Warren Buffett Predicts Apple Stock Market Crash? Why Buffett Invested In Tech – AAPL Stock

by birtanpublished on August 14, 2020

Grandpa buff is in the news again like always this guy is just so controversial he's basically like the investing world's Kanye West look at him in the club just throwing up the rock really buff is just trying to live his life but everybody's always in his business

Including myself you know obviously with all these Buffett videos and the latest buff business that everybody's worried about is busts portfolio they're worried it's not diversified enough and that's what we're gonna talk about today and

Diversification is a topic that leads into position sizing and portfolio construction which are all super important topics if you're investing in the market and unfortunately you know most people don't think about these

Things but you know it's not a beginner concept takes a while to get it right but that's just one of the topics we go over in our free training we talk about the strategy we use a fallible that includes all those things position

Sizing and diversification everything that we're going to talk about in this video it goes into more depth so definitely check that out if you haven't already there's a link in this video and down below in the description and

Comments it's free and it's dangerous to be in the market if you don't have this information so do it today so the big thing everybody is talking about is that buff owns way too much Apple at least according to that Apple shares now

Comprise 43% of Warren Buffett's portfolio with Berkshire Hathaway owning ninety 1.3 billion worth of Apple it's a lot of Apple and it's funny to think of Buffett in a company like Apple that's high-tech sleek clean fresh smelling I'm

Used to thinking about him in a Dairy Queen you know that's more of a Buffett investment where there's a permanent dry syrup smell in every store you go into and absolutely anywhere you touch is sticky and there's always some kid like

This one right here just over your shoulder waiting to drool ice cream on you but that mouthful is just waiting to come out over Buffett's shoulder that's what I'm used to Buffett being focused on not something like Apple but Buffett

Is a fan of companies with a sustainable competitive advantage and in Apple's case they own 58% of the smartphone market and we all know Apple is such a strong brand and not only do they control their hardware but they control

Their software too and that's a huge moat that they've developed over the years people make fun of people without Apple phones like me that's how strong their branding is so of course I was gonna be attractive to a guy like

Buffett who loves moats Buffett is also a big fan of the CEO Tim Apple since he's taken over Apple shares have risen six hundred and eighty eight percent and another thing that he loves about them is that they periodically borrow money

It's cheap and then repurchase shares which is shareholder like Buffett you know of course he's gonna really enjoy that as Buffett said I don't think of Apple as a stock I think of it as our third business it's probably the best

Business I know in the world so Buffett is an Apple fanboy and he owns a ton of their shares I think Berkshire is the biggest shareholder and Apple but people are losing it because they think that's too

Much of a big bet in one stop there's not enough diversification it's dangerous putting all your eggs in one basket you know it's the old investing saying diversify but the funny thing about that saying is that it's not

Necessarily true so like Buffett said diversification is a protection against ignorance it makes very little sense for those who know what they're doing and that same statement has been echoed by many other

Extremely successful fund managers like Stan Druckenmiller the legend the billionaire the market wizard he's famous for saying you should put all your eggs in one basket and then watch that basket very closely so that's the

Real truth about markets about how they work the thing is markets don't distribute returns evenly the returns are few and far in between or at least the opportunities so for you to actually take advantage of those few

Opportunities you need to make sure that you're betting enough in them so in the case of guys like Buffett and Druckenmiller they're really good at this they bet huge huge amounts that's why Buffett is so okay with putting so

Much money into Apple the truth is the diversification actually kills your returns it's not the way to approach the stock market so I see people with their accounts and they have 15 to 20 stocks and at that point you're basically like

Mimicking an index why aren't you just in an ETF because you're not going to be able to properly benefit off the few individual stocks that take off because your money is so spread thin you know between 20 other stocks and another

Thing is if you're investing in 20 different companies how much do you know about each of those companies at least for the people that look at fund amounts there's only so much time in a day you can't note that many different business

Models well you can over a long period of time and studying hard every day but the most successful investors at the end of the day they invest in just a few companies now the big caveat here is that you do need to know what you're

Doing otherwise yeah it does become very dangerous putting all your money into one thing like if you're putting all your money into Niccolo that's insane you're probably gonna blow out which is another reason when we talk about

Betting big the guys who are the best at it have been doing it for decades they're literally the best in the game because to be that good and that much conviction it's tough you really got to know what you're doing so

In our strategy that I talked about in this training it's a momentum based strategy so what we're doing is finding the highest momentum stocks and the Nasdaq and investing in those but we have a strict limit we're only investing

In the top five stocks it's not the top one because that's too dangerous for our strategy that's too concentrated but it's not the top ten either because that's too watered down it's to diversify five is our sweet spot and

That's how we're up over forty percent this year because that's the right level of concentration for our strategy to really reap the returns of that momentum now that doesn't mean diversification isn't smart it is to a point it just

Depends on how you do it so when we're talking about the stock market in particular if you're gonna buy a bunch of different stocks then you know you're almost index investing but if you talk about diversification with a guy like a

Little commie Dalio then he's talking about diversification across different asset classes because he does the whole risk parity strategy so he's looking at volatility and he wants everything to work in every scenario so his idea is

