Buffett Roasts a 6/10 Asia-Pacific Portfolio Heavy on Tech Risk

Well, hello there! I had to pop open a fresh can of Cherry Coke just to settle my stomach after looking at this setup. You call this the "Pacific Rim Alpha Growth" portfolio, but looking at where your money is parked, I feel like I need a passport just to read your brokerage statement!

My late partner, the irreplaceable Charlie Munger, would have probably given you a wink for this one. Charlie always had a fascination with the East—he's the one who dragged me into BYD, after all—but even he might think you've taken the boat a little too far from the shore. You’ve put together a collection of undeniably massive businesses, but you've constructed a portfolio that completely ignores a lesson I’ve been preaching for decades: never bet against America. Let’s sit down, look at the underlying economics, and see if you’re building a lasting fortress or just a sandcastle on the shores of the Pacific.

When I look at your sector breakdown, I see you’ve backed the truck up on Technology, sitting at nearly 57% of your total pie. You own Taiwan Semiconductor at a hefty 13.8% and Samsung at 11.2%. Now, TSMC is one of the most spectacular businesses on earth—Berkshire bought a chunk of it a while back, but I ended up selling because I didn't like the geographic zip code. You, on the other hand, seem to love the zip code! In fact, your geographic exposure is 98.3% concentrated in the Asia-Pacific region. Holding some international stalwarts is fine, but ignoring the American economic tailwind entirely is a bold, and frankly unnecessary, risk.

I will give you credit where it's due: you understand competitive moats. Nearly 60% of your holdings rely on massive scale advantages. Businesses like Toyota, BHP, and Commonwealth Bank of Australia are giants that are very hard to topple. You’ve also got BYD in there at 5.3%—Charlie would be smiling down at you for that one.

However, we need to have a serious talk about your cash reserves. You are sitting on exactly 1.7% in cash. That isn't a reserve; that's just the lint in your pocket! I always say that cash is king only when you deploy it, but you don't even have any dry powder. Mr. Market is a manic-depressive fellow. Someday soon, he is going to offer you a wonderful business at a bargain-basement price, and with only 1.7% in cash, you won't be able to swing the bat. Idle money earns nothing, but zero flexibility costs you everything.

🚩 Zero Margin for Error (No Cash): Running a portfolio with 1.7% cash is like driving a car with no spare tire. When the market inevitably crashes, you’ll be forced to watch the bargains float by because you spent all your money when prices were high. You need a cash buffer.

🚩 Extreme Geographic Concentration: Having 98.3% of your wealth tied to one side of the globe exposes you massively to regional geopolitical tensions and localized economic slowdowns. Diversification is protection against ignorance, and ignoring the US and European markets entirely is a glaring blind spot.

🚩 Cyclical Tech Overload: With almost 57% of your portfolio in technology—specifically heavily weighted in semiconductor foundries and equipment makers like Tokyo Electron—you are heavily exposed to the boom-and-bust cycle of hardware. These are great companies, but they require massive capital expenditures just to stay in the game.

🚩 Speculating with SoftBank and Alibaba: You've got nearly 7% in what your own strategy breakdown rightly calls "Speculation." SoftBank (4.8%) is practically the antithesis of value investing; they chase shiny objects at premium prices and lack a durable moat. And Alibaba (2.1%)? Well, Charlie loved it, but even he eventually admitted that using leverage to buy it was one of his biggest unforced errors.

I’m giving this portfolio a 6 out of 10. You have a good eye for businesses with massive scale and real competitive advantages, but your portfolio construction is dangerously unbalanced and leaves you completely at the mercy of geopolitical winds with zero cash to save yourself.

Here is what I’d suggest you do tomorrow morning:

1. Build Your Dry Powder: Trim some of your top-heavy semiconductor positions and build that cash reserve up to at least 10-15%. You need cash to be greedy when others are fearful.

2. Bring Some Money Home: Introduce some high-quality, wide-moat North American businesses to your portfolio. The American economic machine is too powerful to ignore.

3. Ditch the Speculation: Sell off your "No Moat" holdings like SoftBank. A wonderful company at a fair price beats a speculative company at any price.

4. Respect Cyclicality: Understand that your heavy weighting in mining (BHP) and semiconductors will swing wildly with the global economy. Make sure you have the stomach—and the cash—to hold through the down cycles.

As I've said many times: Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble. Right now, you don't even have a thimble. Go find a bucket.