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Warren Buffett and Berkshire Hathaway chased the wrong dragon?

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From hero to zero. Investment guru Warren Buffett recently saw his wealth eroded by billions of dollars after Apple share price plunged in value.

Widely regarded as the Godfather of Investments, Warren Buffett is revered by numerous global investors for his god-like investment acumen. Being a value investor, Warren Buffett showed the way how to make money from stock market through value investing. In short, he is not afraid of going against the herd when it comes to investing.

However, Warren Buffett’s shock purchase of Apple shares, through Berkshire Hathaway, is considered bizarre because it ran against his contrarian principle. Where is the safety margin and mitigations for downside risks that our guru always preach?

Warren Buffett

Over the years, Warren Buffett had made a number of poor investment judgements that proved costly to Berkshire Hathaway investors. Among the worst mistakes should be funding the acquisition of General Re through issuance of Berkshire Hathaway shares. That was a whopping USD 70 billion misjudgement.

In this regard, it should be noted that Warren Buffett do make major mistakes. Thus, investors should not blindly follow what he invests in. Always remember that as a retail investor, you are not in the same league as the big whales.

Then should investors of Berkshire Hathaway run for their lives or is this a good time to enter this counter? In this article, the investment merits of investing in Berkshire Hathaway stock are discussed, taking into consideration its business portfolios and prospects.

Is Warren Buffett over the hill?

It is well-known that Warren Buffett is a conservative investor who seldom invests in tech stocks. His investment tenet is to invest in something that he can understand well. So it was stunning that Buffett announced Berkshire Hathaway would purchase Apple shares in early 2017. By end of 2017, Berkshire Hathaway had accumulated 165.3 million of Apple shares and by the end of 2018, Berkshire Hathaway was the third largest shareholder of Apple, with 252,478,779 shares.

What was mystifying was not Buffett’s decision to invest in Apple shares, but rather how he had [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]

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Updated: January 11, 2019 — 1:50 pm

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