Warren Buffett is famous for the way he not only survives Market crashes but profits from them the best thing that can happen from Berkshire standpoint is to have markets that go down in a tremendous amount we'll show you the strategy that he employed before the 2000 collapse the 2007 financial crisis and importantly what he's doing today leading up until 2000 there was a storm Brun when an online toy company that's losing money sells for a p ratio over a th000 something is wrong the market was in a bubble and we all know this period as the do collapse so what was waren Buffett doing before this crash year we have that information and some people might ask Cooper how did you get this information that answer is easy I gave Buffett a call and he told me no all of his past reports are on his website you can read them and if you go to the balance sheet segment it literally shows you exactly where he put his money ranging from the cash he had to the amount that he had in stocks to what he owned in fully acquired businesses how did he prepare in a stock market bubble if you read Financial history for a couple of hundred years and take the south sea bubble and the Tulip boom and some of the panics we've had in this country we closed the stock exchange for a few months back uh around 1914 any anything can happen and you ought to conduct your Affairs so that if the most extraordinary events happen that you're still around to play the next day let's break it down simply in 1998 as the bubble was brewing he had 36.8 billion in wholly owned businesses from a portfolio perspective that made up 40.1% in the these businesses that had acquired throughout his life these include the likes of Nebraska Furniture Mart the famous Furniture Store started by Mrs B or Geico the insurance company or Seas candy the sweet company these are different to stocks because they are not publicly available businesses for anyone to buy they are privately owned in this case they're owned by Warren Buffett and Buffett he likes to hold these businesses for Life the next part to his asset allocation was $13.5 billion in cash and cash equivalents remember that cash equivalent for buffer generally mean shortterm treasury bills from a portfolio perspective that is 15% in cash and this is what he was saying about it at the time there are times when we're a wash in cash and there have been plenty of times when we didn't have enough cash we obviously are looking every day for ways to deploy cash and we would never have cash around just to have cash I mean we want to have all our money working in decent businesses but sometimes we can't find them or sometimes cash comes in expectedly or sometimes we sell something and we have more cash around than we would like and in recent years we've tended to be cash heavy but not because we wanted cash per se buffer never likes to hold cash but sometimes there are periods where you simply don't have a choice there are no other options because generally he would actually like to have his cash in this asset class year leading up until the dotom crash he had $ 39.7 billion in equity Securities this would make up about 44 % of his portfolio in equities AKA stocks stocks equity and securities all mean the same thing but these stocks back then were very different to what he has today I couldn't find the exact stocks that he owned at the time but I did find an article that showed his 10 largest Holdings that he owned 6 years earlier Coca-Cola was number one at 3.9 billion Geico was second at 2.2 billion ABC was 1.5 billion the gaillac company 1.3 billion then you've got Freddy mcwells Fargo and General Dynamics The Washington Post and Guinness to round up to top 10 these are all businesses AKA Warren Buffett's favorite asset class stocks are safe for the long run and they're very unsafe for tomorrow birkshire three times since I took over has gone down roughly 50% did I feel poor then no not at all I knew it was going to be worth more over time American Business is going to be worth more over time that's what you're buying as a business you're not buying a stock you're buying a piece of a whole bunch of businesses are those business is going to be worth more 10 or 20 or 30 years from now of course they are and so this was his portfolio back then leading into the massive Doom collapse to be honest I thought that he might have had had more cash he was being quite aggressive in the amount of stocks that he owned and the amount of businesses he owned except he was not buying all of the stocks that most people wanted to own essentially he was doing the opposite he bought J IE for $22 billion in December 1998 this was berkshire's largest acquisition in its history at that point in time that same year he bought netjets who were struggling with debt and Buffett picked them up for a cheap price relatively speaking the next year he bought bought Mid-American Energy which he paid $2 billion for he was being very aggressive which is a different approach to what he's doing now before we get into his strategy today let me show you how he prepared back in ' 07 you can imagine the American economy is an economic train moving down a track that has no ending and it picks up cargo and passengers as we go along there's 330 million of us now there were only 4 million in 1790 and our Farms are incredibly more productive and we have 75 million houses and we had a few Huts then and we have great univers and all of these things so we're just constantly moving more and more cargo and passengers along and occasionally that train is going to get derailed in 2008 the train that we call the American economy was about to get derailed in one of the most extreme cases that we have seen since the Great Depression let's look at what Buffett did before the crisis hit and important importantly what he did during the crisis in early 2006 he did an interview with Charlie Rose in which he was not complaining but saying he can't find any deals and when I look at the deals that have been made in the last year there's not one I'm envious of so I mean it isn't like we missed them you know it may turn out that I should have bought one of them but I mean there's n that I feel GE I wish I'd bought that last year but I hope I buy one tomorrow it just so happened that Warren Buffett's wish was to come true because some deals would come his way later that year and Warren Buffett gleefully signed the check the last time we talked about the rise of Berkshire haway you were sitting on give or take a billion dollars about $44 billion you didn't find anything that you were very interested in making an investment since then you've made some investment yeah we've spent over 10 billion this year one was this car which was 4 billion 80% we bought of a 5 billion business Pacific Corp was five and a fraction billion and we're finding a few things if you think of Warren Buffett like a chess player people like to believe that he's a very conservative tactician the truth is he plays the game quite aggressively he's always looking to attack the opponent so to speak he's always looking to buy stocks to deploy his cash and deliver that Checkmate no matter what the Market's doing leading into the financial crisis his portfolio was valued around $167 billion and this is how it looked cash was his smallest position at 22% of the portfolio with $37 billion sitting in cash and cash equivalents the next largest position was his wholly own businesses this was worth $55 billion or 32% of the portfolio by this time he had accumulated the likes of Nebraska Furniture Mar American Energy Buffalo News iscar to the wholly owned businesses side of his portfolio and a bunch more and then stocks were the largest asset class valued at $75 billion or 44% of the portfolio and and back in 2007 the stocks he owned looked like this his largest position in terms of market value was the Coca-Cola Company valued at $12 billion he bought all of these shares for 1.2 billion cheeky 10x the next largest position was Welles Fargo at 9.1 billion then American Express at 7.8 billion Proctor and Gamble at 7.4 billion and if you want to see the rest of the stocks he owned at the time leading into the financial crisis feel free to pause the video and check them out but very different to the stock that he owns today so that was before the crash but what about in the crash and what about after the crash as the market was crashing Buffett used the technique which I like to call the Buffett bucket technique it's based around a simple principle when it's raining gold hold out a bucket not a thimble he deployed his huge cash pile into businesses in late 2008 he bought $5 billion worth of Goldman Sachs preferred stock which provided him with a steady stream of dividends at low risk he then put $3 billion into General Electric which at the time was facing a lot of challenges again he bought preferred shares as opposed to ordinary ones which offered a nice 10% annual dividend he consistently bought shares of Wells Faro in and after the crisis Buffett had already been a shareholder of this bank before the crash but when it occurred he significantly up to stake a is a wonderful bank and it's going to do very well over time during the crash period he also invested into IBM Mars craft Hines and completed his acquisition of Burlington Northern Santa Fe in a deal valued at $44 billion even for Buffett that's a lot as most people were panicking Warren Buffett was snapping up stocks the best thing that can happen from Berkshire standpoint is to have markets that go down a tremendous amount if the market gets cheaper we will have many more opportunities to do intelligent things with money we're going to be buying things for as long as I live just like I'm going to be buying groceries would I rather have grocery prices go up or down if I'm going to be buying groceries tomorrow and next week and next month and next year and the answer is obviously I will do better if prices are lower a simple strategy but hard to implement in the throws of panic could you buy while everone ourselves there's no doubt that during the next crash Warren Buffett will do the same as what he did back then and accumulate accumulate accumulate but how is he preparing for a crash today because his strategy right now is a little different to what he did in the past after all this is a world dealing with issues like potential tariff volatility and trillion dollar AI crashes all while data suggest that the S&P 500 is the most concentrated it's been in history in fact Black Rock Vanguard Goldman and JP Morgan all predict the S&P may fall short of its typical 9% annual return so what are other wealthy Americans doing last year Bank of America surveyed wealthy individuals and among High net worth respondents 43 and and younger over 80% say they currently own art for investment purposes or would like to why art well after weing multiple 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use the QR code on the screen now or click the link in the description or go to master works.art Cooper Academy okay now let's see what Buffett's plan is for today before we get into Buffett's exact asset allocation between cash stocks and wholly owned businesses let's talk about what he's doing first as we all know he sold large positions of his Apple stock Bank of America stock and other positions but when it comes to stock buys he's not doing much at all and the stocks that he is buying are all just minuscule Investments they're so small that there's a good chance it's not even Warren Buffett making these moves but the investors under him Ted or Todd it isn't like I'm got a hunger strike or something like that going on it's just that they things aren't attractive and there certain ways that can change and we'll see whether they do I love it how Warren Buffett's version of a hunger strike is not buying any stocks to him not buying stocks is as almost as bad as not eating that's how much he likes investing and when he mentioned the ways that this strategy could change for him the only thing that I can think of that can change for Buffett to alter what he's doing is for the prices of stocks to get cheaper AKA stocks to crash it's either that or a big elephant of a company comes along and offers to sell itself to buff it at a reasonable price kind of like what happened with BNSF Railway 15 years ago but in these Mar market conditions somehow I don't see that happening which means his portfolio right now will stay similar to what it's like right now his smallest position at 24% of his portfolio worth $188 billion is the fully acquired businesses that he's bought over the years Geico Jurell BNSF Railway Net Jets Dairy Queen etc etc then we've got his stock positions valued at $271 Million worth 35% of the portfolio so these are his stocks right here apple is still his largest position at 26% % despite the large selling American Express is the second at 15% Bank of America at 133% Coca-Cola at 11% Chevron at 6% oxidal at 5% Moody at 4% and craft H's chub and deita to round off the top 10 those are his stocks but stocks much to many people's surprise are not his largest position his largest position is the asset that he's always said that he doesn't like holding a lot of which is Cash He has 3 $2 billion of cash which makes up 41% of the portfolio if Buffett doesn't start buying anything soon this could end up being half of his entire portfolio but I don't mind at all under current conditions building the cash position I think when I look at the alternative of what's available in the equity markets and I look at the composition of what's going on the we find it quite attractive he could deploy this money into Nvidia like so many the index funds are doing he could put it into Amazon or Microsoft or Tesla like the regular investor is doing but Buffett is not a regular investor and his strategy is a completely different one