That the correlation between something like gold and stocks are gonna be very different so his idea is that like the correlation between something like gold and stocks is gonna be small so if he diversify his money across gold and

Stocks if stocks are going down maybe gold will be going up so he'll still be able to get those returns that he wants and he doesn't just stop at stocks and gold you know there's a bunch of other things

There's commodities there's fixed income you could even throw currencies in there but that's real diversification across different asset classes that all work differently so that type of diversification makes more sense me

Personally I like system diversification and this is what a lot of hedge funds do as well or you could call it strategy diversification so all our fellow members have access to this strategy which is a momentum strategy the one I

Describe in this training but there's also another strategy that we use that's more based off global macro so instead of measuring just momentum in the market it's measuring different things like the relationship between high-yield bonds

And stocks and then it distills all that down to give a signal so I like to use both of those systems together so I diversify my funds among each system because each system is going to perform a little bit differently depending on

The environment so if my momentum strategy is in cash because the market is looking bad my other global macro strategy might be long bonds because they're taking off and a lot of times they might come to

The same conclusion like either be in stocks or not but other times they come to different conclusions and I want that diversification because they're taking different inputs now both of them and this is important they are solid

Strategies on their own but when you combine them together you do get that diversification so you're not betting everything on one strategy even though it does work over the long term you can still get returns if the market turns

Into the type of market that doesn't work as well for that strategy so that's how I like to do it when it comes to that versification and a lot of funds actually use this same strategy and we actually work with funds that use the

Same strategy that teach in this training and the way they're using it is on one portion of their portfolio because they have a multi-strap or folio so at the end of the day we don't got to worry about Buffett being so heavily

Invested in Apple it's all part of the plan that's how you get good returns in the market you do got a concentrate and again we go over all of this in terms of diversification and position sizing which becomes a really important part of

This to go over it all in this free training link in this video and down below in the description comments definitely take it today to make sure that you are diversifying the right way like Buffett does one more thing I want

To talk about is the last video that we did it was a margaret view where i talked about no maskers and they got very angry too funny but we got a lot of comments like this you're a sheep go drink the kool-aid

Because I said you know I was wearing a mask and people should wear masks and that was really the team is common I could find because most of them were so angry and so violent they were automatically blocked by YouTube now

There are a lot of good arguments made in the comments about why we don't need masks for example the virus particles are this big and mass only block particles this big so it doesn't matter if you're wearing it or not or that the

CDC and the government are all liars they keep flip-flopping and you can't trust anything they say or that not wearing a mask is the best way to protest government control so these are all things that I at least somewhat

Agree with there is some validity in those statements but at the same time obviously there's a ton of arguments for wearing masks as well so here's the way that I think about it if you're watching this channel and you're investing in

Markets then what are you more than an investor you're a risk manager so in that sense what's the downside of wearing a mask it's annoying sure I mean I hate it but there's really no negative effects but

The potential upside though of the protection that it may provide is huge so at that point what is it other than another asymmetrical bat very limited downside which is really just you know annoyance for huge upside or potential

Upside will say and if you're all about markets then you know that's a good bet that you should be taking every time so why wouldn't you wear the mask and what we're dealing with is a scenario with imperfect information because I agree

Like the government CDC they lost all trust when they first came out and said Massa didn't do anything they lied and now they flip-flopped so how you gonna trust them so we can call it imperfect information right because even the

Experts are confused as hell so if that's the case and we don't know what's right and what's wrong once you take the more conservative approach and mitigate your downside risk as much as possible are you that certain about your own

Off-brand research for in some random articles online to say that mass hundred percent do not have an effect no way like she can't be that confident so the way I equate it in my head because you know I think in terms of markets not

Wearing a mask is basically like researching a company and being so convinced by your own research that you invest your entire life savings into that company and you're so confident that you don't put any risk point on it

There's no margin of safety you just say I'm gonna ride this until the end and what's gonna happen when you do things like that you're gonna blow out your account there is no way you should be that confident in any bet that's why

This channel is called fallible we're willing to change our minds as new information comes in because we're playing games of imperfect information you're never gonna have everything you need to make the absolute best decision

That's why it's a bet the most you're gonna have is like sixty percent of the information so that's why when I look at mass I'm like yeah of course I'm gonna wear it because I'm gonna mitigate my downside risk as much as possible

Doesn't mean I trust the idiots in the government I'm gonna do my best to protect myself even if there's only a small chance of the mass work now some of the no maskers on our channel we're completely fine with my jokes they get

It but for those no maskers that were so offended by my jokes and threatening to unsubscribe or do some other things that i could care less about well you could go crawl back into your safe space to cry about how your feelings were hurt

And go ahead continue to cling on to your fascist PC culture because here if fallible we spit the truth to it caution you have entered the no spin zone this is the fallible factor and all you snowflakes can leave now that's how I

Feel about it very strongly but anyway feel free to take this training you know you don't need a mask or anything it's very safe 100% safe maskers and no massacres you're all welcome to join and make sure you subscribe you know if

You're tired of all this spin out there and you want to enter the no spin zone the fallible factor works for you so subscribe and I'll see you in the next video stay fallible out there goodnight

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