After all of the most important superinvestors and hedge funds reported updates on their Q2 portfolios there were two things there were most shocking..
One of them was Li Lu increasing his PDD position by 133%, which I understand as PDD looks like one of the most undervalued major cap businesses in the world.
But what was the most shocking was Warren Buffett (or Greg Abel) buying Google at $357/share. I think its Greg Abel even tho Buffett went to give an interview and said he bought Google.
Before you start telling me how Google is cheap or best business or whatever, let me first lay down some facts..
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**Positives about Google:**
\- an AI leader
\- most profitable company in the world
\- best company in the world
\- extremely well managed
\- huge moat
\- diversified with amazing businesses
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**Negatives about Google:**
\- questionable SpaceX position
\- adding 40B into Anthropic investment
\- growing capex (91B in 2025, 190B in 2026)
\- valuation (screening at 18, but closer to 40 if we discount for anthropic and spaceX earnings)
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And I understand all of this is fine, and Google is in good position to succed, but if we compare it to previous big "bets" Buffett and Munger did, for example Apple..
**Five of the biggest buys of Apple came at these valuations:**
\- Q2 2016 - 5.4 million shares - 10-12 P/E, (S&P 500 P/E 25)
\- Q4 2026 - 42.1 million shares - 11-14 P/E, (S&P 500 P/E 22.9)
\- Q1 2017 - 70 million shares - 13.5-16 P/E, (S&P 500 P/E 23.5)
\- Q3 2017 - 3.9 million shares - 16-18 P/E, (S&P 500 P/E 24.1)
\- Q1 2018 - 75 million shares - 14-17.5 P/E, (S&P 500 P/E 22.18)
So as we can see Berkshire was buying Apple BELOW the market value, which is not the case with GOOG which is trading around market valuation.
The S&P 500's normalized P/E, known as the Shiller CAPE (Cyclically Adjusted P/E) ratio is approximately 41 to 42. This valuation is the second-highest in U.S. market history, trailing only the extreme peak of the dot-com bubble (which hit 44.2 in late 1999).
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I also understand that BRK had to deploy cash somewhere, but weren't: Amazon at $200-220, Mastercard at $460, META at $500, Microsoft at $350, SPGI 350-400 better options?
You can hold these 5 companies for next 10 years without worrying they will disappear, and I would bet they outperform Google in next 3 years which gives you enough time to see the situation and rotate if needed..
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**Conclusion**:
This looks nothing like old Berkshire and it feels to me like Greg Abel is feeling the pressure as the new CEO to deploy that huge pile of cash (400B --> 365B).
His other picks in Q2 were DAL, MACY's, LEN and NYT..
So my question is what is the idea of Berkshire now? Is it value investing, quality investing or FOMO?
I think Charlie Munger is turning in his grave.. RIP GOAT..