Bernie Goldbach in Horse & Jockey | Image from Yahoo Finance
THE SUNDAY PAPERS have speculation about Facebook's institutional investors and unrelated disparinging Twitter chatter suggests there's no magic in flushing money into start-ups. I look at Warren Buffett because his investment success over the decades has been admirable.
Buffet did not buy into Facebook. His decision might not be a judgment call about Facebook but rather more a risk-adjusted ploy based on the current level of technology stock he already manages. A lot of investors review Berkshire Hathaway's financial reports and buy the same investments Buffett owns. That's nearly impossible across Buffet's portfolio because a lot of the portfolio lies with companies that aren't publicly traded.
It's important to know that you can have an "investment" just by owning a single share of stock. Decades ago, I owned small chunks of both IBM and United Airlines stock. I considered myself an investor. I also flew with a guy who had a single Berkshire Hathaway share. At a per-share price of about $122,000, few people can afford to own even one share of Berkshire's Class A (BRK.A) shares. The Class B (BRK.B) shares sell at about $80 a share, but owning them erode a portfolio's diversification.
I've seen people accused of conflicts of interest for their investments in mutual funds, even though they didn't know where the funds managers were placing their money. An investment is where your money is making money. Even the biggest haul of communion money today won't buy a full share of Apple stock but if I was a financial advisor, I'd tell the young recipient to pour the gift money into a single share of Apple where it will grow faster than in any standard bank account in Ireland today. And assuming that initial investment came from at least a dozen warm-hearted (read open walleted) uncles and aunts, the young person should be able to buy an unlocked iPhone with his or her Apple investment by the time college starts.
Bernie Goldbach curates links about Apple currently trading at $530 a share.
