Whose Sitting In Cash Right Now?
Warren Buffett...that's who!... Mr. Buffett released his Annual Report several weeks ago, and it shows that he is sitting on $45 billion dollars in cash, which is up by $2 billion from last year.
With about $135 billion available for investing, Mr. Buffett has determined that the best use for one-third of that money is to simply leave it sitting in the bank earning interest.
Why hasn't he invested the money? Because, in short, according to Buffett himself, there are no good buys out there at this time.
In last year's annual report, Buffett said: "We don't enjoy sitting on $43 billion of cash...Instead, we yearn to buy more [investments]...however, only when purchases can be made at prices that offer us the prospect of a reasonable return on our investment."
So Buffett basically is saying, invest money only when you can make a good return on that money. And when there's no money to be made, then don't invest!
Most people have been conditioned by financial planners, publications like Money magazine, CNBC, or their friends that "you've got to be fully invested at all times", which is pure rubbish because it is BAD advice!... Of course the financial planners want you to be fully invested - so they can keep earning fees from you while you keep your money with them.
But staying fully invested is complete nonsense. Warren Buffett is the world's second richest man. He got there through investing. And he has $45 billion in cash. If cash is good enough for the world's most successful investor, then it should be good enough for you and me.
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With about $135 billion available for investing, Mr. Buffett has determined that the best use for one-third of that money is to simply leave it sitting in the bank earning interest.
Why hasn't he invested the money? Because, in short, according to Buffett himself, there are no good buys out there at this time.
In last year's annual report, Buffett said: "We don't enjoy sitting on $43 billion of cash...Instead, we yearn to buy more [investments]...however, only when purchases can be made at prices that offer us the prospect of a reasonable return on our investment."
So Buffett basically is saying, invest money only when you can make a good return on that money. And when there's no money to be made, then don't invest!
Most people have been conditioned by financial planners, publications like Money magazine, CNBC, or their friends that "you've got to be fully invested at all times", which is pure rubbish because it is BAD advice!... Of course the financial planners want you to be fully invested - so they can keep earning fees from you while you keep your money with them.
But staying fully invested is complete nonsense. Warren Buffett is the world's second richest man. He got there through investing. And he has $45 billion in cash. If cash is good enough for the world's most successful investor, then it should be good enough for you and me.
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posted by Bob Moser at
5:32 PM
1 Comments:
For each $90k A share you get $29k in cash.
MSFT the other cash cow, for $27.24 you only get $3.35 in cash.
Maybe the mega banks will make a corporate raider subsiderary and go after these companies to get the cash. :)
On a side note value averaging works very nice by investing less when prices are at a premium and investing more when prices are on sale.
By
erik, at 1:45 AM
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