In early 2017 Forbes ranked Warren Buffett as the world’s second richest man with a net worth of $72 billion.
Unlike most other billionaires on the list, Buffett didn’t get rich from owning just one company. Berkshire Hathaway Inc. (NYSE:BRK.B) functioned like a giant mutual fund, investing in many companies from different industries all across the economy. That way, if one industry or company struggled, it wouldn’t crush Berkshire’s performance.
At the core, this is a lesson in diversification. Putting all your eggs in one basket can be risky.
That is particularly true in the cannabis sector. It is a super young industry and cannabis stocks can be quite volatile.
Hello MarketClub members everywhere. After years of avoiding tech stocks and missing the tech boom, legendary investor Warren Buffett purchased through Berkshire Hathaway 9.8 million shares of Apple on May 16th, worth roughly $1.07 billion, according to a filing for the first quarter with the Securities and Exchange Commission.
What's interesting here is hedge fund giant, David Tepper, exited his 1.2 million stake in Apple and in April, Carl Icahn said he no longer holds any shares in Apple.
So who is right? David Tepper and Carl Icahn for selling their shares of Apple Inc. (NASDAQ:AAPL) Or Warren Buffett for buying the stock? Well, it all begins with your time perspective. In the case of David Tepper and Carl Icahn, they tend to be traders as opposed to Mr. Buffett, who tends to be a long-term investor. Now I can say this about Mr. Buffett; he is not a tech guy and he missed out on the big move in all of the tech stocks. So if you are a long-term investor, it may not be a bad move to buy Apple. If you're more of a trader, then you probably want to be out of the stock of the moment.
We have all heard the saying, buy low, sell high, which is an easier to understand saying than Warren Buffett's famous quote, "Be fearful when others are greedy and greedy when others are fearful."
With the major US indexes all down more than 8% to start 2016, it would appear this is the time to follow the above-mentioned advice. Stock prices in general, based on the major indexes are 8% cheaper than they were just half a month ago, hence, buying today is buying low. Buffett's advice follows that idea and tells us to be greedy when others are fearful. The market is moving lower, indicating that the majority of investors are fearful of where stock prices will be in the future. If we follow Buffett's advice, this is a good time to be greedy.
Just a few weeks ago it would have appeared the world was on the brink of another major financial crash; tensions in Europe and concerns about Greece leaving the Euro were increasing, China's stock market was crashing, and it appeared Puerto Rico would not be able to pay its debts, just to name the big concerns bringing fear to the world financial markets.
Well, fast forward to today and for the most part those concerns have all but dissipated; it would seem Greece and the rest of Europe have come to some sort of agreement at least for the time being, China's government stepped in and put policies in place to attempt to stop its market from crashing, and Puerto Rico has paid most of its debt's and even though it defaulted on one, the market hasn't seemed to care. The major indexes are again nearing all-time highs. The S&P 500 is above 2,120 and the Dow Jones is at about 18,100.
Again this was another great example of why when the world seems to be falling apart and others are panicking, the best reaction is to stay calm and continue trudging on. Anytime we go through this sort of situation, I always go back to my favorite Warren Buffett "Be fearful when others are greedy and greedy when others are fearful." Continue reading "How To React When The World Is Coming To An End"→
The Federal Reserve recently announced that it would end its third (and possibly final) round of quantitative easing (QE).
This brings to close the $1.7 trillion that was pumped into the economy in this round alone. October marked the last month of the $15 billion in monthly bond purchases -- down from $85 billion when QE3 started in 2012 -- and ends the nearly six-year bond purchasing program.
You can see what the program has done to the balance sheet of the Federal Reserve: