Berkshire Hathaway utilized as cash proxy
The speakers treat Berkshire Hathaway as an attractively valued cash proxy to fund higher-conviction ideas.
The argument
The guest explained that while Berkshire Hathaway is attractively valued, they primarily use it as a source of liquidity to deploy into new, higher-conviction positions when cash is otherwise unavailable.
The thesis, stress-tested
✓ What validates it
- ✓Outperformance of newly added positions (MercadoLibre, Netflix) relative to Berkshire Hathaway
▸ Risks discussed
- ▸Opportunity cost of selling Berkshire if the newly purchased assets underperform
Hear it yourself
"I also think that Berkshire is actually attractively valued, but it is a position that we mostly use as a cash proxy to some extent. So when a better opportunity comes up and we lack cash to invest, we do sell some Berkshire and basically deploy that capital in the new position."
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