At the 2024 Buffett Shareholders Meeting, I saw something different, and the risk is imminent

There are two things that are most eye-catching in the market this week. The first is the sudden death of Mr. Simons today. I wrote an article on the official account this morning. "Breaking news, Simons passed away. What are my thoughts on the five golden sentences that inspired me the most?

https://mp.weixin.qq.com/s/OIZBgZ_4_kmzNP3fCsXiAQ…

The other is that the Buffett Shareholders Meeting was held last weekend. Because I have always wanted to read the information and think more comprehensively and deeply, I didn't rush to write an article. Overall, I found that most articles on the market did not have many new views on this shareholder meeting, which was similar to what was said in history, and it felt a bit like revisiting chicken soup.

However, I have seen some strange insights through Mr. Buffett's holdings.

As of the end of the first quarter, Buffett's cash holdings had reached 182.3 billion US dollars, and the proportion of holdings has far exceeded the largest holding Apple (135.4 billion US dollars).

In response, a shareholder asked, what opportunity are you waiting for? Why not at least allocate some of the assets?

Buffett's reply was that I don't think that the 182 billion can be effectively allocated under the current circumstances. We only swing when we encounter pitches that we like. I don't think you should swing at every pitch, or swing at the third pitch because you missed the first two pitches.

So, I actually wrote an internal article on the planet this week, "What should we do if the crypto market bull market ends?" https://articles.zsxq.com/id_6ot7wg6v1c1x.html...

In fact, in addition to a small amount of Tesla's spot and option positions, I also have TLT positions, and some flexible option positions to collect cash flow. At present, US stock short-term bond funds account for nearly 50% of my personal positions. I have been saying that US stocks are actually at a high technical and valuation level.

So what should we do now? I think waiting is a very good choice, including Mosaic must recover some US dollar standards.

Let me share my thoughts on the topic of waiting, and by the way, the choice of strategies for option buyers and sellers:

Option buyers and sellers typically correspond to high odds and high winning rates.So when is it appropriate to open a position for these two types of strategies?

① Option buyers

The best opening conditions are either that the market has been sideways for a long time and the volatility has been suppressed to an extremely low level in history; or that an extremely important event is about to happen, but the market is calm and the volatility is very low. Of course, this kind of situation where the right time, place and people are all ready occurs very rarely, and it often takes a year to wait for 1-2 times.

If the best investment opportunity for a tool or strategy needs to wait for many years, what should we do?

The best way is to learn as many investment tools and strategies that are weakly correlated with each other as possible. The specific dimensions include varieties, directions, markets, industries, etc. They must be weakly correlated, and negative correlation is best. The more knowledge and experience we accumulate, the more good opportunities we can find.

Reviewing the past 10 years, the best buying conditions for A-shares appeared in the first half of 2014 and the end of 2018. These two time windows plus the beginning of 2021 also showed the best buying conditions for convertible bonds.

Looking back, we will find that every two or three years, there will be a good investment opportunity. Here we are only talking about major asset classes. If we include options, graded A and other tools, as well as arbitrage and individual stocks, there will be more opportunities. As long as we seize one of them, we will have a good return. All we need is our circle of competence and patience.

② Option seller

Option sellers are the opposite of typical option buyers, with high win rates and low odds. If the investment point of low win rate and high odds tools and strategies is waiting, then I think the investment point of high win rate and low odds tools and strategies is risk control.

The reason is simple. It is easier for us to make money on tools and strategies with high win rates and low odds. Because it is easy to make money, investors tend to relax risk control. In fact, the occurrence of an extreme risk event may make our accumulation of many years vanish.

Therefore, the greatest significance of tools and strategies with high win rates and low odds is that we can keep playing at the table and accumulate small wins into big wins. The investment competition is not about short-term explosive power, but about who can live longer. This is also the advantage of such tools and strategies.

Let us have a stable cash flow to hold the target with peace of mind, and don't think too much.

To sum up:

At present, whether it is the US stock market or the crypto market, being more cautious and taking more profits may seem conservative to us ordinary retail investors, but it is indeed the best offensive means. When the core target really has a chance to hit the ball, we just have the right cash flow.