From the logic of building a position to market controversy, how can ordinary investors calmly eat melons?
- Buffett bought STZ and was really trapped
The timing of building a position is a bit “mysterious”
According to Berkshire’s latest position document, the company first bought about 5.62 million shares of STZ, with a market value of US$1.24 billion. But the embarrassing thing is that after the position was built, the STZ stock price fell from US$220 to around US$160, with a floating loss of more than 25%. Some netizens joked: “It turns out that Buffett will also buy halfway up the mountain?”
- The three driving forces of the plunge
Trump’s tariff raid: STZ’s Corona beer is highly dependent on Mexican production, and the Trump administration suddenly imposed tariffs, which directly raised costs and “knee-cut” the stock price.
Performance is not as expected: The latest financial report shows that the pain of high-end transformation (such as selling low-end wine brands) is still continuing, and market confidence is frustrated.
Emotional stampede: Retail investors followed suit and sold off, exacerbating volatility. Some even doubted, “Is this really Buffett’s decision?” (After all, Berkshire’s small-position investments are often managed by deputies)
- The market is arguing: Is it a “gold pit” or a “value trap”?
Proponents (bottom-hunting):
STZ has trump cards such as Corona (global beer sales champion) and Modelo Especial (US imported beer TOP1), and its brand moat is deep enough.
The current price-earnings ratio is only 18 times, which is at a low level in the past five years. It may rebound after the policy negatives are digested.
Berkshire dares to go against the trend and may be betting on a recovery in consumption (such as the Fed’s interest rate cut expectations).
Opponents (cautious):
Tariff negotiations are highly variable, and supply chain costs may be under long-term pressure.
High-end transformation takes time, and short-term performance is unlikely to improve.
STZ’s position only accounts for 0.46% of Berkshire’s total holdings. It doesn’t hurt to lose money, but retail investors may be “under great pressure” if they hold a large position.
- Can ordinary people copy homework? (Three points of calm thinking)
Ask yourself three questions first
Can you accept a 30% drop in stock price? (Refer to STZ historical fluctuations)
Do you understand the competitive logic of the alcohol industry? (For example, do young people still drink beer?)
Are you willing to hold for more than 3 years? (Buffett rarely does short-term operations) - If you are tempted, try “sloppy development”
Small position test: For example, no more than 5% of the total funds to avoid all-in.
Focus on key nodes: Q4 2024 financial report, progress of Mexico tariff negotiations.
Hedge risks: Diversify with Berkshire’s other holdings (such as Domino’s Pizza and Occidental Petroleum).
- Don’t myth Buffett
This time, the position building may not be decided by the old man himself (Berkshire’s small positions are often managed by deputies), and he also has “wrong purchases” (such as IBM). Investment logic can be used as a reference, but it is better to learn ideas than copying homework – such as “finding opportunities in bad news” and “holding good companies for a long time.” - Self-cultivation of the spectators
Focus less on stock prices, focus more on business
Key points of STZ’s fundamentals:
Is cash flow healthy? (2023 financial report shows free cash flow of about $2 billion)
Progress of high-end transformation? (For example, the proportion of high-gross-margin spirits business)
How does management deal with tariffs? (Is the production base transferred?)
- Beware of the “bottom-fishing trap”
A sharp drop in stock prices does not mean cheap. If the fundamentals deteriorate, the bottom-fishing may go lower and lower. Are there not enough lessons from “bottom-fishing Nokia and Kodak” in history?
- Learn Buffett’s “mentality” rather than “operation”
For example, he often says: “I am greedy when others are fearful”, but the premise of greed is: you really understand this company.
The plot of STZ is still being updated. Whether Buffett “changes his fate against the sky” or “the boss overturns”, time will give the answer. But for ordinary people, what is more important is:
- Do not blindly worship authority and do not trust market sentiment
- Invest with spare money and exchange time for space
Finally, a soul-searching question: If you have 10,000 yuan now, would you buy STZ? Share your views in the comment section!
This article is for information reference only and does not constitute investment advice. The market is risky and decisions should be made with caution.