Locator: 50706INVESTING.
Query :
Does BRK's cash horde of almost $400 billion represent 40% of BRK's market value of $1 trillion?
Reply:
Concentration: talking heads on CNBC constantly worry about 75% of the S&P being concentrated in seven companies. But apparently it's okay for BRK to a) hold 40% of their equity portfolio in cash; and, b) concentrate 70% of the rest of their portfolio in five stocks.
The S&P 500 is a stock market index composed entirely of equity (publicly traded stocks), not cash.
While it tracks companies that hold massive amounts of cash on their balance sheets (over $1 trillion collectively), the index itself is a market-cap-weighted portfolio of shares representing 80% of U.S. market value.
That's interesting.
In the S&P, "over" $1 trillion in cash is buried in the companies themselves.
I don't know what "over" $1 trillion really is but one assumes just that, "over" $1 trillion" but less less than $1.5 trillion.
BRK ($400 billion) and AAPL ($150 billion) would account for $550 billion of that "over" $1 trillion. Wow. Again, the S&P 500 is composed of 500 companies.
Rounded.
- Market value BRK: $1,000 billion
- Cash: $400 billion
- Total equity portfolio: $275 billion
- AAPL: $60 billion
- AMEX: $60 billion
- BofA: $30 billion
- KO: $30 billion
As an investor, even in this crazy market, could you imagine holding 40% in cash for the past two years?
