Buffett holds cash to set new record

arts. Hong Baoshan\’s annual Berkshire shareholders meeting is a time for shareholders to pay tribute to Buffett. Berkshire owns domestic businesses in many different industries such as railroads, insurance, energy, industrial and consumer goods, and also holds a stock market investment portfolio of approximately US$360 billion. Berkshire Hathaway\’s earnings report provides another window into the U.S. economy.
Buffett said that the three companies are the best companies. He reduced his holdings in Apple only because of the tax burden and had nothing to do with fundamentals. This year, there would be no Charlie. Munger\’s first Berkshire shareholder meeting was also the sixtieth time Buffett participated in a lengthy question-and-answer period.
Everyone wants to find future investment opportunities from the movements of Berkshire Hathaway. In the first three months of this year, nearly US$20 billion worth of stocks were sold while buying US$2.7 billion. In particular, in the fourth quarter of last year, it reduced its holdings of approximately 10 million Apple shares. Accounting for 1% of his shareholding, in the first quarter of this year, he once again cut his Apple shareholding of about 13%. The market thought that Buffett was negative about Apple\’s future. However, at the shareholders\’ meeting, Buffett explained that selling Apple was just to cope with the tax burden after making profits and Apple\’s fundamentals. As of the end of the first quarter, Apple was still Berkshire Hathaway\’s largest holding.
\”We own American Express, which is a great business, we own Coca-Cola, which is a great business, and we own Apple, which is an even better business,\” Buffett said.
\”These three companies are beverages or payment tools that consumers around the world will give priority to. It is difficult to find comparable investment targets in the world.
Looking for companies with low risk and high profits, the interest rate is 5.4%, and there are not so many opportunities. Some people ask whether Berkshire’s cash position surged to US$188.99 billion in the first quarter of 2024, setting a record, and whether it can’t find suitable investment targets. Buffett\’s answer was: \”By the end of the second quarter, Berkshire\’s cash holdings may further increase to the $200 billion mark. We are happy to spend it, but no one on the stage has a good idea of ​​how to use it.\” The money has to be doing something that has very little risk and can make us a lot of money.
We won\’t use this money when interest rates are now 5.4%. Now that interest rates are so high, we only swing at the right time. We can\’t find so many opportunities now. There are not enough attractive targets for me to allocate so many assets to see if there are any in the future. change.
\”When looking at a stock, you should treat it as a company. If you miss something you don\’t understand, don\’t regret it and say: \”When we allocate funds, we will treat the target as a company. We will not predict the market and will not just pick stocks.
A wise investor told me to look at a stock as a company and not as a stock.
These words are so inspiring that the most basic principle we follow when allocating assets is Benjamin. Graham\’s philosophy is that just picking stocks is a waste of time.
\”Buffett said that he and Monger missed a lot of investment opportunities, but they didn\’t regret it at all. At least they wouldn\’t regret missing something they didn\’t understand. The real regret was missing some companies that later turned out to be very big businesses.
Just when the market thought that this year\’s Berkshire Hathaway shareholder meeting would have no bright spots, some investors asked Buffett if he could reveal what the mysterious holdings were that the SEC had asked the SEC to keep secret for two consecutive quarters starting from the third quarter of last year. According to the financial report, Berkshire Hathaway last year The cost of holding positions in \”banks, insurance companies and financial stocks\” increased by US$3.59 billion in the first half of the year and was the only category that increased. Therefore, the market speculates that this mysterious holding is a bank stock such as Charles Schwab (SCHW). The stock price was deeply affected by the U.S. banking industry at the beginning of last year. The drag of the crisis.
Financial stocks continue to fluctuate and hit new highs, which echoes Buffett\’s overweighting of bank stocks. Coincidentally, recently, Taiwan\’s financial stocks continue to fluctuate and hit new highs, which exactly echoes the logic of Buffett\’s overweighting of bank stocks. The logic of the market is that the Federal Reserve has given a three-point interest rate cut outlook and cut interest rates. Life insurance stocks are beneficial because life insurance companies\’ investment portfolios often include fixed income products such as bonds.
When interest rates fall, the value of these fixed-income products rises, helping to boost life insurance companies\’ profits.
In addition, lower borrowing costs for banks after interest rate cuts help improve profits.
The cash dividends of financial holding companies with life insurance as the main body, such as Cathay Gold, Fubon Gold, and Shin Kong Gold, in 2023 are 2 yuan, 2.5 yuan, and 0 yuan respectively. Calculated based on the closing price on May 6, the cash dividend yields are 3.92%. , 3.57%, 0%, etc.
The 2023 cash dividend yields of financial holding companies with banks as the main body are Huanan Gold 4.71%, First Gold 3.04%, Mega Gold 3.64%, Heku Gold 2.43%, Yongfeng Gold 3.29%, Yushan Gold 4.27%, Taishin Gold 3.19%, CITIC Gold 4.98%, etc.
Even the financing and borrowing costs of securities companies have also been reduced and profits have increased. Recently, it was discovered that local legal persons actually bought Qunyi Certificates and the stock price continued to rise. After all, the interest on financing is a stable income for securities companies.
The 2023 cash dividend yields of securities-related stocks are as follows: Qunyi Securities 4.93%, Unified Securities 4.6%, Hongyuan Securities 1.85%, Kanghe Securities 3.98%, Fubang Securities 7.8%, Dazhan Securities 4.7%, Mei Mei Securities 3.09%, etc. .
Someone asked Buffett to share what each of us needs to hear most. Buffett borrowed Monger\’s advice. First, do a good job in education. Deal with the right people for your own personal situation. I hope to find someone who can help me find the right direction in life.
Finding your own interests, finding the job you want, finding someone you can share your life with sometimes takes a long time, but don’t forget your original intention.
Source: \”Finance Weekly\” Issue 1237. For more exciting content, please go to \”Finance Weekly\”

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