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- Manlobbi
Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
No. of Recommendations: 7
It seems to me, and it started before Greg, that a trend has developed of when the market sells off, money is parked in BRK, and when the market rallies, BRK seems to sell off. It did not used to be like this, I’m quite sure of it.
I have no empirical data of this, but can someone explain it to me like I’m five? I find it very annoying.
Joe
No. of Recommendations: 2
of when the market sells off, money is parked in BRK, and when the market rallies, BRK seems to sell off.
I observe this behaviour since nearly 1.5 years, since Berkshire fell from it´s $550 high. Together with an Indian friend who is a Daytrader I even tried to create an MI algorithm to actively use this.
When the market falls, the ones being scared the crash eventually could come as you say "park" money in the safety of Berkshire, and when the market goes up FOMO gets the upper hand and people wants to participate in that which requires to be invested in the exciting stocks instead of boring and static Berkshire.
No. of Recommendations: 10
I believe what has happened is Berkshire has placed all of its eggs in anticipation of a severe market correction. It has hoarded cash and been a net seller of stocks for many years.
A crash will eventually occur. It always does. But as we all know, sitting on the sidelines for years and waiting for a crash is often not the best strategy. The longer you wait, the harder the market needs to crash for an overall benefit.
And then we have the unknown. Will Greg actually be a good stock picker? No one really knows. Will he pull the trigger during a market panic? Even Buffett himself remained way too fearful during the Covid crash and didn’t take advantage of the situation. And other than Apple, the stock picks for the last 10 years or so have been horrendous.
So for the time-being, Berkshire is acting like a cash hoarding fund and will be treated like one. It will go up when there is fear and down when there is optimism.
No. of Recommendations: 2
when the market sells off, money is parked in BRK, and when the market rallies, BRK seems to sell off.
It continues. Nice bump in the BRK price today, while Nvidia, putting our cash pile in perspective, lost 300 billion of market cap.
