Warren Buffett Starts Buying? | Buffett Pandemic Investment Strategy

by birtanpublished on October 3, 2020

Warren buffett is a familiar name to all of us uh when it comes to financial investing but what can we learn from some of his largest holdings and can we try and profit in the short and medium term this is the share price chart of um berkshire hathaway um warren buffett's investment company in this video i'm going to talk a bit uh about his approach to markets then we'll look at berkshire hathaway in a bit more detail and also two there's two biggest holdings to see whether there are opportunities for us

As investors and traders actually we do have a position at the moment i go to the portfolio so apple makes up the biggest part of uh warren buffett's publicly traded portfolio we bought into apple at 361 back in june so we're going to take a look at this in a lot more detail clearly the apple shares have pushed out to fresh all-time highs since then so i'll talk a bit about the investment approach and then we'll look at three different shares in a lot more detail and see if we can

Get a trade on hello i'm david jones from capital.com and i thought we'd do something different again for this video uh take a look at what warren buffett the legendary investor has been up to and uh whether we can profit from following his lead so as usual in this video talk a bit about um three different companies we're going to look at three different stocks we'll jump back onto the platform uh have a look at things from a technical point of view which is not

Very warren buffett and see if we can get a trade on as usual if you're watching this uh if you could click on subscribe it does help support the channel and it means we can continue pushing out hopefully lots of interesting videos like this in the weeks ahead right let's get into it so just in case uh you don't know who warren buffett is he actually turns um 90 this month but he is considered one of the most successful investors ever often referred

To as the sage of omaha omaha in the u.s is where he grew up and of course is where he is still based today he's at the time recording the fourth richest person uh in the world chairman and largest shareholder of his investment vehicle the publicly quoted company uh berkshire or berkshire hathaway berkshire or berkshire depending on which side of the atlantic uh you're on of course he's famous for having a very long outlook when it comes to

Stock investments and it's definitely served him well outperforming the s p over the decades one of his quotes is our favorite holding period uh is forever so that does put it in perspective slightly different to the approach uh that we take normally on this channel his long-term approach is best encapsulated in the quote and there are many uh great warren buffett quotes if you want to want to google them but he says they could close

By on the assumption they could close the market tomorrow and not reopen for five years so let's talk about berkshire hathaway uh the quoted way of buying in uh basically to warren buffett's investment approach so famously mr buffett uh dumped airline stocks um sort of right in the eye of the storm of the pandemic just as it had started to spread i think back in march or april at the end of june the company had a record amount of uh cash ready for investment something

Like 146 billion dollars at berkshire hathaway's disposal in the second quarter of uh this year the company spent a record five billion dollars in buying back its own stock so again representing uh clearly uh some faith and commitment to the future growth of the company apple is the company's largest stock holding so this one stock accounts for something like 40 of the portfolio of of berkshire hathaway the company recently added about 2

Billion of bank of america shares taking it's holding up to about 24 billion so bank of america is now the second largest holding for the company and it's apple and bank in america we're going to look at in more detail there are two listed types of shares there's uh berkshire a shares which are more than three hundred thousand dollars a share and there's these slightly more accessible uh b shares we quote the b shares we'll have a quick look at berkshire and have a look at the b

Shares on our platform so here's the really long term view of um berkshire hathaway shares uh going back the the a shares these are so going back to the beginning of the century they were around fifty thousand dollars a share uh at the moment of course they're up up well you can see on the chart 322 so a six-fold return since then i'm gonna jump back onto our platform and uh take a look at the uh the slightly cheaper

B shares so here are the uh the berkshire berkshire hathaway uh b shares uh they they set all-time highs back in jan up around 231 a share you can see of course we have a recovery going on off the march lows arguably lagging behind indices such as the s p and the nasdaq which is of course out to fresh all-time highs but a definite recovery going on there with um you know lots of support coming in in the 170 to 180 area but at 215

Dollars a share um a more accessible way perhaps for many of us to gain exposure to the the brilliance of warren buffett but what i'm going to do now is talk about um two of his major holdings then we'll look at those in more detail and see where the opportunity could be so let's talk about apple uh in more detail apple's always of course a really popular stock uh mr buffett says i don't think of apple as a stock i think of it as our

Third business and of course it's the largest holding in its publicly traded stock portfolio the latest quarterly earnings uh for apple definitely be expectations it showed the best ever revenue on a quarter and considering you know that we were in the uh pandemic and lockdown apple was seen by many analysts as really blowing out of the water for that quarter earnings per share came in at 2.58 and the market was expecting just just above two dollars about two dollars

And four cents and of course with earnings it's all about how it performs versus expectations so a fantastic result for apple on those latest earnings all this means that at the time of recording these shares are at an all-time high they're up 50 percent uh for the year today another incredible performance given what we have seen of course in markets this year there is a share split coming for apple a four for one split um it does this companies do this uh to

Try and um make their shares more accessible so if apple shares are trading at four hundred dollars for example after the four for one split the shares will be trading at a hundred dollars and shareholders will have more shares than they had at the 400 price it doesn't change the value of the company just makes the shares arguably uh more accessible that's the reason apple have said they're doing this but at the moment they're about 450 dollars a share so you just need to bear

That in mind when we look at the support and resistance levels if the split has happened divide the numbers by four so the most immediate hurdle is the latest all-time high the time recording up at 4 58 after that i think we're just looking at psychological levels up to sort of five hundred dollars a show on the downside lots of levels left on the way up the most immediate one i think is the old heist uh around about four hundred dollars a show let's jump on the chart look at things in more detail

And see if there's an opportunity so here's the really long-term view of um berkshire hathaway shares uh going back the the a shares these are so going back to the beginning of the century they were around fifty thousand dollars a share uh at the moment of course they're up up well you can see on the chart 322 so a six-fold return since then i'm gonna jump back onto our platform and uh take a look at the uh the slightly cheaper b shares so here are the uh the

