Berkshire Hathaway: A Solid Anchor in Volatile Markets

In addition to using Dimensional Funds in most clients investment portfolio I like to bring investments into a portfolio that do good work in the good years and even better work in the bad years. Investment legend Warren Buffett stated "it's only when the tide goes out that you can see who is swimming with togs" He's right and one of the investments I like to use in client portfolios is....Warren Buffett's company, Berkshire Hathaway.

Why? Well why not hitch a ride onto the best investment manager ever? You can see the chart of their share price and wish you were reading this is in 1990 when the share price was $7,000. It's now $340,000. When I was working in London in 2001 I used to sit nearby to the VP of Finance and I struck up a friendship with him. He was raving about Berkshire Hathway then when the share price was around $60,000. He had all his savings invested with Berkshire Hathaway. I guess he has an even bigger smile on his face now than he did back then.

The key thing I like about Berkshire Hathaway is the sheer amount of cash they hold. Approx $130 billion which is a lot. It's held for one reason only, to invest very aggressivly when there is fear and panic in the markets. They've done it before and they'll do it again.

So this is a part of many of our clients portfolios because we are looking for funds and companies that are not flashy but likely to do well over the long term, and most importantly it's good to own investments that do good work in bad times.