For assets with better cash flow, Buffett has always preferred it.
If it were not for the rapid development of the Internet in recent years and the huge transformation of the global business structure, I believe that at least 60% of Buffett's top ten positions are traditional financial and energy stocks. Until the inflection point of 2016, Apple let Buffett see the opportunity to participate in the Internet, so he did not hesitate to buy Apple, and continued to increase the position, until today Apple has become Berkshire's largest heavy stock, accounting for nearly half.
It turns out that Apple has also saved Berkshire and Buffett from fire and water several times, and it can be said that Apple is Buffett's most correct investment since 2016.
Buffett once said that investing is rational, and if you don't understand it, don't do it.
From buffett's failure to try aviation stocks in early 2020 to increasing his position in Western oil this year, Buffett's investment cycle seems to have returned.
Since the decline in U.S. technology stocks in November last year, the assets of most of the world's richest people have shrunk to varying degrees, and among the top ten richest people in the world, buffett is the only exception. According to statistics, Buffett's assets increased by more than $23 billion during the year, and his value was $129.7 billion, ranking fifth in the world after Bill Gates.
It is reported that this is also the first time that Buffett has squeezed into the top five in the world.
So what does Buffett's ranking illustrate? Can he go one step further and become the world's richest man?
First, buffett's style has not actually changed significantly in the past, and Apple's investment is Buffett's best investment in nearly a decade.
Thanks to the generous returns of this investment, Buffett not only retained his reputation in his later years, but even made Berkshire's investment more comfortable. For the world's top investors who have crossed several rounds of bulls and bears, Buffett's logic has been criticized for four or five years in the context of the sharp rise in technology stocks, and in these four or five years, Buffett will be "ridiculed" by Wall Street almost every year, questioning its cheapness and old-fashionedness.
In the face of outside questions, Buffett has not responded positively, especially when the judgment of aviation stocks is wrong, and the loss of more than 50% of the position is difficult for many investors to understand. Not only that, but Berkshire's growing cash reserves have also allowed some Wall Street investors to liquidate the company's stock.
Second, with the Fed's interest rate hikes, technology stocks began to enter the squeeze bubble stage. According to statistics, nearly two-thirds of nasdaq's 3,000 constituent stocks fell by more than 25% in less than 52 weeks, and nearly 43% of the company's stock prices fell short; since last November, U.S. technology stocks have evaporated 5 trillion yuan from the highest market value.
Among Buffett's positions, Apple has only fallen by less than 2% this year, while its positions of American Express and Coca-Cola have risen sharply against the trend.
Third, Buffett began to shift from a defensive strategy to an offensive strategy. Recently, Berkshire announced that it would buy insurer Alleghany for $11.6 billion in cash, the company's largest investment since 2016.
In addition, starting from the third quarter of 2020, Buffett began to build a position in energy giant Chevron, and violently increased his position in the fourth quarter of last year, buying Chevron into Berkshire's ninth largest heavy stock. Not only that, Buffett's firm purchase of Western oil all the way is also a stroke of genius.
Buffett also said in an interview that the move to invest in Western oil companies is a bet on the long-term rise in oil prices.
It can be seen that Buffett's judgment of the global economy is still relatively accurate, it does not waste a little opportunity, and is also good at waiting patiently, and in the future, as the global economy enters a turbulent cycle, Buffett's ranking will continue to rise. At present, there is still a gap of $140 billion between Buffett and first-place Musk, so it is more difficult to close this gap, so I don't think Buffett can challenge the position of the world's richest man, but it is certain that as the technology stocks squeeze the bubble for a longer and longer time, then the investment targets of the US stock market will become more and more, and Buffett will likely open the investment cycle of Berkshire.