The big news coming out of the weekend is Warren Buffett officially stepping down from running Berkshire Hathaway (BRK.A).
It’s well over a trillion dollars in market cap at this point, and Uncle Warren is now in his mid-90s.
Charlie Munger recently passed, so I’m sure it hasn’t been the same without him behind closed doors.
You could almost hear it in his voice on Saturday.
It’s time.
What Charlie Said
Now, here’s what’s fascinating.
Since Warren Buffett acquired control of Berkshire in 1965, BRK.A is up 5,502,284%. The S&P 500 is up 39,054% during this period.
That means Berkshire could drop 99% from here tomorrow and Warren Buffett would still be outpacing the S&P 500.
That’s insane.
That’s what legends are made of.
Congratulations, Warren Buffett, you’re an inspiration to us all.
But it’s something Warren Buffett’s No. 1 partner once said that really resonates with me.
In fact Charlie Munger helped inspire everything we do around here. It’s the basic idea underneath that insane outperformance.
“If people weren’t wrong so often,” Charlie turned and said to Warren, “we wouldn’t be so rich.”
Every day around here, we’re looking for extremes in mispositioning.
And we’re inspired by the exact words Charlie Munger used to describe their success to his partner Warren Buffett.
What Would Warren Do?
Barron’s is out with its latest Big Money poll.
It’s the most bearish that it’s ever been in the history of the survey.
I mean, look at Saturday morning’s Barron’s cover:
This is what we’re doing here…
We’re specifically looking for opportunities where the market is doing one thing, while the humans are doing something else.
It’s a bull market, but humans have never been more scared than they are right now.
As usual at extremes in positioning, we’ve been taking the other side and buying all their fear.
And it’s been working.
Barron’s asks professional investors a series of questions every six months. They call it the “Big Money” poll.
According to Barron’s, “Investing pros haven’t been this worried about the stock market in at least 28 years.”
That’s the type of headline and cover story we like to see when we’re long stocks and planning to buy more this week.
People are wrong… and we’re aiming to profit from their mistakes.
That’s my bet.
Stay sharp,
JC Parets, CMT
Founder, TrendLabs