I share key insights and top picks and pans from seven great investors of our time.
There is diversity of opinion, but some agreement on crucial investment themes.
These include a long-term decline in the dollar, persistent inflation, poor long-term Treasury returns, speculative excesses, and the need for broad diversification.
I share select investments from my portfolio that align with these.
Paul Morigi/Getty Images Entertainment The Magnificent Seven Investors
Here we explore insights from seven of the world’s greatest investors, taken from a variety of sources. I winnowed the views down to these legends’ high-conviction and high-impact investment themes, and their picks and pans.
Given how many great investors there are, any short list will necessarily be subjective. I chose this group based on their track record over a long period and accessibility to their current thinking. For example, George Soros would make my list, but he rarely comments publicly about his investing views. Here are my Magnificent Seven:
> Warren Buffett, Chairman, Berkshire Hathaway
Charlie Munger, Vice Chairman, Berkshire Hathaway and Vice Chairman, The Daily Journal
Ray Dalio, Co-Chief Investment Officer and Chairman, Bridgewater Associates
Bill Gross, former Chairman of PIMCO
Jeffrey Gundlach, CEO, DoubleLine Capital
Bill Miller, Chairman, Miller Value Partners
Jim Rogers, co-founder of the Quantum Fund and Soros Fund Management
Warren Buffet Owns Blue Chips And Adds To Chevron ( CVX )
Buffett needs no introduction. His Berkshire Hathaway track record speaks for itself, although in the past fifteen years, performance hasn’t been extraordinary. Nonetheless, it’s useful to consider what the Oracle of Omaha is doing these days.
According to the November 13F filing, Berkshire Hathaway’s top five holdings account for more than half of the firm’s $293B equity portfolio.
Recently Buffet added a significant position in Chevron, now worth $3.3B, or about 1% of the portfolio’s equity position. GuruFocus estimates he has gained 27.42% on the investment so far. He also took new positions in Royalty Pharma (now worth $525M) and Floor & Décor ($106M) in the third quarter. Buffett exited positions in Merck, Liberty Global and Organon.On the macro front, Buffett made some interesting remarks about inflation and the dollar at the Berkshire Hathaway shareholder meeting: It’s certain we will have inflation over time and we are following policies to stimulate things which are bound to have inflationary consequences, and to the extent we borrow money from the rest of the world it would be very human on the part of politicians in the future to decide they’d rather pay the rest of the world back in dollars that are worth far less than the dollars they borrowed.” Buffett said the best defense for individuals against a declining dollar is to grow your own personal earning power via your career skills. He said the second best way is to own good companies and cited one of the firm’s largest holdings, Coca Cola, as an example. Buffett added, “The value of the dollar since I was born has declined by 94% to 6 cents. So inflation is a very cruel tax on people who believe in fixed dollars.” Charlie Munger Sees Markets Crazier Than The Dot-Com Boom, But Likes Alibaba And Costco Munger, still going strong at age 97, is the elder statesman compared to his younger running mate Buffett, 91. He serves as Vice Chair of Berkshire Hathaway and Chairman of the Daily Journal. In addition to his views already reflected in the Buffet/Berkshire portfolio, I mined several other sources for his current thinking.At the Daily Journal stockholder meeting, Munger fielded investor questions on a range of topics. It was a fascinating look into the mind of one of the most magnificent investors of the past 70+ years. Munger railed on meme stock and other speculative activity. He compared it to past bubbles, likening it to “racetrack bettors.”When asked which pricing is crazier, bitcoin or Tesla, Munger referenced Samuel Johnson: “I can’t decide the order of precedency between a louse and a flea.” On Friday, Munger said markets are “crazier than the dot-com boom” and “cryptocurrencies should have never been invented.” He said many U.S. companies were trading at 35 times earnings, with valuations the most extreme he’d seen in recent history.Munger sees Treasuries as a bad investment. “We don’t know what these artificial low interest rates are going to do, or how the economy is going to work in the future when they print all this extra money.”Munger likes China and says despite whether their methods are right or wrong, they have […]