Fresh Perspective
Weekly 20 2025 + Top 5 May
The upside of being away in Omaha for six days, followed by seven days down with COVID? You take a step back from everything.
Although I kept up with company news, I had no time in Omaha to follow anything else. And once back, the fever and extreme fatigue that came with COVID left me with zero energy to do more than stay informed about our companies.
But returning after nearly two weeks gives you a renewed perspective, a much clearer view, focused solely on the businesses we own. All the noise gets filtered out.
That clarity led me to place a sell order yesterday. The limit wasn’t reached, so the order is still open. And today, I’m placing another sale.
In the current market environment, I’m selling a company trading at less than 10% below its fair value. Why? Because since we added it to our Doubler Portfolio in late December, the stock is already up 43%. Trying to squeeze out the final 8 to 9% in a volatile market like this just doesn’t make sense.
I’d rather hold cash, ready to redeploy at the end of the month, either into one of our still-undervalued positions or into a new name, if I find a better opportunity than the stocks we’ve already selected.
Is this a conscious move toward holding more cash?
In the past, I’ve often been asked whether I intentionally keep a certain percentage of the portfolio in cash or whether I sell with that goal in mind. Just like then, the recent sales are not about holding cash for the sake of it. The cash is simply the result of selling stocks that have reached most of their potential.
That said, in today’s market, freeing up cash is far from irrational. The correction in the U.S. market has already been nearly fully erased. The S&P 500 is only about 4% off its peak, already above where it stood on January 1, and about 12% higher than a year ago.
It’s starting to feel like “the only way is up.” A month ago, I wrote that it's still not our turn; ETF investors are steering the market for now. Buy the dip remains the mantra. This is also fueling a wave of finfluencers patting themselves on the back for having the courage and brilliance to buy during the recent uncertainty.
Let me repeat one of the most important takeaways Warren Buffett shared at the latest shareholder meeting: “What happened over the last 45 or even 100 days means nothing.” This wasn’t a major move. This wasn’t some exceptional buying opportunity.
For me, the recent rally is more a reason to take some profits off the table. It’s been 17 years since we last had a true crash, and the higher the markets rise, the more likely it becomes that one is drawing closer.
Not that I’m predicting a crash, maybe the market keeps climbing for another three years. But what’s essential to me is that I hold companies in the portfolio I’d be comfortable holding through a crash. Even better: companies I’d gladly buy more of if a crash came.
Companies that are trading near fair value today are ideal candidates to sell now. That way, I have the dry powder ready to strike when real opportunities come along again.
This week
No new lesson in our introduction to value investing this past week due to illness.
However, we did see updates from several of our companies, and, as always, plenty of Short News items below. The Top 5 for May is also available, featuring two new names compared to last month.
The following updates were published: