"In a classic piece for Fortune magazine in 1977, Buffett outlined his views on inflation: “The arithmetic makes it plain that inflation is a far more devastating tax than anything that has been enacted by our legislatures.
That makes no sense.That's why the political left luvs inflation - because the filthy state can rob you and you can't blame any particular politician.
I havnt changed my work investments much. Just never really got into the stock market.Gotta love him;
"In a classic piece for Fortune magazine in 1977, Buffett outlined his views on inflation: “The arithmetic makes it plain that inflation is a far more devastating tax than anything that has been enacted by our legislatures. The inflation tax has a fantastic ability to simply consume capital. ... If you feel you can dance in and out of securities in a way that defeats the inflation tax, I would like to be your broker — but not your partner.”
In a 1981 letter to shareholders, Buffett highlighted two characteristics that help companies thrive amid high inflation: an ability to increase prices easily and an ability to take on more business without having to spend too much.
In other words, invest in asset-light businesses with pricing power
Rule # 1: "Focus on companies that generate rather than consume cash."
Have you changed your portfolio to reflect the upcoming Fed moves and higher inflation, and if so how?
What does that even mean?Yeah
The man with the most money has the most to lose from inflation no matter what they try to make you believe.
Why do you think the federal reserve had rather kill an economy than let inflation run its course. We haven't even approached the FED's target inflation rate for decades. Now with corporations seeing an opportunity to increase profits with plenty of excuses out there for raising prices the FED has decided they need to cool down this economy.
That's why the political left luvs inflation - because the filthy state can rob you and you can't blame any particular politician.
trudatThat makes no sense.
Have you changed your portfolio to reflect the upcoming Fed moves and higher inflation, and if so how?
That makes no sense.
The average person shouldn't be trying to pick and choose individual stocks anyway, much less try to time the market. They'll just mess it up...or worse, they'll get lucky a couple times and think they're a genius. Stock-picking works for people like Buffett who buy enough to have a say in how the companies are run, but not so much for the average investor (as Buffett himself would agree).
Here's how the average person should invest their money in a high-inflation economy, IMO:
- Don't hold any more money in the bank or low-interest accounts than is absolutely necessary.
- Buy assets that will appreciate in value - especially stocks (i.e. index funds) and real estate.
- Don't pay off low-interest debt any faster than you absolutely must. Let it ride for as long as you can, because inflation will eat away at your debt. Instead buy more stocks and real estate.
- Invest in yourself (e.g. more education and skills). If you're going to school for a useful degree, it's a good time to take out as much low-interest student debt as you can, because you'll get a much better ROI from your skills in a high-inflation economy than the paltry interest rates.
Lots of good advice here. Yes, it’s probably the case that Joe Average would better serve himself if he just put his money in an index fund and forgot about it. However, for someone willing to learn and put in some effort, they have distinct advantages over large institutional investors such as Warren Buffett.
One advantage is they’re more nimble. They can move in and out of positions in a matter of seconds. Buffett can’t. Another advantage is the small guy has a larger universe of companies to choose from. Buffett’s only going to move the needle by buying large stakes in large companies. So it’s not always a case of the deck being stacked against the little guy.
When it comes to investing in individual stocks, I think the key to success is to have a well-thought-out plan and then stick to it. I use a value-based, quantitative method of choosing stocks based on a method pioneered by hedge fund manager and Columbia business professor Joel Greenblatt. I use this method only for picking large, American and Canadian corporations and use low-priced ETFs for everything else, such bonds and international stocks. This arrangement has worked well for me.
One thing I don’t like about many index funds is they’re market cap-weighted such that a few companies comprise a major portion of the index. This defeats one of the major arguments for investing in an index fund in the first place: diversification.
True ... but it's not easy to beat the market over time.
I've had a position in VITAX (Vanguard's market-cap-weighted pure tech index fund) for many years.
I doubt there are many pure tech (or mostly tech) actively managed funds that have outperformed VITAX consistently...
Well, just one day, A … but GS shaved off another 2% today while "the market" (S&P 500) dropped about half that...
Yep, and so did Apple.
Diss the Big Apple at your own peril, A...
https://www.cnbc.com/2022/01/28/app...ter-tim-cook-says-supply-chain-improving.html
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