mercredi 17 janvier 2018

Between Buffett and Akre

It's very hard to invest these days.

Some say: "You can't predict where the market is going. You should always be fully invested".

Some others say: "The market is expensive. Better wait for a better entry point".

Others say: "Bitcoin is down 15% today. That's an occasion".

I often think about Chuck Akre when I'm alone and naked. And I say to myself: "Akre is invested with very expensive but great businesses (like Mastercard, Visa and Moody's). He's probably not the kind of guy that's gonna sell even if the market is expensive. Actually, today, I read a transcript of Akre in 2011 saying that he doesn't sell exceptional businesses because they're too hard to replace.

On the other hand, there's Warren Buffett (which I like too, but not as much as Akre) who's got more than 100 billion dollars of cash waiting to be deployed. If he thought that there were great occasions, he would probably have bought something long ago.

 I'm somewhere in between these two titans. I feel honored to be there. I know there's some occasions out there, but I wouldn't use the term "screaming buy". I don't see that much headwinds but I don't see backwinds either.

What the fuck should I feel?

3 commentaires:

  1. Buffett shares same philosophy as Akre. He strongly dislikes holding cash. His growing cash is a result of:

    1) increased retained earnings in insurance operations and privately held businesses

    2) inability to deploy cash i.e. buy whole, large businesses quickly enough at the right price

    3) the legal requirement to keep some cash on-hand at insurance subsidiaries.


  2. Looks like somebody got man crush on Akre. I like him well as few others like Lou Simpson and Gleen Greenberg. They like business with lots of free cash flow and they keep it simple.

  3. Might consider investing in Asia. Japan, Singapore especially, rich hunting ground for asset plays. A 5-10% position on Russia ETF denominated in USD/CAD would be interesting. The market is 5 times earning, the most hated and feared in the world.

    It is a simple idea to buy into high quality business, timing is somewhat important, as buying at the top before a crash set one back a couple years but for long term compounding the entry price makes negligible difference.

    But fuck, life is short, the first million dollar is a real bitch.