Notice how the rich, like Buffett think about cash. It's very different than the way "regular folks" think about cash. Regular folks despise money only sitting in cash thinking that it's wasting its time there. Look at how Buffett views it: Berkshire held $112 billion at yearend in U.S. Treasury bills and other cash equivalents, and another $20 billion in miscellaneous fixed-income instruments. We consider a portion of that stash to be untouchable, having pledged to always hold at least $20 billion in cash equivalents to guard against external calamities. We have also promised to avoid any activities that could threaten our maintaining that buffer. Berkshire will forever remain a financial fortress. In managing, I will make expensive mistakes of commission and will also miss many opportunities, some of which should have been obvious to me. At times, our stock will tumble as investors flee from equities. But I will never risk getting caught short of cash.
The way they think differently from the masses is what got them where they are. Want to start getting a closer result to what they're getting? Take on their thinking...exchange your own thinking for theirs.
Sean, could you share what are some fixed income instruments? Thanks
I have a lot of money in cash right now. Cash is always a good thing, but you also need it to work for you also. I have a very liquid, low risk investment giving me 2.39%. I always listen to what Buffett says when it comes to investing.
what about Buffett saying our pick that just tanked was a mistake?