No. of Recommendations: 6
This phrase by Warren at the last meeting, encapsulates everything.
Our debt
Sticky high inflation
Interest rates vs. equities
Pricy equities in general
Our internal politics
Wars in the world
All of the above warrant a higher cash position
No. of Recommendations: 2
Here is the quote, more or less, from the man himself:
'I don't mind, at all, under current conditions building the cash position, I think...when I look at the alternative..what's available in the equity markets and I look at the composition of what's going on in the world..we find it quite attractive'
more from the 2024 meeting on cash:
"I don't think anybody sitting at this table has any idea how to use it (cash) effectively and therefore we don't use it now at 5.4%, but we wouldn't use it if it was at 1%.."
As we close in on the anniversary of these comments, in the last 12 months or so, treasury bills have returned 4.8% vs. 7.60% on the SPX
No. of Recommendations: 18
WEB acknowledges that while it is possible to estimate a fair value, it is hard to predict the market in anything but the longest terms. In 1999 he gave the famous Sun Valley speech, warning the NASDAQ was overvalued at 2600. Eight months later it was at 5400, proving what an out of touch old traditionalist he was. Eighteen months later it was still higher than when he gave the lecture. From there it dropped to 1380 and it took the life of 17 year locust for it to recover.
WEB simply will not deploy cash unless he feels he is getting a good value. There may be better approaches over various time spans but his discipline is admirable.
