> What stocks will Warren Buffet be looking to buy once the fear sets in?
Whatever's a good deal when the prices drop low enough.
> How does one evaluate value the way he does?
It's not difficult, he and Munger consistently refer to a handful of books and themes and repeat them over and over.
They do have advantages that you and I don't, however.
First: they have a captive source of cheap cash in their insurance businesses. They are run strictly for underwriting profit, meaning there is always cheap float on hand to invest.
Second: they don't participate in the open market a lot of the time. A lot of the B-H stable is composed of successful private businesses who sold directly, rather than being purchased via the share market. Buffet & Menger can more or less let the deals-of-a-century come to them.
Third: if there's nothing good to buy, they don't. They accumulate cash and near-cash assets. This means that when the market tanks, they are one of the few groups with cash on hand to snap up bargains. This happened in a big way during 2007 and 2008.
Whatever's a good deal when the prices drop low enough.
> How does one evaluate value the way he does?
It's not difficult, he and Munger consistently refer to a handful of books and themes and repeat them over and over.
They do have advantages that you and I don't, however.
First: they have a captive source of cheap cash in their insurance businesses. They are run strictly for underwriting profit, meaning there is always cheap float on hand to invest.
Second: they don't participate in the open market a lot of the time. A lot of the B-H stable is composed of successful private businesses who sold directly, rather than being purchased via the share market. Buffet & Menger can more or less let the deals-of-a-century come to them.
Third: if there's nothing good to buy, they don't. They accumulate cash and near-cash assets. This means that when the market tanks, they are one of the few groups with cash on hand to snap up bargains. This happened in a big way during 2007 and 2008.