Warren Buffett Now Has Nearly $200 Billion. In Cash.
It's a Berkshire weekend. In fact, it's a "Woodstock for Capitalists" weekend.
On Saturday, Warren Buffett's legions of disciples converged on Nebraska to wander an elaborate flea market and consult the Oracle, who held court in an Omaha arena that was "already three-quarters full within half an hour of the doors opening," as the AP noted.
Typically, Berkshire's annual shareholder meetings are jovial affairs, but this one was a bit somber. For the first time, Charlie Munger didn't attend.
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I don’t think Buffett’s apparent cash hoarding trend is (just) about age. There just isn’t much of anything to buy. He’s too smart to spend 30x earnings for tech. He’s reducing Apple. Even Apple is reducing Apple. To meet shareholder expectations he and his minions have got to find very large, sensible options with long runouts in their futures. Name four. His company now boasts the largest book value of any in the S&P. Just about anything he could buy would likely dilute his ROI on that huge pile. It’s just the math. Berkshire is the most successful true conglomerate in history. Oh, and most of the rest are gone, or pale reflections.
Caterpillar or Deere. Either one is an excellent target for Berkshire. Great businesses, with moats, long runways, both are strong in autonomous equipment, and the world will always need construction, mining, infrastructure and food, and neither is a particularly complicated business to understand.
Now, today’s price may not be it. Eventually I think one of them will go.
Or Komatsu, given their interest in Japanese companies.
Waiting patiently for the next big market drawdown…maybe or more likely not the kind of buying opportunity as 2008-9, but that’s when the elephant guns wil come back out of their dusty locker. Meanwhile sleeping soundly with a tax-efficient machine printing money safely at a modest rate of return i can live with and on…