Yes, if you bought AXP when Buffett added to his position in 2015, you'd be in the red on those shares. Otoh, if you followed Buffett in when he began acquiring AXP (you'd have to be old enough to have done that), you'd still be well ahead with that stock if you held and even if you kept adding after Buffett's subsequent published buys.
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I keep adding to my positions in asset/fund managers, but I could be completely wrong. All -- or at least all of these companies that I am following - show declines in AUM. If it's the market falling, that's one thing. If it's a combo with a significant number of new people deciding they'll just manage their own assets via ETNs/ETFs/ index funds or cheap Vanguard-type funds --that could affect the business model of these publicly-held fund/asset managers. Also, if/as more people shift from equity funds to fixed-income funds, the value of these fund/asset manager stocks should drop because bond funds are much less profitable for these companies then equity funds.
My understanding is that, historically, these asset manager stocks rise with rise in the stock market, and fall with a falling stock market. So, I am essentially betting that the market will be better for stocks in future, and AUMs for these companies will increase, and their stock prices too. Also, that consolidation will help the sector too. (I note LM cutting costs/making acquisitions; AMG (in which I hold shares) known for its making many acquisitions.) |
