Warren Buffett’s Favorite Valuation Metric Is Screaming Mayday
Should smart investors be fearful or greedy right now?
“Wrong question,” says Kris Bort, founding partner of Sakal Ventures, “Instead, we need to be asking this – is there a better investment territory, some space where Warren Buffett’s indicators don’t matter and investors don’t have to be greedy or fearful?”
If you are a Buffett disciple, checking on his favorite market valuation metric must be a terrifying experience these days. The billionaire investor once said that it is wise for investors to be “fearful when others are greedy, and greedy when others are fearful.”
The stock market has been in such a frenzy that many investors are starting to talk about the infamous dot-com bubble. Right now, a tide of greed is sweeping across the market, with networked investors targeting heavily shorted stocks and causing them to skyrocket. The whole world watched in awe how the GameStop stock surged from $20 to almost $500 in two weeks.
“It is crazy to think that brokerage firms can determine what securities you can buy. It is understandable when they want to mitigate risk and protect financial institutions by eliminating margin transactions. However, limiting the selection of what securities clients can purchase in cash transactions is ludicrous”, comments Kris Bort.
It is impossible to know when periods of greed or fear will strike or how long they will last. So this is turning into a nerve-racking game for investors. But guess what? You don’t have to play it. There is a better game where you don’t need to be terrified and confused watching daily market dynamics. Greed and fear are replaced by research, expertise and experience.
According to Bort, the best place to allocate capital right now is the private market, “The late-stage private investing sector creates a long term mindset. It forces discipline that produces huge financial gain.”
When asked about winning strategies for individual investors, he recommended focusing on the private market, which has been transformed over the past decade, “Private companies can receive proper financing without the public markets. This allows companies to become public at the right time. We see so much opportunity in this space, because most investors do not have access to the private market or the ability to research these enterprises. When these companies do reach the public markets, it allows a greater number of investors to acquire positions. This is why we believe that the private sector is the most attractive place to deploy capital today.”
If you know what you are doing or work with the right fund advising you, the capital appreciation the private market can provide is simply unprecedented. The mission of Sakal Ventures is to help private investors gain access to such exclusive opportunities. Our approach is unique: we buy best in breed companies in disruptive sectors, and purchase every security for cash, employing zero leverage.
With all the frenzy and craziness sending shockwaves through the industry right now, many people are trying to figure out their own game plan.
Sakal Ventures is here to provide guidance in this strange time. We offer FREE CONSULTATIONS to help individual investors find their winning strategy.
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