More BRK, closing in on 20% allocation!
So why so bullish on BRK? Is it absolute value? Relative value? Cyclical play?
What are a catalysts to get the stock moving? More buybacks? Mystery new purchase? Buffett finally putting cash hard to work?
One headwind is Apple valuation (very expensive and could come way down if we get a sell off).
Do you really like financials?
I do like BRK; it looks cheap... is it crazy cheap (to warrant big overweight)? Just trying to understand...
Just my opinion of course but its all of the above and then some. Apple may have been a huge home run, but that certainly didnt get fully priced into the shares. I bring up from time to time my mistake of buying BRK at $196 in Jan 2019 bc I liked the exposure to AAPL at $160(pre split) and all the financials...
I think buybacks will be solid, although somewhat muted as a result of the longer YE-Q1 blackouts requirements. But going forward I would expect repurchase figures to ramp, much more in line with the most recent Q than those before it.
Financials have also run, but again, BRK? Not so much. Insurance should be solid. Energy will continue rebounding. Heck this darn thing is basically flat y/y.
I view the spring as coiled. It can win as a cyclical, it can win if rates rise, it can win from these levels in so many different scenarios that the optionality becomes very appealing. Its only a matter of time before the money flow finds its way here as the value proposal between this and the rest of the market is too big to ignore. The upside will happen. Ive noticed this thing tends to move in quick bursts. Downside will be buffered by all the cash, the recovering economy, and buybacks. I see many scenarios where this could easily peel of 15-20% to the upside. I have a very hard time envisioning the same type of downside. $190 is very hard to picture. So I think the deck is stacked quite favorably here and as such, its time to bet big.
