Price Check
And let’s not forget the whopping $128 billion of cash Buffett is hoarding at Berkshire. It’s not that he enjoys having all that cash around; Buffett’s reason for being is to buy companies. “I’ve actually been a personal net buyer of stocks ever since I was 11,” Buffett recalled. “We’re about 80% roughly in equities and about 20% in cash, and I’d rather have that 20% in other good businesses.”
So how will it all shake out? “People are reaching for yield, there’s no question about that, and that’s stupid, and it has consequences over time,” Buffett explained, adding that, “It can take a lot longer than you think, but eventually you get to midnight and everything turns to pumpkins and mice.” In other words, when the money dries up or interest rates return to more normal levels — for Buffett, a question of when, not if — equity prices will tumble and he will have his opening.
Like all great players, there are few flaws in Buffett’s game. But perhaps more than anything else, Buffett will be remembered as the master of the fat pitch, and he’s fixing for one more before he hangs up his stock charts.
Nir Kaissar is a Bloomberg Opinion columnist covering the markets. He is the founder of Unison Advisors, an asset management firm. He has worked as a lawyer at Sullivan & Cromwell and a consultant at Ernst & Young.