Charlie Munger: Portfolio Diversification

They have their reasons the way they operate. Hopefully, the video helps to understand why.

Cheers,
Oracle.

 

Treasury Bills are essentially the same as short-term bonds aren't they?

link

Treasury Bills prices don't move much as they mature in a short time frame

 

At a guess, looks like publically traded equities, bonds, cash.

Excludes owned subsidiaries which would make up the rest.

 

Yes. However a gov’t guaranteed high interest online account or short duration term deposits can do the same job and pay a much better rate.

From memory Bernstein currently holds short term treasuries, CDs (term deposits), high interest cash deposits and TIPs (inflation protected bonds) but is less keen on TIPs given the pathetic rate of return. He avoids Bond “Funds”.

This is similar to what we do for our risk free portfolio component. We have relatively small “indexed” Gov’t DB Super Pensions which is a much more attractive equivalent to TIPs, high interest saving accounts and short duration (3 month) term deposits. We will never own Bond Funds where you have no guarantee of a “known” amount of capital at a given point in time to meet liabilities.

 

My parents are risk averse, so savings in term deposits over the years which are finally having a comeback

Judo Bank also gives them a loyalty bonus