It seems like everyone is saying the bond market looks attractive now, but one notable investor isn’t on board.
Berkshire’s investment portfolio has gotten even more equity-heavy with time. When 10-year Treasury debt yielded less than 1% in 2020, Buffett marveled at the willingness of bond investors to accept that paltry rate. Ten-year Treasury debt now yields about 4.6%, but Buffett is still holding back. But Berkshire takes what investors call a barbell approach. It has a big slug of riskier assets, in the form of stocks, nearly half of that Apple , and a large amount of low-risk assets, mainly cash. The cash amounts to a substitute for bonds.
Asked at the meeting about an insurance contract with American International Group in which Berkshire took a $10 billion premium for insuring against $20 billion of long-term liabilities, Buffett said: “And when we take that $10 billion, we don’t agree to put it in 5-year bonds and 10-year bonds. We don’t even think that way.”
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Source: Investingcom - 🏆 450. / 53 Read more »
Source: Investingcom - 🏆 450. / 53 Read more »