I’m all ears!

I’m not a “domesdayer” but why are folks so bullish on ETFs based on U.S. blue chip stocks when some of the most legendary investors in North America—with incredible records going back decades—are sitting on so much cash?  

I mentioned this in the past but as a percentage of equity, Warren Buffett is sitting on about 33% cash, according to his latest SEC filing—a percentage that has been moving up since 2013. And he says “He hates cash”…You know what he hates more? Paying too much for stocks. I looked up one of his favorite metrics—total stock-market value as a percentage of the U.S. economy—U.S. stocks are dangerously overvalued.

Two other investing powerhouses are even more cautious. Fairfax Financial chief Prem Watsa, the “Warren Buffett of Canada,” is now about 43% in cash (not as much as Buffet’s $100 billion – about $17 billion), while Seth Karman of Baupost Group—the author of “Margin of Safety”—the classic book on value investing—is holding about 40% of his firm’s assets in cash.

What do the average folks know that these three men don’t? 

I’m all ears.

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