Grant Cardone: Warren Buffett Could Make $1T Thanks to This 1 Investment Move
Written by
Gabrielle Olya
Edited by
Ashleigh Ray
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Warren Buffett is well known for being one of the greatest investors of all time. His main strategy is value investing, an approach that involves finding undervalued companies and investing in them for the long term. He also follows the 90/10 investment rule, which involves investing 90% in low-cost stock index funds and 10% in low-risk government bonds.
Buffett is such a big believer in Treasury bills as an asset class that he now holds over $200 billion worth. Here’s why Grant Cardone, fund manager and CEO of Cardone Capital and Cardone Training Technologies, believes this investment could pay off handsomely for the Oracle of Omaha.
Buffett Is Likely Betting on Lower Interest Rates
Buffett’s Berkshire Hathaway bought $229.5 billion worth of Treasury bills and fixed maturity securities in the first six months of the year. It now holds more T-bills than the Federal Reserve, which holds $195.3 billion in the bills, according to Quartz reporting.
Cardone, who will be hosting the 10X Wealth Conference in Aventura, Florida on Nov. 17-18, believes this is a strategic move on Buffett’s part.
“Warren owns more Treasury bills than the U.S. government does,” Cardone told GOBankingRates. “When he sold his Apple and his Bank of America [stocks], people were talking about what he sold, but they weren’t talking about what he bought.”
Cardone continued, “He bought Treasury bills, which means he believes that the interest rates are going to go down, and he could make four times his money.”
Invest in What You Know
Cardone does think this strategy will ultimately pay off — but it’s less about buying Treasury bills and more about making investments that you are knowledgeable about.
“[Buffett] doesn’t invest in something he doesn’t know,” Cardone said. “I don’t think he’s ever looking for one exit. He wouldn’t get on a road where there’s only one way off the road. I don’t buy real estate where my only exit is to sell it. I want to be paid while I wait.”
While Cardone knows real estate, he believes Buffett knows how the Federal Reserve will behave and how that will affect his investments.
“Warren’s an insider,” he said. “I think Warren Buffett will make $1 trillion profit on his investment in Treasury bills because I think he knows that interest rates are going to go back to 2%.”
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