Tuesday, March 22, 2011

FinancialEdge: Why Warren Buffett Might Not Be Buying Stocks

Nearly everyone in the market pays some attention to Berkshire Hathaway's (NYSE:BRK.A) multi-billionaire chief Warren Buffett. However, Mr. Buffett is often quite cryptic about exactly what he is looking to do in terms of investments. Consequently, investors, financial journalists and commentators cannot wait to pore over the snippets of information that do come out in filings to the SEC, interviews and his annual letter to shareholders. (This esteemed investor rarely changes his long-term investing strategy, no matter what the market does. Check out Warren Buffett's Bear Market Maneuvers.)

Given all those information sources, it looks like Mr. Buffett may have hit the "pause" button when it comes to buying stocks. His most recent letter really did not mention stocks to the same degree as in the past, and the most recent filings indicated that he sold eight stocks in the fourth quarter of 2010 while taking no new positions. Why might Mr. Buffett be staying away from stocks right now?

Go Big or Go Home
Warren Buffett has the same problem as many large fund managers - the larger the assets under management get, the harder it is to find meaningful new opportunities. What's more, Mr. Buffett is famous for a KISS-type methodology (Keep It Simple, Stupid) that argues against holding dozens and dozens of positions.

To read the full piece, please go to:
http://financialedge.investopedia.com/financial-edge/0311/Why-Warren-Buffett-Might-Not-Be-Buying-Stocks.aspx

No comments: