12 May 2023
|Index / Fund / Rate||Start of Year||Last week||This Week||% change YTD|
|Lunar BCI WW Flexible Fund||141.43||160.55||165.99||17.37%|
|JSE ALSI||73 049||78 133||78 330||7.23%|
|NASDAQ Composite||10 467||12 235||12 285||17.37%|
|S&P 500||3 840||4 136||4 124||7.40%|
|Prime Lending Rate||10,50%||11.25%||11.25%||7.14%|
|Brent Crude ($’barrel)||85,95||75.27||74.17||-13.71%|
Weekly Stocktake with Danyaal
Hungry Munger and a Buffett of Wisdom
Lunar Capital’s investment philosophy draws core features from Warren Buffett and Charlie Munger’s emphasis on investing in high-quality businesses for the long term, a strategy that has proved successful for their company, Berkshire Hathaway. As of May 12th, 2023, Berkshire Hathaway, our largest holding in the Lunar BCI Worldwide Flexible fund, had a market cap of $707 billion. According to their 2023 Q1 report, Berkshire Hathaway’s top three security-investments were in Apple, American Express, and Bank of America. Berkshire Hathaway also owns private business such as Geico, an insurance business; See’s candies; BSNF, a railway company; Duracell; and many others.
Buffett and Munger are renowned for their insightful quotes and words of wisdom. Here are some of our favourites:
“In the short run, the market is a voting machine, but in the long run, it’s a weighing machine.” – Warren Buffett. In other words, in the short term the market behaves based on sentiment or popularity, but it’s only in the long term does the real value emerge.
“A great business at a fair price is superior to a fair business at a great price.” – Charlie Munger. In other words, stick to investing in quality businesses rather than trying to get an average business at a bargain.
“Time is the friend of the wonderful company, the enemy of the mediocre.” – Warren Buffet. This one is self-explanatory.
“Never invest in a business you cannot understand.” – Warren Buffet. If you don’t understand what drives a business rather don’t invest in it.
“A great business is one that over an extended period of time earns a very high return on capital and ploughs most of that back into the business.” – Charlie Munger. A great business is one that can continue to grow at a high rate over a long period of time, and especially if it is able to re-invest its profits in growing the business at a high rate of return.
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Every Tuesday, at 07h45, Sabir chats with Nazia from Eastwave Radio (92.2 fm, live stream on www.eastwave.co.za) on investing and the markets.
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This roundup is prepared for the clients of Lunar Capital (Pty) Ltd. This roundup does not constitute financial advice and is generated for information purposes only.