The S&P 500 is down 19% in 2022, but stocks still don’t come cheap for Warren Buffett’s billionaire partner Charlie Munger at Berkshire Hathaway.
“All my adult life, I never waited for better terms and hoarded cash,” Munger said in an interview in late 2022. “I just invested in the best I could find.”
Still, he admitted Berkshire Hathaway has billions in cash. The reason isn’t that Buffett and Munger think they can wait until the stock price drops even further. This is a bet known as “market timing”.
Instead, Munger is blunt, saying Berkshire won’t buy anything.
That’s an amazing statement. Despite a stock market slump that has probably resulted in dozens or hundreds of stocks being sold at bargain-level prices, the world’s most famous value investor feels no temptation to dive in.
Financial industry giants like Berkshire Hathaway are limited in what they can do. By law, major financial institutions and billionaire investors cannot buy more than his 5% stake in a company unless they file his 13-D return as beneficial owner with the Securities and Exchange Commission. .
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This essentially keeps Buffett out of the world of microcap investing — unless Berkshire Hathaway decides to jump through these regulatory hoops. Even if we did find one, the rise would be barely noticeable for Berkshire Hathaway. Even if $2 million in stock turned him into $20 million, the needle wouldn’t move for a company that collects hundreds of millions of dollars in dividends each year from Coca-Cola stock alone.
But for the average investor, it’s a different story. The world of startup investment, legally closed to ordinary investors for decades, is now open to the masses.
Sensate rose to prominence in Silicon Valley after patenting an anti-stress device that contributed to a 363% year-over-year revenue growth at a time when S&P 500 companies reported revenue growth of just 11% on average. One of the companies that is making headlines. Sensate, which earned him $2.8 million in 2021, is the kind of company that Buffett and other major financial institutions can’t claim meaningful stakes in, but for a limited time, everyday investors are here. can invest.
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Billionaire Charlie Munger reveals why Berkshire Hathaway has $88 billion in cash
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