Hindsight is 20-20. Too many lay people (and semi-professionals) think the investing benchmark is the asset that has performed the best yesterday.
Of course any half decent manager should have held gamestop for the two days it doubled in price, then gone short for the day it halved, then not traded it for a year till and punted some doge coin then back to gamestop the day it went up by 75%. You know, buy at the low and sell at the high - every day.
Of course, few will talk about buying NVIDIA stock at $33.00 in November 2021 (pretty sure crypto and AI were buzzy then too ... and people were paying 2x for a scalped 30XX series cards) and watching it trade to $12.00 over the following 12 months.
You're right. I have invested in Nvidia in 2016 and rode all ups and downs. I can clearly remember the drops in 2018 and 2022. In hindsight, I should have bought more Nvidia than Micron in 2018. I thought that my position in Nvidia was large enough despite knowing it being the better the company overall.
Concentration makes you rich, diversifaction makes sure you remain rich.
Buffett has said times and times again that he doesn't give two damns and never holds any such "regret moments".
He only swings at business opportunities he understands in his circle of competence. He understands logistics, banking, insurance and the strength of some brand moats, so that's where he puts his money in.
The only tech stock he and Munger said they missed was Google, because BH used Google's ads for years and years and could see how effective it was for them, and how much money it made Google.
So they admit there they could've swung, as it was in the circle of competence to analyse Google's business and numbers and yet they didn't.
But Nvidia? He couldn't care less. Or do you expect him to regret missing Cisco and Intel too because they became the highest market cap companies in the world in few years on top of internet hype.
He has been in investing how many decades now? And he has seen price go up and down enough times to know that it will happen again. And timing the market is quite hard. So more sensible thesis is to pick up those sort of strong stocks when they are very reasonably valued.
Anyone with big investment in Nvidia or Tesla and such have to ask when will it peak? As everything has a peak. And finding that one is very hard.
> Nvidia shares have gained 250% over the past year
Yes and to me this is a big warning, If I was an investor and had this stock, I will sell it all as soon as I could. I think tomorrow (or today?) it is splitting.
Time to take the profit and invest elsewhere. When the AI frenzy crashes, and I thinking the day is coming, maybe a year or 2, but the crash will make the dot-com crash look like a fender-bender.
If I had sold my share when they gained 250% then I would have been out of Nvidia years ago.
My initial shares on Nvidia have gained >10000%, on average I'm at >5000%.
The time to get out of Nvidia is when you the value of their business model goes down. Fortunately, many don't even understand the business value behind Nvidia's activites as they think Nvidia = AI chips only.
One issue is that NVDA has a very large moat, and that moat is Lisa Su.
CUDA has NVDA locked into this category of applications for a long time. There is no specific hardware reason that AMD couldn't compete, but when geohot tried to directly engage Su on the major software failures of AMD, she told him to go fuck himself, and that they're not going to do anything because their software support is perfect.
Bubbles rarely "burst" - they usually end up getting more evenly distributed over time, with the large, popular bubble players deflating spectacularly, and smaller players taking up the slack. So it might seem a solid play to short NVDA against an AMD long.
But Lisa Su graduated from MIT, and therefore she is a better class of person than anyone else. Her company's software is perfect. And it's this kind of hubris that will ensure NVDA's moat remains longer than you likely think.
This easily is just chance. Berkshire doesn’t hold stock in most companies. If it’s a conscious choice however, it’s a data point that Nvidia is overpriced. Don’t bet against Warren.
From 2013 when graphics card had shortages and crypto was reigning supreme, nvidia was an obvious buy. AMD returning from the grave with their Zen platform while their stock was $4 was another no-brain decision. I suggested these two stocks to everyone and I made a few of my friends millionaires. Sometimes investors miss a great opportunity. BH is no different.
The obvious part to invest in Nvidia was 2015/2016 when they started to make money in data center.
Nvidia managed to move the GPU into data center and started to compete with Nvidia but actually creating a new market because CPU and GPU data centers weren't direct competitors since they are designed for different types of compute.
From 2016 to 2022, so long before ChatGPT, Nvidia's DC revenue has been growing 50-100% YoY but because it started small, it was overshadows by shortages and crypto in the finances. But the indication was there.
My investment in 2016 was on Nvidia building data center platforms for machine learning as I have listened to GTCs back then as well. Nvidia could have stopped the gaming business at any time, I wouldn't mind as it was never considered in my investment thesis.
A lot of investments seem obvious in retrospect, most end up middle-of-the-road, and quite a few end up being gambles that don't pay out. Certainly there are points where both AMD and NVIDIA offered good paydays--and also points where they looked like dogs.
Make enough well-informed and diversified bets over the past couple decades and you've probably done OK in tech investing (and employment) if not necessarily life-changing.
I mistyped my comment. Nvidia was an obvious buy when their p/e was extremely low yet all of their product was in demand. AMD released Zen which gave Intel a huge run for its money right before spectre and meltdown. That is not hindsight, that is fundamental trading.
It is ok to miss out on these opportunities, not everyone pays attention. But to call it the benefit of hindsight is a misnomer
Of course any half decent manager should have held gamestop for the two days it doubled in price, then gone short for the day it halved, then not traded it for a year till and punted some doge coin then back to gamestop the day it went up by 75%. You know, buy at the low and sell at the high - every day.
Of course, few will talk about buying NVIDIA stock at $33.00 in November 2021 (pretty sure crypto and AI were buzzy then too ... and people were paying 2x for a scalped 30XX series cards) and watching it trade to $12.00 over the following 12 months.