Berkshire berkshire hathaway b shares they they set all-time highs back in jan up around 231 a share you can see of course we have a recovery going on off the march lows arguably lagging behind indices such as the s p and the nasdaq which is of course out to fresh all-time highs but a definite recovery going on there with um you know lots of support coming in in the 170 to 180 area but at 215 dollars a share um a more accessible way perhaps for

Many of us to gain exposure to the the brilliance of warren buffett but what i'm gonna do now is talk about um two of his major holdings then we'll look at those in more detail and see where the opportunity could be so let's take a look at apple uh in more detail i've got the chart going back here to 2015. the white line on the chart at the top that's where we made our latest purchase i think it was the the 24th of june let's just zoom in because i think what's relevant here is what's been going on this year so the

Position in the portfolio we ended up buying in um about here so the third week of june um after the market had broken out through those old highs let's just take this off for now and also let's just focus on the price we'll come back to the rsi in a second so the old all-time high uh was coming in around 3 30 a share um earlier in the year and of course shares sold off so i love towards 220 and we've had this fantastic run higher

Since then let's just pick up on this latest trend off those march lows so with a trend like this for my money i've just got to be a buyer on dips we have the existing position i mean we had the breakout on their earnings so you can see here end of july the share price moves through 400 a share has moved ahead more than 10 uh since then lots of support coming in i think at around about 400 if we were to dip back to there

After that you know pretty big support coming in around about 355 that sort of area let's bring the indicators back into the equation so not surprising in the short term with the rsi we always see this with rsis when we have strong trending markets the rsi has been um overall been overbought since the the end of july the macd which is when the macd gave a buy signal back then towards the end of july and has stayed overboard as the shares have moved higher but of course this is why

I think you have to occasionally take these extremes with things like rsi with a pinch of salt because it's been it was pretty much overbought since the beginning of june when the shares were around uh 325 a share so i think in a strong trending market like this price is much more important so let's focus on that so what i'd like to do is buy a dip um so if we did get a dip back to the low 400s that looks like an opportunity we

Have the existing position on apple anyway and perhaps a stop the other side of these lows uh somewhere the other side of 350. let's just set that up so my order's ready to go i want to buy four if the price falls to um 410 perhaps a little bit optimistic at the moment but it is only back to where it was less than a couple of weeks ago if that order gets filled put an order in put an order a stop order in at 340. let's just place that place that order

And i think we need to do perhaps a little bit of maintenance on the existing position let's take a look at that so i bought in a 367 with a stop at 320 and that was for i think a couple of hundred pounds of risk because the market has moved reasonably in our favor i think we need to move the stop up on that one so what i'm going to do is move my stop to break even and slightly more i'll move the stop to um 390 on that so that's done so this way i'm locking in a bit of profit but i

Don't want to get out now because the trend is uh is still strong so i'm happy to run the existing position and we'll see if this new order gets filled but for me it's only if we start to lose that that july low does it look as if this trend is uh well and truly over um but for now that breakout we saw in apple has certainly performed well and the stock is still strong so let's talk about bank of america different story uh to apple but july um results that

For the latest quarter they beat expectations as well earnings per share came in at 37 cents a share that was versus the 27 cents the market was expecting revenue came in line with expectations uh bond trading revenue was the star performer here up by around 50 equity trading up by around about seven percent but a very different performance those apple shares we were looking at so bank of america shares for the year to date down at around 24 so a bit of a weak performance um but

Does this mean there's potential here let's talk about the levels then we'll jump on the chart so for me the next really big obstacle uh it's the may highs up around 29 a share but then we do have various support levels left on the way down we do have to leave a recovery trend going on out in bank of america let's jump on the chart take a look at this and see if there's an opportunity bank of america is a really interesting one it's still well off um the highs for this year highs for this year uh

Were set pretty much the beginning of january just above 35 dollars a share the share price almost halved going into march and um is trying to recover but it's still what almost 20 percent uh below those highs when we have the s p 500 at the moment the time recording still um you know pretty much uh back to those previous all-time highs so i think we have a bit of a lager here in bank of america but what i'm interested in

Is the trend this recovery trend is still going so even though it's a little bit slow let's pick up on this trend so our recovery off the march lows looks something like this great trend line we've got three touches on the trend line all looks good we've got trendline support coming in around 24. so for me um i'd definitely be happy to be a buyer on weakness um i can put my stop either underneath these lows they're coming in

Around 20 to 35 that sort of area uh if i want to give it a bit more room perhaps the other side of 20. so i think this is another one where i'm going to place an order but let's take a look at the um the rsi in the macd so the rsi again um overbought at the moment because we have had a bit of a run over the last couple of weeks so if we're going to follow the rsi if the market does what the rsi what happened last time the rsi was overbought beginning in june we did see something of a selloff uh

Macd gave a buy signal middle of july is still long uh but not really moving to an extreme so what i might do here again i think is is place an order the market at the moment it's 27 27 to buy i'm gonna put my order in i think at 25 dollars a share for this one with a stop loss the other side of 20. let's set that up so i want to buy 50 if the price drops to 25 if that gets filled put a stop order in the other side of those may lows so put

That in at 19.50 and it's for our usual risk in this example of just over a couple hundred pounds that's what we normally risk on these trades let's send it through i do think this is an interesting one clearly it's lagged behind the uh the broader market recovery but a great recovery chugging along since march and i do think it starts to get interesting if we do see it under a little bit of pressure from the current levels that's it for our look at

A couple of popular stocks with uh mr warren buffett we'll leave things there so from me david jones and capital.com good luck with your trading for more trading videos just like this please subscribe to our channel

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