He trimmed both positions in the prior quarter, too. Possibly, the uncertainty of the business climate and the business model led to Berkshire's quick reversal on the stock.īuffett also dumped 91% of his US Bankorp (USB) holdings and 59% of his Bank of New York Mellon (BK) stock. TSM did miss consensus revenue expectations in the fourth quarter and cut its capital spending by 10% for 2022. Munger also references the rise and fall of Intel INTC to demonstrate that a leading position in semiconductors can be fragile. In that interview, Munger describes the semiconductor business as "peculiar" and "difficult," because it requires significant and ongoing capital investment. Munger hinted at an explanation when he spoke at the February, 2023 Daily Journal DJCO shareholder meeting. It's not characteristic of Buffett to change course so quickly. Berkshire opened the TSM position in the third quarter. The headline of these fourth quarter liquidations is the sale of 51 million shares of Taiwan Semiconductor (TSM). The table below lists all eight companies and how many shares Berkshire sold in the last reported quarter. Three of them were significant divestitures. In the fourth quarter of 2022, Berkshire reduced its stake in eight companies. That happens when the stock's long-term potential deteriorates or gets outpaced by other stocks. At a minimum, it means he believes Berkshire's investing dollar can be better deployed elsewhere. When he closes or reduces positions, that's a signal. He tends to buy companies he can hold forever. Stocks Buffett Recently Soldīuffett is known for his long-term investing strategy. Click here to download it now and make 2023 your best year yet. Forbes’ top investment experts share 7 overlooked stocks for the year ahead in this exclusive report, 7 Best Stocks To Buy for 2023. Mispriced stocks are hiding in plain sight and present great investment opportunities in 2023. So while the stock portfolio seems concentrated, Berkshire's broader business holdings are more diversified. The conglomerate owns more than 70 companies outright, including Duracell, Geico Insurance and See's Candies. It's also worth noting that Berkshire Hathaway's business holdings go well beyond this stock portfolio. So he's less likely to be wrong, but better equipped to manage the consequences. Buffett has many times more resources and experience than the average investor. Still, this is an aspect of Buffett's investing strategy you don't want to imitate. Diversification also limits the upside of good investing decisions. But it's the other side of that equation where Buffett has an issue. ![]() Diversification limits the downside effect of bad decisions. In his words, "diversification is protection against ignorance." He's not wrong there. Buffett On Diversificationīuffett is famously against the practice of diversification. Berkshire is also concentrated in just four of the 11 economic sectors: technology, energy, finance, and consumer staples. The Apple position makes up nearly 40% of the portfolio. An obvious takeaway from the table is the lack of diversification.
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