Do Like Berkshire Hathaway Inc. (BRK.B) Or Buy Up The Balance Sheet A Little Bit So You Have Less Volatility: Kevin O’Leary

Warren Buffett’s Berkshire Hathaway Inc. (NYSE:BRK.B) is renewed for its unique strategy of pursuing riskier investments, with higher yields than the ones offered by the governments. However, do not be mesmerized by the large returns as a scratch in profits for Berkshire Hathaway Inc. (NYSE:BRK.B)’s $500 billion assets is a deep hole in the budget of a regular investor. CNBC tried to capture both of these aspects in their recent report.

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The global economy is unwell as many countries face problems of different nature and the dollar got relatively strong. Berkshire Hathaway Inc. (NYSE:BRK.B)’s strategy for this particular situation is to invest high-risk high-return and get the most of it.

“And right now the dollar is king and every other currency in the world are the king’s subjects. […] So the US dollar is seen as a safer place in this global turmoil, our earning are much better than the Treasury Yields,” said Jim LaCamp, UBS.

Notwithstanding the facts above, it’s a treacherous tactic for a relatively inexperienced eye as it carries too much risk, which only few can afford. A safer solution than Berkshire Hathaway Inc. (NYSE:BRK.B)’s one is to hedge some of the potential losses through much safer financial instruments.

“Investors should realize that everything north of the common share: the convert, the preferred share, the senior debt, the LIBOR resets, all of these instruments get paid before the dividend, that Warren if talking about. And in my portfolio and I think in many Americans’ should also consider: buy up the balance sheet a little bit so you have less volatility,” said Kevin O’Leary, “Shark Tank” investor.

Now, this doesn’t mean that every single investment should have a back-up in the form of more secure assets. It just works as a reminder, more of a safety belt, for those that don’t have neither Warren Buffett’s power of almost $45 billion nor his experience of more than half a century of doing business.

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