Buffett Rates Your Income-Heavy Czech Stocks a 6: Beware Zero Cash

Well, hello there. Pull up a chair, grab a Cherry Coke, and let’s take a look at what you own. Looking at your investments, it seems you’ve got more brokerage accounts than I have suits! Fio, Airbank, Portu, Coinbase, a DIP account—you’re spreading your capital across so many platforms I’m surprised you haven’t lost your login passwords.

Investing isn't about collecting brokerage accounts like baseball cards. It's about owning wonderful businesses at fair prices and letting them compound over time. You’ve clearly been bitten by the investing bug, and I commend you for putting your capital to work. You've got a healthy dose of index funds and some cash-flowing businesses that actually produce earnings, which Charlie Munger and I always loved. But you’ve also got a few habits that make me want to cover my eyes. Let’s crack open the books and see what you actually own.

When I look at your sector breakdown, I see a portfolio heavily geared toward income, making up over half of your investment strategy. You’ve got a sturdy foundation of Utilities at 15% and Finance at 16%. Businesses like CEZ, Moneta, and Komerční banka generate real cash, pay dividends, and benefit from switching costs and scale advantages. That’s the kind of competitive moat Charlie and I look for. A good bank with sticky deposits is a beautiful thing.

You’ve also allocated about 36% to broad market indexes, specifically S&P 500 and Euro Stoxx 50 funds. I’ve always said that for most investors, a low-cost S&P 500 index fund is the absolute best choice. You're betting on American business, and that's a bet that has paid off for over a century.

However, I couldn't help but notice your cash reserves are sitting at exactly zero. Zero! Cash is a terrible long-term investment, but it is the ultimate oxygen when the market gets depressed. If Mr. Market wakes up tomorrow in a terrible mood and puts wonderful businesses on sale, you have absolutely no dry powder to take advantage of it. When you have zero cash, you're forced to be a bystander—or worse, forced to sell good assets at bad prices if an emergency strikes.

Charlie used to say, "All I want to know is where I'm going to die, so I'll never go there." Here are the places in your portfolio that look pretty dangerous to me:

🚩 Swimming Naked Without Cash: With absolutely no cash reserves across your entire portfolio, you have no margin of safety and no flexibility. Idle money earns nothing, but right now you don't even have a rainy-day fund to deploy when opportunities arise.

🚩 Rat Poison Squared: I see nearly 10% of your net worth is sitting in cryptocurrency. Bitcoin and Ethereum produce nothing. They don't pay dividends, they don't grow crops, and they don't manufacture goods. You are purely hoping someone else will come along and pay more for it than you did. That’s speculation, not investing.

🚩 Extreme Home Country Bias: While you have some S&P 500 exposure, over 55% of your portfolio is concentrated in emerging markets—specifically the Czech Republic. Furthermore, nearly 20% of your entire wealth is tied up in a single tobacco stock (Philip Morris CR), and another 15% in one utility (CEZ). That is an enormous amount of single-country, regulatory, and company-specific risk.

🚩 Diworsification of Index Funds: You own the S&P 500 through Vanguard, iShares accumulating, iShares Euro-hedged... and you hold them across four different brokerages. You are buying the exact same 500 businesses in a confusing, tangled web. Complexity is the enemy of returns.

🚩 Speculative Fluff: Buying fractions of a percent in companies with absolutely no competitive moat—like Pilulka Lékárny—is a waste of time. If a business doesn't have a moat, someone will eventually come along and eat their lunch.

I'd give this portfolio a 6 out of 10. You are saved from a lower score because you clearly understand the value of cash-flowing businesses, banking, and the S&P 500. But your execution is incredibly messy, and your risks are highly concentrated.

Here is what I would do if I were standing in your shoes:

1. Build a Cash Fortress: Stop buying for a moment and build up at least a 5-10% cash reserve. You need capital ready to deploy when others grow fearful.

2. Clean Up the ETF Soup: Pick one low-cost S&P 500 ETF and stick with it. Consolidate these duplicate holdings across your various brokerages. Keep it simple.

3. Assess Your Concentration: Take a hard look at having nearly 20% of your wealth in one tobacco company. Even a great business becomes a bad investment if you have too much of your net worth riding on it.

4. Evict the Cryptos: Take that 10% tied up in digital tokens and move it into productive assets that actually generate earnings and free cash flow.

Remember: “The stock market is a device for transferring money from the impatient to the patient.” Simplify your holdings, build up some cash, and let the great businesses do the heavy lifting for you.