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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.
Japan Govt debt may be 150% of GDP but what counts is how much of it is owned by the Japanese, especially its own central bank.
I thought the following was interesting:
“OTHER VOICES. Jenny JOHNSON, President & CEO of Franklin Templeton. AI hype will come to an end and a period of pessimism will follow. Such up and down cycles are normal for new technologies. Early and fast adopters may not be the eventual leaders. The profitless AI capex has to be digested. Look for AI beneficiaries in enterprise software, data analytics, customer service, finance, healthcare, collaborative work, picks and shovels (chipmakers, cloud hosts, data centers).”
How did Franklin growth or value funds perform during 2023 and 2024, the current AI boom period. Just checking if her comments were colored by the performance of her funds.
I used to think business leaders are intellectually honest (I know I was naive). The latest one that killed my optimism about that breed is Howard Lutnick. He had his strategists parade for two years telling us how the economy is going to be bad and that the stock market was about to crash / correct. It turned out he was a Trump bum licker and massively politically biased. I feel sorry for all the opportunity cost he caused for investors who listened to him and his minions who of course will benefit either way.
Why is Trump still in campaign mode? Does he not know he already won the election? He would not understand currencies in 100 life times like Scott Bessent does and so why does he need to talk about currencies when he has Scott Bessent to talk? Now, he is insulting US citizens’ grasp of economics and trade. May be he is trying to distract us from something else - cabinet picks? What else am I missing?
I expect a lot of stock market volatility for the next four years with this type of flame thrower mentality. May be time to cash in some chips from the steady two year gains and build extra dry powder.
@BaluBalu. Makes sense to take some profit off the table. No one ever went broke, taking profits. I do think that some industries will benefit more than others while the Orange Criminal reigns: energy, in particular. Regulations will be ignored or rolled back. Timber/lumber? Natural resources like that will become a party-a-go-go as limits on harvesting will be removed.
A few more Repugnants will have to grow a spine to prevent wholesale nutso behavior in the new Administration. Watch Collins of Maine and Murkowski of Alaska. Will they take hold of any visible leadership? McConnell will be a back-bencher. He can't even spell the word, "s-p-i-n-e." But you don't need to be in official leadership in order to exert influence, for sure.
@BaluBalu. Makes sense to take some profit off the table. No one ever went broke, taking profits. I do think that some industries will benefit more than others while the Orange Criminal reigns: energy, in particular. Regulations will be ignored or rolled back. Timber/lumber? Natural resources like that will become a party-a-go-go as limits on harvesting will be removed.
The impact for various industries may be difficult to predict. For example, the following outcomes seem counterintuitive. Energy stocks performed better under Biden than Trump, and conversely, clean energy stocks performed better under Trump than Biden.
BaluBalu said: I expect a lot of stock market volatility for the next four years with this type of flame thrower mentality. May be time to cash in some chips from the steady two year gains and build extra dry powder.
If inflation go up instead of treading downward due to Trump proposed tariff, all bets are off. We may see fewer rate cuts or the rate goes back up in the worst scenario.
From the linked article @Observant1: "...To start, the parts of the argument do not sum. States Morningstar Senior US Economist Preston Caldwell, “People simply assume Trump can be good for energy stocks while reducing oil prices. But if oil prices fall, then the net effect on earnings of US energy stocks is likely to be negative.”
Yes, I was sloppy with my prognostication, I suppose. What I had in mind especially were outfits like EPD or Energy Transfer ET; they are midstream, less affected directly by oil price. ET uses fee-based, preferably interm to longer term contracts to get paid for what it does.
Dec. 9, 2024 Barron's notes from yogi's own page: Pg 21. Dying INTESTATE (i.e. without a Will or trust) is the worst thing that can happen. Beware that in that case, there is a default state probate Will that applies, and the matters will be handled at your expense. Without the common estate tools, the assets and the care of minors, disabled dependents and pets are in limbo until the probate court can sort things out. Yet, many people including celebrities (Prince) and billionaires (Howard Hughes) have died intestate. After a person dies and the death certificate is filed with the county clerk’s office, the formal process of probate can begin. Remember that jointly held assets, accounts with beneficiaries (IRAs, 401k/403b, insurance), and assets titled into trusts (including POD/TOD) aren’t subject to probate. DIY may work for small and simple estates but use local estate attorneys for Wills and trusts – many estate laws vary by states, so don’t rely on some national estate expert.
I can confirm that state by state, there are quite a few differences. Wife and I have prioritized getting a Will/Trust done.
Japan Govt debt may be 150% of GDP but what counts is how much of it is owned by the Japanese, especially its own central bank.
I thought the following was interesting:
“OTHER VOICES. Jenny JOHNSON, President & CEO of Franklin Templeton. AI hype will come to an end and a period of pessimism will follow. Such up and down cycles are normal for new technologies. Early and fast adopters may not be the eventual leaders. The profitless AI capex has to be digested. Look for AI beneficiaries in enterprise software, data analytics, customer service, finance, healthcare, collaborative work, picks and shovels (chipmakers, cloud hosts, data centers).”
How did Franklin growth or value funds perform during 2023 and 2024, the current AI boom period. Just checking if her comments were colored by the performance of her funds.
I used to think business leaders are intellectually honest (I know I was naive). The latest one that killed my optimism about that breed is Howard Lutnick. He had his strategists parade for two years telling us how the economy is going to be bad and that the stock market was about to crash / correct. It turned out he was a Trump bum licker and massively politically biased. I feel sorry for all the opportunity cost he caused for investors who listened to him and his minions who of course will benefit either way.
If you ever felt Howard Lutnick’s qualifications were deficient to become Commerce Sec, you were missing this piece of info -
shakin' my head in disgust. Trump's criminal tong, including himself.
