This month, 21 new Cedear were added to the Buenos Aires Stock Exchange in the Buenos Aires Stock Exchange, some vehicles in pesos that are backed with shares of companies that are listed abroad, that is, they allow investment in foreign assets without taking the money out of the country. In the list of novelties stood out the Cedear of Barkshire Hthaway, Warren Buffett’s investment fund, one of the most respected in the global market. The arrival in the local market did not go unnoticed given the interest of local savers who, when buying the share, are associated with the investments decided by the mythical American businessman.
The Cedear (Argentine Certificate of Deposit) are papers in pesos that have foreign assets as their underlying. There are Bank of America, Petrobras, Coca-Cola, Wall-Mart and more than 250 other shares that are not traded in the country. But the fact that they are a certificate does not mean that they are not associated with the action they represent: they follow their price exactly. The only difference is that they do it in pesos and, each rise or fall in paper dollars on Wall Street translates into advances and retreats of the certificate but in local currency and at an exchange rate similar to the dollar counted with settlement.
The new paper began to change hands on the local Stock Exchange on March 8, and, in just over a week of operations, it was among the most demanded Cedear, accumulating operations for almost $ 78 million.
“One is buying the Berkshire Hathaway strategy, it is a way to diversify through a single investment instrument” (Cost Pattern)
Among the new certificates, that of Berkshire Hathaway is among the most traded with a total volume of $ 141 million in just 8 business days –at an average daily rate of $ 17 million-, details from Personal Portfolio data. It is among the most traded among the new Cedears, but not the most traded: it moves much less than the $ 190, $ 200 million that are traded daily in Cedears of Tesla, Apple and Mercado Libre.
The attraction that they see in the market for Buffet’s company is that, unlike others that involve betting on specific companies, when buying this particular share it is possible to follow a diversified investment strategy in itself. Berkshire Hathaway, after all, is a finance company that does nothing but buy and sell stocks or other assets.
“By being a Buffett fund, you are making sure that you invest in the view from a person who knows a lot about the market and who will be looking at the top 10 companies in the world. Within this fund are Apple, Coca-Cola, American Express, General Motors and other large companies ”, he explained. Gloria Patron Coasts, Personal Portfolio Analyst.
“You are buying the Berkshire Hathaway strategy, it is a way to diversify through a single investment instrument,” he added.
For Jose Bano, from Investing Online, is a way of imitating the bets of the “oracle of Omaha”, as Buffet was nicknamed, with a single investment.
“It’s like putting money in a mutual fund, except that the portfolio manager is Warren Buffett,” he summarized.
Cedears such as Berkshire Hathaway are traded on the local exchange like any bond or stock. To be able to access them, you have to open an investment account at the bank of which you are a client or create an account in a stock company (settlement and clearing agent or Alyc, in the jargon). Commissions for buying or selling are around 0.5% of each operation, while the minimum investment depends on the value of each Cedear. For example, the Berkshire market was trading yesterday at $ 1,759.50.
“It’s like putting money in a mutual fund, except that the portfolio manager is Warren Buffet” (Bano)
Warren Buffett is considered one of the most successful investors of all time. The fund he runs owns more than 60 companies, including insurer Geico, battery maker Duracell and restaurant chain Dairy Queen. The son of an American legislator, the first time he bought shares was at age 11 and the first time he filed taxes was at 13.
He is 90 years old and last year Forbes magazine ranked him fourth in its ranking of richest people in the world, behind Jeff Bezos, Bill Gates Y Bernard Arnault. With data as of September of last year, the publication estimated his fortune at USD 73.5 billion.
His public statements are eagerly followed by investors around the world, and Berkshire Hathaway’s annual shareholders meeting, held each year in Omaha, was able to fill ballparks in the years leading up to the pandemic, due to shareholder interest in listen to the investment criteria of the tycoon.