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HCL tech is at a fresh 52 week low today and getting hit hard post earnings. A few weeks ago I spoke to Kenneth Andrade of Old Bridge Capital on why he exited IT stocks completely earlier this year. "We dont know whats happening in the tech sector. will...

265,645 görüntüleme • 3 ay önce •via X (Twitter)

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Warren Buffett on why he buys "terrible" businesses: A shareholder asked Buffett about Berkshire's exposure to the housing market through businesses like Shaw, Acme Brick, Johns Manville, and HomeServices, and what he sees coming over the next decade. Buffett didn't sugarcoat the present: "Well, the immediate situation is it's terrible. It's been flatlined now for a long time and it affects Shaw. It affects Acme Brick. It affects Johns Manville. Affects our home services operation and there has been no bounce at all." But then he revealed why that doesn't bother him. Berkshire had just bought the largest brick operation in Alabama, a state Buffett notes "uses more brick per capita than any state in the union," right in the middle of a market with virtually no buyers. "We wrote a check for cash and we like improving our position." His reasoning comes down to a simple long-term view: "This country over time will build houses at a rate that overall in total commensurate with household growth. And I think we're going to see plenty of household growth in future decades. And I think that our companies are well positioned to make significant money when we get to a normalized level of home building." Buffett admitted he had no idea when the turn would come. He thought it might happen by year end, but added: "I don't think anybody knows the answer on that." That uncertainty wasn't the point. The point was the price he paid for what the business would earn over decades. Charlie Munger cut to the heart of it: "Well, one advantage of buying these very cyclical businesses is a lot of people don't like them. And what difference does it make to us if the earnings average say 300 million a year, if it comes in in a very lumpy fashion? In the big scheme of things, what do we care if it's lumpy? As long as it's a good business and we have an advantage on that stuff. Nobody else was bidding for a brick plant in Alabama with no customers." Buffett then offered a comparison that reframes how to think about lumpy earnings entirely. See's Candy, he pointed out, loses money roughly eight months of the year: "Now it just so happens we know the seasonal pattern. So we don't worry in July that somehow Christmas won't come. We've got a couple thousand years on our side." His conclusion on cyclical businesses: "If you take the next 20 years, there will be three or four terrible years for residential housing and there'll be a lot of them that are pretty good and there'll be a few that are terrific. And I don't know the order in which they're going to appear, but I know if I can buy the assets cheap enough to participate in those 20 years that we'll do okay over that time."

Black Edge

15,393 görüntüleme • 2 ay önce

Warren Buffett on why he buys "terrible" businesses: A shareholder asked Buffett about Berkshire's exposure to the housing market through businesses like Shaw, Acme Brick, Johns Manville, and HomeServices, and what he sees coming over the next decade. Buffett didn't sugarcoat the present: "Well, the immediate situation is it's terrible. It's been flatlined now for a long time and it affects Shaw. It affects Acme Brick. It affects Johns Manville. Affects our home services operation and there has been no bounce at all." But then he revealed why that doesn't bother him. Berkshire had just bought the largest brick operation in Alabama, a state Buffett notes "uses more brick per capita than any state in the union," right in the middle of a market with virtually no buyers. "We wrote a check for cash and we like improving our position." His reasoning comes down to a simple long-term view: "This country over time will build houses at a rate that overall in total commensurate with household growth. And I think we're going to see plenty of household growth in future decades. And I think that our companies are well positioned to make significant money when we get to a normalized level of home building." Buffett admitted he had no idea when the turn would come. He thought it might happen by year end, but added: "I don't think anybody knows the answer on that." That uncertainty wasn't the point. The point was the price he paid for what the business would earn over decades. Charlie Munger cut to the heart of it: "Well, one advantage of buying these very cyclical businesses is a lot of people don't like them. And what difference does it make to us if the earnings average say 300 million a year, if it comes in in a very lumpy fashion? In the big scheme of things, what do we care if it's lumpy? As long as it's a good business and we have an advantage on that stuff. Nobody else was bidding for a brick plant in Alabama with no customers." Buffett then offered a comparison that reframes how to think about lumpy earnings entirely. See's Candy, he pointed out, loses money roughly eight months of the year: "Now it just so happens we know the seasonal pattern. So we don't worry in July that somehow Christmas won't come. We've got a couple thousand years on our side." His conclusion on cyclical businesses: "If you take the next 20 years, there will be three or four terrible years for residential housing and there'll be a lot of them that are pretty good and there'll be a few that are terrific. And I don't know the order in which they're going to appear, but I know if I can buy the assets cheap enough to participate in those 20 years that we'll do okay over that time."

Black Edge

10,628 görüntüleme • 1 ay önce