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Having too much money is a real problem. Warren Buffett sits on $400B with almost nowhere to put it but Treasuries. The bigger the pile, the harder it is to earn a real return on all of it. The small investor edge nobody talks about. Where would you park $400B?

33,132 görüntüleme • 2 ay önce •via X (Twitter)

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Warren Buffett: "It is a different game that requires a different type of person to enjoy it." At 94 years old, Warren Buffett has a clear preference when it comes to investing, and it's not real estate. When asked about real estate versus stocks, Buffett argues the stock market wins on almost every practical dimension. "There is simply much more opportunity in the United States security market than in real estate." His reasoning comes down to three things: speed, simplicity, and certainty of completion. In stocks, you can execute billions of dollars worth of business anonymously in five minutes, and once the trade is done, it's done. The completion rate is essentially 100% once buyer and seller agree on price. Real estate is the opposite. You're dealing with a single owner or family that may have held a property for a long time, possibly borrowed too much against it, or is facing negative trends. Every transaction becomes an enormous, drawn-out decision. "In real estate, signing the deal is just the start of another phase where people negotiate more and more things." Buffett contrasts this with the stock market: "If someone needs to sell 20,000 shares of Berkshire and the price is right, it is done in five seconds and closes every time." His late partner Charlie Munger took a different view. Munger enjoyed real estate deals and continued doing them even in the last five years of his life. But Buffett says that if Munger had to choose exclusively between the two at age 21, even he would have chosen stocks. For Buffett, the conclusion is simple: "We find it much better when people are ready to pick up the phone and you can do hundreds of millions of dollars of business in a day. I have been spoiled by this efficiency, and I like being spoiled, so we will keep it that way." Real estate can produce great returns, but the friction involved in negotiations, multiple parties, and drawn-out timelines makes it a fundamentally different game. For most investors, the stock market offers far more opportunity with far less complexity.

Big Brain Investing

42,809 görüntüleme • 3 ay önce