Warren Buffett's investment approach is characterized by a mix of active investment and strategic portfolio adjustments:
- Active Investment: Warren Buffett is known for his active involvement in the investment process. He personally studies companies, analyzes financial statements, and seeks out opportunities that align with his investment philosophy1.
- Strategic Portfolio Adjustments: Buffett is not afraid to make bold moves and adjust his portfolio based on his assessment of market conditions and individual company performances. For example, he has sold significant portions of his Bank of America holdings, generating substantial proceeds23.
- Long-Term Perspective: While Buffett is actively involved in investing, he maintains a long-term perspective. He often holds onto stocks for decades, giving them time to compound and grow1.
- Selective Divestment: In some cases, Buffett has divested from companies he once held in high regard. For instance, he sold a portion of his Apple holdings, though he still retains a significant stake in the company4.
- New Investments: Despite divestments, Buffett is also actively making new investments. For example, Berkshire Hathaway has been increasing its stake in Chevron and Sirius XM, and it recently invested in Dominion Energy's share of the Cove Point LNG export plant4.
Overall, Warren Buffett's investment approach is a blend of active involvement, strategic portfolio adjustments, and a long-term perspective. He is not sitting idle, but rather continuously evaluating and adjusting his investments to maximize returns and manage risks.