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Tuesday, January 25, 2022

Warren Buffett’s Cash Pile Tops Record with $149.2 Billion on Hand

One of my idolized investors of all time, Warren Buffett, has a pretty exciting portfolio position for his holding company Berkshire Hathaway. I'm always following his latest investment move, and to my surprise, I found out that one of his largest positions is cash on hand. According to the company's earnings announcement on Saturday, Berkshire Hathaway's cash hoard topped $149.2 billion in the third quarter, exceeding a previous high established in early 2020. 

The new high came despite Buffett pouring more money into stock repurchases, with $7.6 billion in repurchases in the quarter, the third-highest total since the board modified its buyback strategy in 2018. This is an exciting topic to point out. There must be a reason why Warren Buffett is piling up cash in his portfolio instead of buying new stocks. In this article, I will talk about my opinion on why Warren Buffett is just piling cash in the Berkshire Hathaway portfolio. Moreover, I will talk about how this answers my father's large cash balances in his portfolio.

Why Professional Fund Managers Often Underperform the S&P 500 & the Best Alternative Solution

It's practically hard to anticipate the market's performance in any given year. Furthermore, putting together a portfolio that yields market-beating returns is extremely tough for an individual. In 2020, 60.3 percent of large-cap equity fund managers underperformed the S&P 500 (GSPC), according to new data from S&P Dow Jones Indices. This is the 11th year in a row that professionals have fallen short of the mark.
This is not exactly breaking news to many investors. Moreover, thanks to the likes of Warren Buffett and Jack Bogle promoting the benefits of investing in less expensive, passively managed index funds, S&P estimates that there are $11.2 trillion in S&P 500 index funds. To be fair, many active fund managers are not simply seeking to outperform the S&P 500; they're also trying to provide investors with risk exposures that aren't replicated by the benchmark index.
This is an exciting topic to talk about. I wondered if it's better to let a professional fund manager manage my portfolio or whether it's better to manage my own. When I came back from the United States to Jakarta, Indonesia, My father did give me some capital to start with. I invested some of the money into Mutual Funds managed by professionals. The result is not very exciting; the portfolio that fund managers manage did worse than the stock portfolio I built from scratch. In this article, I will explain whether it is better to invest on your own or pay a fund manager to do the job for you. Moreover, I will explain my experience as a stock investor and why you should just invest in a low-cost index fund such as S&P500 (Ticker: SPY) if you are still a beginner in the investing world.

Monday, January 17, 2022

Why Saving Rate is the Most Important Factor to Building Wealth

I always thought that to become wealthy, you will need to invest. Furthermore, the annual returns from your portfolio determine how much wealth you can build. But I realize something more important than performing great in the investment world. This does not require knowledge about the financial world, but it is more of a character and discipline. Yes, it is indeed true that investment return is essential to building wealth.

Nevertheless, this primary method is the most crucial factor in successful investing. Do you want to know what it is? Your discipline and determination of how much you are willing to save up each month from your income is the most important factor in becoming wealthy. This article will talk about why the saving rate is the most critical factor to building wealth. I will also talk about how the saving rate is why I can become wealthy today.

Friday, January 7, 2022

My Idol, Charlie Munger, boosts Alibaba's stake, purchases another 300K shares

This is exciting news to talk about. One of my idol investors, Charlie Munger, raised its holding by 99.3% to 602,060 sponsored American Depository Shares of Alibaba Group (Ticker: BABA) as of December 2021. He bought an additional 300,000 shares. It seems he is a huge fan of Alibaba. In this article, I will talk about his investment move when many investors are fleeing the scene. Moreover, I'm going to give my opinion on his investment purchase on Alibaba Group. As you readers know, I am heavily invested in Alibaba and planning to keep my position despite my loss.

Monday, January 3, 2022

Why I'm Going to Keep Holding Alibaba Stock

Readers following my blog know that I'm heavily invested in Alibaba stock. Since my purchase date, my Alibaba shares have been going down tremendously. Alibaba has been stuck in a perfect storm of misunderstood Chinese regulatory moves, the threat of delisting by US regulators, a slowing macroeconomic growth, a building property sector crisis, severe pandemic comps, and intense competition.
From my average cost, my Alibaba position has an unrealized loss of 44% (January 2022) which is approximately $315,000 of my capital. However, I'm not discouraged about my investment and keep holding my shares for a long-term play. I'm going to keep purchasing more Alibaba shares with the dividends I will receive from Pfizer Inc. (Ticker: PFE) and my rental income.
Yes, it's true that if I had stuck with my previous portfolio, my stock portfolio would have $1,350,000. That's approximately $350,000 difference. I learned my lesson that sometimes it's better to be diversified. Luckily, I'm not using options that have an expiry date for holding a particular stock. So even if my stock portfolio is doing poorly at the moment, I know I still can make money in the long run. In this article, I will explain why I'm going to keep holding to my Alibaba stock and why I think the fallen price is an excellent opportunity to purchase more shares of Alibaba stock.