Summary
- Millions of new Robinhood traders and retail bros, but many will go on to be investors with more long-term-oriented broader portfolios.
- Berkshire Hathaway as a high-quality product at a nice discount presently is ideal as part of a new millennial investor’s broader, long-term portfolio.
- There is a misnomer of Warren being of traditional value investing style, but Mr. Buffett is the pioneering MMA fighter of the investment world, utilising his growth and value mastery.
- Underperformance of Berkshire is another misnomer as its better benchmark is an equal weighted S&P 500.
- Think of Berkshire as a sports bet with the overwhelming odds in your favour.
Warren Buffett and Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) have been getting significant flak of late for not deploying Berkshire's huge cash pile significantly during March's market slide and its immediate aftermath, and for selling out of airline stocks. Meanwhile, millions of new, mostly millennial users have signed up for Robinhood accounts (average user age 31) this year, with a good number of users trading stocks for their first time amidst the market roaring back from the March depths. Many of these new Robinhood traders have engaged in short-term trading, which in May and June helped fuel rallies in some of the most beaten-down areas of the market, as well as many penny stocks and companies under bankruptcy. Additionally, the popular acronym FANG/FAANGM stocks as well as "cult following" tech story stocks now trade at new highs. Proclamations by naysayers in the media have been abound especially frequently claiming the Oracle of Omaha is losing his touch.
And yet, for all the day and night contrast between the investment approach of Warren Buffett and the short-term trading by some of the newbie traders, there is to be an intersection between the two. Enthusiasm and intellectual curiosity amongst many of these new stock traders for stock investing is driving or will drive them to seek out greater investment knowledge, and many will ultimately build more long-term-oriented, broader sector portfolios. Some will find Warren Buffett's investment philosophy. For the recent Robinhood users and similar transitioning from short-term trader to fundamental investor, a summary of Berkshire Hathaway, the investment philosophies of Warren Buffett that has culminated in Berkshire Hathaway today and therein the case for investing in Berkshire Hathaway now as a part of a longer-term portfolio, are in order.
