Why Warren Buffett is sitting on cash pile of USD 109 Bln? What he knows that we don’t?
10
September 2018
Why
Warren Buffett is sitting on cash pile of USD 109 Bln? What he knows that we
don’t?
Greetings
from Hitesh! Today we will deal with Buffett’s cash pile. He is sitting on USD
109 Bln. Does he know something that we don’t know?
Let
me take you in 1997 Berkshire Annual report.
Buffett
shares an example of TED Williams one of the “Splendid Splinter” of BASE BALL
game. He was one of the greatest hitters in the BASE BALL history. He was
successful because he had done an intense study of his own game. He had broken
down the STRIKE ZONE in 77 base ball sized CELLs and Charting his results at
the plate (pitch in cricket terminology). From the above he learned that
his batting average was much better when he went after only pitches in his
“SWEET SPOT”. Of course, even with that knowledge, he couldn’t wait all day for
the perfect pitch; if he let three strikes go by without swinging, he would be
called out.
Investing
is the greatest business in the world because you never have to swing. You
stand at the PLATE; the pitcher throws you GENERAL MOTOR at USD 47, US Steel at
USD 39! And nobody calls a strike on you. There is no penalty except
opportunity loss. All day you wait for the pitch you like; then when fielders
are asleep, you step up and hit it.
What
BUFFETT is saying in SIMPLE LANGUAGE?
Wait
for the opportunities to fall on you. Don’t run after with your best buy list.
Wait and people will come to you with their SELL list and you choose the best
from them.
This
is nothing but OPPORTUNITISM. He recommends patiently waiting for
Opportunities. Your job is to find out high probability profitable idea from
among all the opportunities you have got. It’s okay to miss some profitable
opportunities but it’s not okay to go for loss making one. It’s also not okay
to go for MEDIOCARE opportunities or copy what others are doing as this will
not add to ALPHA.
Can
we relate this to famous SAYING?
We
have a saying in ENGLISH “DON’T MARRY A PERSON WHOM YOU LOVE, MARRY A PERSON
WHO LOVES YOU”.
This
is full of common sense and Buffett is asking you to do the same thing when it
comes to investments.
However,
I see many guys are going mad, committing suicide, remain unmarried if the girl
he loves, don’t marry him. Common sense is very uncommon and that’s why there
are few BUFFETTS on the planet.
What
NEXT?
Don’t
waste time in preparing BEST BUY LIST. Prepare LIST of CRITERIA which will make
your buy a GOOD BUY for you. As and when
you are approached by SELLER with his SELL, just match with your Buy CRITERIA
and go ahead.
Have
a HAPPY WEEK AHEAD.
Live With Passion…Invest With Passion.
Hitesh Parikh.
Great idea
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