True investor must be open minded wherever profits are possible, he/she will focus. In his opinion, AAPL is the best bet, he will continue to DCA/hold that.
Among all the S&P you see which one is dropped less
Many times I indicated, we are like driving tiny car in SF streets, but buffet is big double truck driving SF streets are tough for him!
By shear size of my multi-billions, it is not easy to manage or maintains it. Taxation and inefficiency comes against their growth.
Second, he becomes part of S&P and he has to get a company which grows faster than S&P. If you watch him, with Russian war and self oil embargo, oil industry will strongly hold for long.
He purchased OXY and continue purchase OXY upto 50% stake and it is 100% up with P/E at 6 level.
It is very difficult to understand his deep long shot, that is why he is strong. Because of that, his BRK YTD and Year performance is positive while others are negative.
He is human Computer/Genius times his shot properly.
Anyway, I do not want to go further on Berkshire or such discussion, let me stop here. Thanks
Drop less also means rebound less, which might not be desirable when market rebounds. This is simple risk/reward trade off. Itâs elementary investment concept. Opting for stability is not the way to go should you desire to become wealthier.
By the same token, concentrating more adds more risk but is also needed for wealth generation.
If the drop is depending on fundamentals, rebound may not be there.
If the drop is by market flutuations, rebound will be there as fluctuation are noise!
True, that is main reason, fundamentals are important. Before taking a decision to put many billions in OXY or AAPL, his team would have thoroughly researched and created a report of 500 pages minimum to make sure the risk is covered.
Even for 10 millions project in our office, a team of experts are discussion for many days, unit test, cross test and finally implement.
Simlarly, big funds analysts create report, discuss with team of experts, get approval from managers, directors, VP and then execute the contracts with brokers.
All the risks, mitigation, backup plan everything considered. Even as we speak now, some of the big funds may be deep discussion (even sunday) about possible moves after FED meeting, preparing the trades ahead and give a final go ahead after FED conference. Everything kept secret. This is the industry never sleeps !
I always say, market actions are pre-planned and It is not taken at split second decision like us retailers do.
Rebounds will be there for all the companies you listed above because all are market leaders in their own right and have fundamentals to back them. Their drop is mostly due to macro.
Rebound doesnât imply will make a new ATH, even if can, may take years or decades.
Concentrate bets donât mean always invest new money into the same stock(s). Is a misinterpretation of what WB said. If a higher return stock arises, should invest the new money in that one. Say, you have $1M invested in a stock that you think could yield 100x over 20 years. After 10 years, you have new $1M, if stock has already jumped 25x, left 4x to go and a new stock can return 20x over 10 years, you should invest in that new stock. Whether you should sell the first stock to invest in the new stock depends on many issues e.g. taxation⌠margin, not advisable because you are assuming you are good at market-timing and trading. In short, concentrate bets not equal to bet on one stock.
Also, when he made those statements, he has in his back of his mind, the typical profile of a retail investor. One canât mindlessly apply with unbound range⌠mathematically term.
Concentrated bet means put your money into the stock that grows the most at any given time. Out of the entire stock market, there is always only one stock like that. So put all your money into that one stock. Pure and simple. And you should keep pouring your money into this same stock until another stock replaces it as the leader, in which case you will need to move all your money into that other stock.
In the perfect scenario, you should invest all your money every single day into the stock that grows the most in that day. If you are able to repeat this process successfully, you will become the richest person on earth in less than a year.
Since no one has a crystal ball, you can only approximate this process. Maybe try investing all your money every decade into the stock that grows the most in that decade. You have a better chance at success if the time interval is prolonged.
âŚrental operators are in no mood to pay peak prices** . They might bite after massive discounts â discounts that homebuilders are not nearly desperate enough yet to offer.
Those discounts are BS. No lot premium and mortgage-rate buy downs. Their profit is still very good. Waiting for them to cut into the fat profit.
The obvious solution would be to cut prices, but thatâs like the last option for homebuilders for a variety of reasons, including financial metrics that Wall Street looks at. Incentives come first.
Is there a historical precedent showing correlation between Sweden and US home prices? EU is a total mess with the natural gas crisis, inflation much higher than the US, and variable rate mortgages. If youâre trying to compare that to the US, then youâre just showing your ignorance. You seem to have no shame in that so carry on.
Despite all the doom and gloom headlines, builders are reporting solid profitability. Some are even reporting yr-yr revenue and profit growth.
Powell has stopped beating the markets. In his last press conference he did everything to pump up the market while not appearing openly dishonest about his inflation fight propaganda. I have a feeling that Powell has no intention to fight inflation and this will eventually lead to stagflation or hyperinflation and everything bubble including RE will crash.
You might want to check a chart of XHB and use some actual data other than your off-the-cuff opinions which are horribly inaccurate. Theyâre down from the peak but most stocks are. They are above 2020 levels and up from recent lows.
Try another time. YTD XHB down 25+% vs. 15% S&P or 5% Dow Jones.
And they will fall more, given that they are sitting on record inventory. Construction costs going up and RE prices coming down also sounds like a perfect recipe for disaster for them. All the other dominos of RE economy has fallen, may be they will fall the last.
