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Carnival of Berkshire #4

A couple more weeks until the HBO documentary on Warren Buffett airs. The trailer looks interesting. It still boggles me he’s worth almost $100 billion. That’s a lot of zeros ($100,000,000,000).

Although no affiliation with Berkshire Hathaway, Wally Weitz of Weitz Investments put out a great Letter to Investors. It’s a great read on discipline and sticking to value at a time when the market is expensive by various measures. He also had a brief mention on the Buffett Indicator:

“This tool is a blunt instrument—it is not useful for short-term trading signals. However, over the past sixty years, total market capitalization has generally ranged from about 30-130% of GDP. During December, the ratio was about 120%. This evidence that stock prices are on the high side is consistent with what we see when we analyze individual companies. This is not to say that the “Trump rally” cannot continue or that prices have to fall, but it gives us some comfort that the opportunity cost of holding some dry powder will not be too high.

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