Buffett's Verdict: Ditch the Employer Stock and Build a Cash Moat

Well, hello there. I was just taking a look at your investments while enjoying my morning Cherry Coke, and I have to admit, you’ve given me a rather interesting mix to look at. My late partner, Charlie Munger, would probably take one glance at the sheer number of tiny positions in your brokerage accounts and mutter something about human folly, but I see a lot of good, rational thinking here, too.

You’ve clearly read a page or two from the Berkshire Hathaway playbook, but you’ve also let a few weeds grow in your garden. The true test of an investor isn't just what they buy, but what they have the discipline to ignore. Let’s look under the hood of these accounts—your tax-advantaged French PEA, your trade account, and your company plan—to see if we can’t build you a wider margin of safety for the decades ahead.

Let’s start with the most glaring number I see: you are operating with absolutely zero cash reserves. A big fat 0%. Now, I understand the desire to put every penny to work—cash doesn't produce anything, after all—but at Berkshire, we always keep a mountain of dry powder. Cash is like oxygen: you don’t notice it until you need it. By running on zero, you leave yourself completely at the mercy of Mr. Market. When he gets depressed and offers you wonderful businesses at clearance prices, you’ll have empty pockets.

On a brighter note, I’ve always said that for most folks, the best investment is a low-cost S&P 500 index fund, and I’m tickled to see your BNP Paribas S&P 500 ETF makes up a hefty 45.5% of your total holdings. That is a fantastic, steady anchor.

Looking at your broader allocation, your geographic exposure makes a lot of sense: about 62% in North America and 38% in Europe. You’re leaning on American economic engines while taking advantage of your local European champions. You also have a good eye for economic moats. I love seeing businesses with strong network effects like Mastercard and Alphabet, and companies with massive scale advantages like Amazon. With roughly three-quarters of your capital sitting in steady, core strategies and nearly a third in the technology sector, you’re riding the coattails of some very fine businesses.

For all the good sense you’ve shown, there are a few holes in your boat that we need to patch before the tide turns.

🚩 Employer Concentration Risk: Your company savings plan holds a massive 21.2% position in Sopra Steria Group (plus a little more in your PEA). Let me give you a piece of advice: never tie your financial capital to the same mast as your human capital. If your industry hits a tough stretch, you could face a double whammy—losing your job and watching a fifth of your net worth evaporate at the exact same time.

🚩 The "Noah's Ark" Strategy: You have a long tail of tiny positions that are doing nothing but creating paperwork. You’ve got 0.8% in LVMH, 0.7% in Airbus, 0.4% in Credit Agricole, and a downright baffling 0% stub in Ubisoft. As Charlie used to say, "Diversification is protection against ignorance." If you don't have the conviction to put at least 3-5% of your net worth into a single business, you have no business owning it. You are diworsifying.

🚩 Zero Margin for Opportunities: I'll say it again because it matters—running a 0% cash balance means you are playing a game with no timeouts. You need liquidity to take advantage of market panics.

I’ll give this portfolio a 7 out of 10. You are saved from a much lower score by your wonderful discipline in making the S&P 500 your core holding and buying high-quality businesses like Alphabet and Air Liquide.

To turn this into a compounding machine, here is my advice to you:

1. Build a Cash Cushion: Stop reinvesting every single dividend and paycheck for a few months until you build up a 5% to 10% cash reserve. Wait for the fat pitches.

2. Trim the Company Stock: Over time, gracefully reduce your 21% exposure to your employer. Roll those funds into your broad market ETFs to separate your paycheck from your portfolio.

3. Weed the Garden: Sell off that zoo of sub-1% European stocks. If LVMH or TotalEnergies are wonderful businesses—and they are—buy a meaningful stake. Otherwise, let your index funds own them for you.

Remember, investing is not a game where the guy with the 160 IQ beats the guy with the 130 IQ. It's about temperament. Keep your costs low, stick to your 20-year horizon, and let the great businesses do the heavy lifting for you.