|
Why Buffett is not investing $55 billion cash? |
26 Aug 14 08:30 AM |
Everyone is curious to know what Warren Buffett would do with the cash pile of $55 billion sitting in Berkshire Hathaway. Probably Buffett is not happy with the valuation of the companies as the Bull Run is helping several stocks to move up the ladder. This may be the main cause of worry for the value Investors and hence Buffett is not using the huge pile of money for investing. Buffett has a history of patience and discipline when it comes to investing the company’s cash. He has a unique record in investing and he is the living legend of value investing who never holds much cash in hand. Buffett usually limits his exposure to Old Economy stocks. As for why Warren Buffett doesn't invest in technology, the Oracle himself explained this in detail way back in the year 1999. Buffett made the "I don't understand" remark when asked about why he was not investing in Technological companies. After shunning the entire tech sector for the majority of his career, Warren Buffett suddenly picked up stakes in IBM in the year 2011 for his company, Berkshire Hathaway. Probably Buffett was advised by his close advisors to pick up a stake in IBM. Times are changing now and we will not be surprised if he invests the cash in emerging technology. However he would stick his guns on other issues such as management quality and valuation. If you want to invest like Buffett then it is necessary for you to keep track of our next monthly meet. We are a staunch follower of Buffett on several issues but we do invest in technological revolution for the simple reason that emerging businesses, particularly driven by technology, have created colossal wealth for their shareholders. For example TCS is more valuable company compared with ITC,RIL, ONGC and Hindustan Unilever. In fact TCS is the most valuable company today in the Indian bourses though it has a limited listing history. ITC’s m-cap as on Friday is about 2.75 lakh crore while that of TCS is close to 4.85 lakh crore. ITC is a 103 year old company which has diversified presence in cigarettes, hotels, paperboards & specialty papers, packaging, agri-business, packaged foods & confectionery, information technology, branded apparel, personal care, stationery, safety matches and other FMCG products. The 81 year old Hindustan Unilever has interest from food & beverages to home & personal care which are part of everyday life. With several decades of presence in the business, strong balance sheets, set business models, brands developed over years and above all, ability to grow at rapid pace, these companies are lagging behind TCS as they do not have technological advantage. Even in US companies such as Google, Apple and Facebook command premium over the old generation companies such as GE and Ford. If you have missed TCS or Infosys you do not have to worry now. We are living in exciting times and hence it is possible to accumulate wealth using the new generation companies. The array of incredible advances in science and technology should give us a better return to our portfolio than ever before. As informed by Robert F. Kennedy we are living in exciting time and we have to dream the mission impossible. https://docs.google.com/forms/d/1VXSX5aOgCk1UyvZtLl0nKbwhnITipeVq_zkd3K9qVI4/viewform PS: Please read the disclaimer before investing any money in our ideas. |
How is it going to be in the year 2018? 01 Jan 18 07:57 AM
Infosys completes buyback! 25 Dec 17 09:15 PM
This one quote of Peter Lynch can help you to make millions! 17 Dec 17 10:56 PM
December investors meet is scheduled on 17th! 10 Dec 17 10:16 PM