Warren Buffett Sure Looks Like He Knows Something Is Going to Happen
Warren Buffett isn't known for following the trends when it comes to investing. For example, last year, as indexes were soaring, the billionaire chairman of Berkshire Hathaway was a net seller of stocks and built up a record level of cash -- the cash level now stands at $347 billion. As investors showed their exuberance, especially for technology and growth stocks, Buffett remained on the sidelines.This isn't exactly a surprise though. Buffett doesn't invest heavily in tech stocks. He favors looking for undervalued players in other industries and getting in on them before the rest of the market discovers their potential. He then sticks with these investments for the long term, and this strategy has been a winning one for Berkshire Hathaway, helping it deliver a compounded annual gain of nearly 20% over five decades.The increase in S&P 500 valuations also surely represented a red flag for Buffett due to his focus on value. With the S&P 500 Shiller CAPE ratio reaching a level it's only attained twice before, stocks were looking expensive -- and that means bargain hunter Buffett wasn't doing much shopping.Continue reading
Warren Buffett isn't known for following the trends when it comes to investing. For example, last year, as indexes were soaring, the billionaire chairman of Berkshire Hathaway was a net seller of stocks and built up a record level of cash -- the cash level now stands at $347 billion. As investors showed their exuberance, especially for technology and growth stocks, Buffett remained on the sidelines.
This isn't exactly a surprise though. Buffett doesn't invest heavily in tech stocks. He favors looking for undervalued players in other industries and getting in on them before the rest of the market discovers their potential. He then sticks with these investments for the long term, and this strategy has been a winning one for Berkshire Hathaway, helping it deliver a compounded annual gain of nearly 20% over five decades.
The increase in S&P 500 valuations also surely represented a red flag for Buffett due to his focus on value. With the S&P 500 Shiller CAPE ratio reaching a level it's only attained twice before, stocks were looking expensive -- and that means bargain hunter Buffett wasn't doing much shopping.
