In the shoes of Warren Buffett: What company would I buy with 125 billion USD?
Over the past few years, Warren Buffett has been extremely careful how he uses his capital. The cash position of his company Berkshire Hathaway just exceeds the market capitalization of more than 450 companies in the S&P 500, more than 80 in the Nasdaq 100 and 11 in the Dow 30.
So let us make a mental game with the following question: What would I do with his 125 billion dollars
I have chosen the following criteria to evaluate the individual companies:
- Do I believe in the business model?
- Is the company in a good position both financially and in terms of its product range?
- Do I believe in the directors?
Without going into too much detail in Balance Sheets, Cash Flow Statements & Income Statements now, a few exciting candidates will emerge:
- Goldman Sachs
- General Motors
I would exclude these companies for the following reasons:
- UPS and Cosco, because it’s a race to the bottom.
- General Motors, because their cars are outdated and I don’t feel that they still bring big innovations
- Goldman Sachs and PayPal, because cryptocurrencies are gaining more and more trust and will soon replace the banks.
- T-Mobile, because here companies like Apple control the customers.
- Boeing, because the corporate culture is broken.
- IBM, because more and more things are becoming mobile and Chinese companies or Apple are taking over here.
That leaves 4 companies for me:
Even though I see McDonald’s and Starbucks as an interesting business model, many of these business models are being challenged by online deliveries and health focus. For this reason, I exclude these companies for purchase or investment.
That leaves Tesla and Nike — and here it gets difficult. I find both companies extremely exciting, with innovative products, a large fan community and a great corporate culture. While Nike has a highly profitable business model with a clear sustainability, Tesla has not yet solved all the long-term issues. However, Tesla would definitely have much more upside potential. Nevertheless, I wouldn’t want to invest my 125 billion in a company where there are still some issues to be resolved.
So my decision would be: Buy Nike completely and invest the rest in Tesla shares. That way I would see the best risk-benefit potential for me.
Write me in the comments how you would rate the 12 companies and how you would invest the 120 billion USD.
For more content from Julian on investing, blockchain and cryptocurrencies, go to www.youtube.com/julianhospenglish
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