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What Warren Buffett thinks about asset allocation

We don’t hold any committee meetings. The business of saying you should have 50% in stocks, 30% in bonds…it’s nonsense.

The idea of recommending that assets should be split 60/40 [between stocks and bonds], and then have a big announcement that you’re moving to 65/35 is pure nonsense. It just doesn’t make any sense.

Charlie Munger: Berkshire doesn’t do much conventional asset allocation. We just search for good opportunities and don’t want to put up artificial barriers. In this sense, we’re totally out of step with modern portfolio management, but we think they’re wrong.

Well over 80% of our assets are in the U.S.

Charlie Munger : When have you ever done a big asset allocation?

Never. But if junk bonds had stayed low for longer, we could have invested $30 billion instead of $7 billion.

Source: Berkshire Hathaway Annual Meeting
Time: 2004, 2005

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