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Thanks for the reminder. Interesting take on Warren Buffet’s recent move.
Pg 18. Berkshire Hathaway (fwd P/E 23.4; P/B 1.6; P/E 19 on look-through earnings; WB owns/controls 14%). Stocks are rallying, but Warren Buffett (96) keeps selling, leaving billions on the table. His recent sales seem to be poorly timed. He has almost stopped buybacks. The cash (mostly T-Bills) is now $311 billion (31.1% of market-cap). BRK stock has done well (+28% YTD, and another near-trillion-dollar company) and its operational businesses will benefit from the economic boom. WB has been waiting for an elephant-size acquisition for years, but that $311 billion may just become a nice parting gift from WB to the next CEO, likely Greg Abel (62). A huge uncertainty is what the post-Buffett BRK will look like?
Is WB seeing something that we are not seeing in coming years? After all, he is 96 years old.
Berkshire off loading actions are the opposite of Yardeni who is super bullish. Is anybody hedging? What instruments are you utilizing? I'm leaning towards adding more to the LS/market neutral funds I have.
If you can call it hedging I'm just adding to my cash pile any dividends or distributions I get. I did use. some of it to add to ABBV this morning on the drop.
High SKEW of 150 means that puts are more expensive now relative to calls. And that's because lots of people & institutions are buying puts for hedging.
I still have to read this week summaries but I am hoping some of Friday’s market draw down has to do with option expiration. All those that decreased equity and supplemented with call options going into elections. Mid week SKEW decreased.
Comments
What I saw of him on TV at last meeting he looks pretty good for 94
Notwithstanding Yardeni bullishness, Berkshire cash position exceeding equity position is a huge warning sign plus reduced buybacks.
I still have to read this week summaries but I am hoping some of Friday’s market draw down has to do with option expiration. All those that decreased equity and supplemented with call options going into elections. Mid week SKEW decreased.
This thread automatically came up as read for me when I had not read @Crash’s post. Is there a solution to this unintended MFO Discussions feature?