Avoid Buffett's 6 Most Dangerous Investing Mistakes. Download the FREE PDF here: https://thecompoundersclub.kit.com/9ebce5fd0c Want to learn how to invest like Warren Buffett? Download the exclsuive Warren Buffett investment checklist for free: https://thecompoundersclub.kit.com/2e32a6f7c6 Warren Buffett’s recent actions have many people concerned that Buffett is preparing for a 40% decline in the stock market. Buffett’s cash pile just hit another record high hitting a staggering 325 billion dollars. To put this number in perspective this is enough cash to buy the entire companies of Mcdonalds, Starbucks, BMW, Delta Airlines, and Ford combined. Today Berkshire Hathaway, Warren Buffett’s holding company, is keeping 325 billion dollars of cash on the sidelines for a company whose sole purpose is to be investing that cash into stocks and entire businesses. This has longtime followers of Warren Buffett extremely concerned. Many are interpreting this move as Buffett’s way of preparing for an impending stock market crash. The thought being that Buffett is aware of a significant decline in the stock market on the horizon and that Buffett is stockpiling cash ahead of this crash. This seems to contradict Buffett’s claim of never trying to time the stock market. One of Buffett’s most well known quotes is “I make no attempt to forecast the market—my efforts are devoted to finding undervalued securities” If Warren Buffet claims he doesn’t attempt to predict the stock market, why then do so many people interpret Buffett selling stocks and stockpiling cash as Buffett seeing danger ahead for the stock market? Well, let’s just say, despite claims to the contrary, Buffett has an incredibly impressive track record of predicting stock market declines. Take a look at this chart here. In Orange you have the price of the S&P; 500 index, broadly considered a proxy for the US stock market. On the gray bars you have the cash pile at Berkshire Hathaway. As you can see here, Buffett has quite the impressive track record of piling up cash ahead of every major decline in the stock market. He then uses that cash pile to take advantage of discounted prices to make some of his largest, most successful investments of his career. Take a look at the Dot com bubble of the late 1990s and early 2000s. Buffett grew the Berkshire cash pile to what was at the time record levels ahead of the bubble bursting.

• published: 03 Jan 2025
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