, is the point. You just seem to personally prefer Russian state propaganda designed to make westerners hate and mistrust their own governments for the benefit of Putin and his mafia-state cronies.

Everyone the liberal elites don't like are obviously puppets of Putin.

Everything is propaganda of one sort or another.  Don't get all of your propaganda from the same source.  99.9% of everything published in the United States is (willingly or unwillingly) doing the deep-state's bidding, so it is sometimes refreshing to get another side... any other side.

BTW, Make sure you check under your bed at night for Russians.  They are everywhere.  Hillary said so.

Gregmal

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Re: Zerohedge - do what buffett says not what he does
« Reply #8 on: February 03, 2020, 07:43:23 AM »
The whole Russian propaganda thing is clear bullshit. It’s no different at all than the Trump “fake news” cries. It’s meant to train people like dogs to immediately write off anything that doesn’t vibe with said parties agenda. Those that scream either, do so arrogantly assuming the recipients are idiots and not capable of reading and deciphering, responsibly and in a manner capable of figuring out the truth, for themselves.

rkbabang

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Re: Zerohedge - do what buffett says not what he does
« Reply #9 on: February 03, 2020, 07:53:21 AM »
The whole Russian propaganda thing is clear bullshit. It’s no different at all than the Trump “fake news” cries. It’s meant to train people like dogs to immediately write off anything that doesn’t vibe with said parties agenda. Those that scream either, do so arrogantly assuming the recipients are idiots and not capable of reading and deciphering, responsibly and in a manner capable of figuring out the truth, for themselves.

Yup.  Look at Tulsi.  Even the Democratic Party's own candidates are Russian plants working for Putin the moment Hillary doesn't like them.