Pres. Lincoln felt compelled to exercise some judgment and restraint, however: "'Have you seen Mr. Stanton?'
"We told him yes, that he had refused us. He (Mr. Lincoln) then said:
"'Gentlemen, this is Mr. Stanton's business; I cannot interfere with him; he attends to all these matters and I am sorry I cannot help you.'
"He saw that we were disappointed, and did his best to revive our spirits. He succeeded well with my father, who was a Lincoln man, and who was a staunch Republican.
"Mr. Lincoln then said:
"'Now, gentlemen, I will tell you, what it is; I have thousands of applications like this every day, but we cannot satisfy all for this reason, that these positions are like office seekers--there are too many pigs for the teats.'
"The ladies who were listening to the conversation placed their handkerchiefs to their faces and turned away. But the joke of 'Old Abe' put us all in a good humor. We then left the presence of the greatest and most just man who ever lived to fill the Presidential chair.'" https://www.aboutabrahamlincoln.com/anecdotes/anecdotes_too_many.html
Do we have single words to describe people who have $10M and $100M? These days $1M is too little and $1B is still too large. A millionaire is a trivial word now and a billionaire is still not that common.
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?
I thought the following was interesting:
“OTHER VOICES. Jenny JOHNSON, President & CEO of Franklin Templeton. AI hype will come to an end and a period of pessimism will follow. Such up and down cycles are normal for new technologies. Early and fast adopters may not be the eventual leaders. The profitless AI capex has to be digested. Look for AI beneficiaries in enterprise software, data analytics, customer service, finance, healthcare, collaborative work, picks and shovels (chipmakers, cloud hosts, data centers).”
How did Franklin growth or value funds perform during 2023 and 2024, the current AI boom period. Just checking if her comments were colored by the performance of her funds.
I used to think business leaders are intellectually honest (I know I was naive). The latest one that killed my optimism about that breed is Howard Lutnick. He had his strategists parade for two years telling us how the economy is going to be bad and that the stock market was about to crash / correct. It turned out he was a Trump bum licker and massively politically biased. I feel sorry for all the opportunity cost he caused for investors who listened to him and his minions who of course will benefit either way.
Why is Trump still in campaign mode? Does he not know he already won the election? He would not understand currencies in 100 life times like Scott Bessent does and so why does he need to talk about currencies when he has Scott Bessent to talk? Now, he is insulting US citizens’ grasp of economics and trade. May be he is trying to distract us from something else - cabinet picks? What else am I missing?
I expect a lot of stock market volatility for the next four years with this type of flame thrower mentality. May be time to cash in some chips from the steady two year gains and build extra dry powder.
A few more Repugnants will have to grow a spine to prevent wholesale nutso behavior in the new Administration. Watch Collins of Maine and Murkowski of Alaska. Will they take hold of any visible leadership? McConnell will be a back-bencher. He can't even spell the word, "s-p-i-n-e." But you don't need to be in official leadership in order to exert influence, for sure.
For example, the following outcomes seem counterintuitive.
Energy stocks performed better under Biden than Trump,
and conversely, clean energy stocks performed better under Trump than Biden.
Why Oil and Energy Stocks Are Confounding Political Expectations
"...To start, the parts of the argument do not sum. States Morningstar Senior US Economist Preston Caldwell, “People simply assume Trump can be good for energy stocks while reducing oil prices. But if oil prices fall, then the net effect on earnings of US energy stocks is likely to be negative.”
Yes, I was sloppy with my prognostication, I suppose. What I had in mind especially were outfits like EPD or Energy Transfer ET; they are midstream, less affected directly by oil price. ET uses fee-based, preferably interm to longer term contracts to get paid for what it does.
Pg 21. Dying INTESTATE (i.e. without a Will or trust) is the worst thing that can happen. Beware that in that case, there is a default state probate Will that applies, and the matters will be handled at your expense. Without the common estate tools, the assets and the care of minors, disabled dependents and pets are in limbo until the probate court can sort things out. Yet, many people including celebrities (Prince) and billionaires (Howard Hughes) have died intestate. After a person dies and the death certificate is filed with the county clerk’s office, the formal process of probate can begin. Remember that jointly held assets, accounts with beneficiaries (IRAs, 401k/403b, insurance), and assets titled into trusts (including POD/TOD) aren’t subject to probate. DIY may work for small and simple estates but use local estate attorneys for Wills and trusts – many estate laws vary by states, so don’t rely on some national estate expert.
I can confirm that state by state, there are quite a few differences. Wife and I have prioritized getting a Will/Trust done.
https://www.ft.com/content/73ef7b34-3969-4466-993e-0d1d24ef434a
Pres. Lincoln felt compelled to exercise some judgment and restraint, however:
"'Have you seen Mr. Stanton?'
"We told him yes, that he had refused us. He (Mr. Lincoln) then said:
"'Gentlemen, this is Mr. Stanton's business; I cannot interfere with him; he attends to all these matters and I am sorry I cannot help you.'
"He saw that we were disappointed, and did his best to revive our spirits. He succeeded well with my father, who was a Lincoln man, and who was a staunch Republican.
"Mr. Lincoln then said:
"'Now, gentlemen, I will tell you, what it is; I have thousands of applications like this every day, but we cannot satisfy all for this reason, that these positions are like office seekers--there are too many pigs for the teats.'
"The ladies who were listening to the conversation placed their handkerchiefs to their faces and turned away. But the joke of 'Old Abe' put us all in a good humor. We then left the presence of the greatest and most just man who ever lived to fill the Presidential chair.'"
https://www.aboutabrahamlincoln.com/anecdotes/anecdotes_too_many.html