06-30-2022, 01:15 PM
Why did Warren Buffet buy stocks in HP recently?
<!-- SC_OFF --><div class="md"><p>Berkshire Hathaway has a lot of cash. I want to know the reasoning to buy stocks at a time of rising interest rates?? </p> <p>HP dividend yield is 2.83% (according to google).</p> <p>To me his actions don't make sense. </p> <p>Lets say if I have $100,000 to invest.</p> <p>In the past people paid $100,000 to get 8% return (lets say in 2001), then paid $100,000 to get 5% return (lets say 2010), now recently people have been paying 100,000 to let a lousy 3% return (lets say 2020)</p> <p>So if I am someone who invests for say income, for $100,000 I would have got $8,000, in 2001.</p> <p>So in 2020, I would need around $270,000 to get around the same $8000.</p> <p>If stock prices have been going up, because people have been chasing every lower returns e.g. 8% -> 5% and now 3% (largely because interest rates were going down)</p> <p>The reason for people accepting lower returns is because interest rates kept falling, so people were okay with lower returns. </p> <p>Does that mean stock prices have fall, to entice investor to put money in those stocks?. If HP is paying 2.83%, I would want the stock price to fall, so that my return is say around 6%. </p> <p>As bank interest rates are rising, why would people put money in stock.</p> <p>So for me, I would hold to cash, until returns improve?</p> <p>What is Berkshire Hathaway seeing that I am not?</p> <p>Sorry I have done bad job in explaining what I am trying to ask, but hopefully it will make sense to someone and may be they can re-write it or explain it in a simpler form?</p> <p>​</p> <p>​</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/HyperClub"> /u/HyperClub </a> <br/> <span><a href="https://www.reddit.com/r/investing/comments/vni7dq/why_did_warren_buffet_buy_stocks_in_hp_recently/">[link]</a></span> <span><a href="https://www.reddit.com/r/investing/comments/vni7dq/why_did_warren_buffet_buy_stocks_in_hp_recently/">[comments]</a></span>
<!-- SC_OFF --><div class="md"><p>Berkshire Hathaway has a lot of cash. I want to know the reasoning to buy stocks at a time of rising interest rates?? </p> <p>HP dividend yield is 2.83% (according to google).</p> <p>To me his actions don't make sense. </p> <p>Lets say if I have $100,000 to invest.</p> <p>In the past people paid $100,000 to get 8% return (lets say in 2001), then paid $100,000 to get 5% return (lets say 2010), now recently people have been paying 100,000 to let a lousy 3% return (lets say 2020)</p> <p>So if I am someone who invests for say income, for $100,000 I would have got $8,000, in 2001.</p> <p>So in 2020, I would need around $270,000 to get around the same $8000.</p> <p>If stock prices have been going up, because people have been chasing every lower returns e.g. 8% -> 5% and now 3% (largely because interest rates were going down)</p> <p>The reason for people accepting lower returns is because interest rates kept falling, so people were okay with lower returns. </p> <p>Does that mean stock prices have fall, to entice investor to put money in those stocks?. If HP is paying 2.83%, I would want the stock price to fall, so that my return is say around 6%. </p> <p>As bank interest rates are rising, why would people put money in stock.</p> <p>So for me, I would hold to cash, until returns improve?</p> <p>What is Berkshire Hathaway seeing that I am not?</p> <p>Sorry I have done bad job in explaining what I am trying to ask, but hopefully it will make sense to someone and may be they can re-write it or explain it in a simpler form?</p> <p>​</p> <p>​</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/HyperClub"> /u/HyperClub </a> <br/> <span><a href="https://www.reddit.com/r/investing/comments/vni7dq/why_did_warren_buffet_buy_stocks_in_hp_recently/">[link]</a></span> <span><a href="https://www.reddit.com/r/investing/comments/vni7dq/why_did_warren_buffet_buy_stocks_in_hp_recently/">[comments]</a></span>