“You could conclude this is another sell signal. This was a far higher level of selling activity than we were expecting”: Edward Jones Investments.
By Wolf Richter for WOLF STREET.
Q2 was the seventh quarter in a row during which Berkshire Hathaway, Warren Buffett’s investment vehicle, shed stocks on net, this time a net of $76 billion in stocks. The proceeds went into T-bills, which grew by $81 billion, a blistering pace for a three-month period – to get out of Dodge? The stock market turned south in mid-July
Cash is king.
During Q2 through June 30, Berkshire Hathaway piled on an additional $81 billion in T-bills, according to Berkshire’s Q2 earnings release on Saturday. Its T-bill holdings:
- Q2 2024: $235 billion
- Q1 2024: $153 billion
- Q4 2023: $130 billion
- Q1 2022: $67 billion, when interest rates began to rise,
If Berkshire earned an average of 5.3% on its T-bills in Q2, that would be about $3 billion in interest income with zero risk, accounting for roughly 8% of its pre-tax net income of $38 billion.
Total cash – so T-bills, cash, and cash equivalent – jumped by $88 billion during Q2, to $277 billion, up from $189 billion in Q1 2024, having now more than doubled since Q1 2023 ($130 billion).
Buffett had said at the shareholder meeting in May that it was “a fair assumption” that Berkshire’s total cash and T-bill pile would exceed $200 billion by the end of Q2, and that he was “quite satisfied” with that position. And that has come to pass by a wide margin – with cash and T-bills having ballooned to $277 billion. Cash is king.
Clearly, Buffett took risk off the table and locked in profits, and collected 5%-plus interest on his ballooning cash.
Ditching Stocks.
Berkshire dumped on a net basis $75 billion of stocks in Q2.
Apple holdings took a massive hit. Berkshire dumped nearly half (roughly 390 million shares) of its remaining Apple shares in Q2 after having dumped 13% (116 million shares) in Q1, and about 1% (10 million shares) in Q4. Berkshire’s Apple holdings are now down to about 400 million shares, from 908 million shares that it had held two years ago.
This Apple trade has been huge and hugely profitable for Berkshire. It first disclosed purchasing Apple in 2016 when the shares were in the $26-range, give or take. On Friday, Apple closed at $219.86 a share.
The super-hyped event that Buffett was buying Apple in large amounts and kept buying Apple, and kept praising Apple, was in part responsible for driving up the price of Apple shares not only through the actual buying pressure from Berkshire, but also through the media hype that came with it.
Ditching Bank of America. In July through August 1, reported in separate filings and not included in the Q2 quarterly report, Berkshire also sold 8.8% (or about $3.8 billion) of its Bank of America holdings in a series of transactions.
“You could conclude this is another sell signal,” Jim Shanahan, an analyst at Edward Jones who covers Berkshire, told Reuters. “This was a far higher level of selling activity than we were expecting.”
In terms of Berkshire’s overall stock holdings at the end of Q2, about 72% were concentrated in five stocks:
- Apple: $84.2 billion
- Bank of America: $41.1 billion
- American Express: $35.1 billion
- Coca-Cola: $25.5 billion
- Chevron: $18.6 billion.
Share buybacks grind down.
Berkshire repurchased just $345 million of its own shares in Q2, compared to share buybacks of $2.57 billion in Q1. Perhaps Buffett doesn’t deem the shares a good deal anymore, after they soared by 44% since the beginning of 2023.
Investment income drops, operating income rises.
Earnings from the companies that Berkshire owns (operating income) rose by 15% year-over-year to $11.6 billion, even as revenue inched up only 1% to $93.6 billion. Almost half of that profit came from its insurance empire, including GEICO, whose massive increases in premiums – what consumers have been complaining about for two years – and now reduced claims caused underwriting profits to more than triple!
But investment income, which is always volatile, fell by 28% in Q2 to $18.7 billion (from $25.9 billion a year ago). So net income fell by 15% year-over-year to $30.3 billion.
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It seems like the rug has become too lumpy to have anything else swept under it. Maybe all the overleveraged market is left with now is a trip hazard and a lot of dirt.
Back on the farm, everything is as usual, keep the cows fat, sell some milk and get by.
My neighbor was talking, she said she saw the Swenson kid smoking a cigarette around back of the church.
Berkshire has found the green grass of home is in t-bills..God bless the poor man’s soul.
I cant help but say…. I am seeing a lot of inconsistency from the oracle of Omaha.
Like how his favorite holding period is forever
Yes. Buffett followers love to say it’s impossible to time the market, so just dollar cost average into index funds and hold forever. But timing the market is exactly what he does. They seem to forget that he’s also known to say buy when there’s blood in the streets, sell when everyone else is greedy.
He bought GS hand over fist along with long-dated Spx calls in late 2008-early 2009, as I recall. And he’s selling now near what he apparently believes is a top.
To the extent he says don’t try to time the market, I think he’s saying: don’t try this at home kids, most people are terrible at it.
right of course if everybody bought and held, there would be no sellers. so obviously not everyone believes that
Warren actually said that short term the stock market is a voting machine in the long term a weighing machine. He just changed his vote because he read the scale
Buffet causes the scale to move.
He doesn’t have forever.
He’s at an age where buying green bananas is a risk.
Good metaphors. Well done.
Warren sees things, so he raises cash.
Between the corporate bond market bubble and CRE, this could be a double whammy bloodbath.
I see a Whammy Decathlon, not just a double whammy – in no particular order:
(1) Simultaneous popping of the Japanese bond and stock bubbles & collapse of carry trades.
(2) Yet another crypto crash has started
(3) Ongoing Chinese recession
(4) Topping out of major stock markets worldwide
(5) Disequilibrium of US, Australian and Canadian housing markets
(6) Quietly emerging recessions in Europe, US, Canada…
(7) Disruption of supply chains due to Cold War 2 ramping up further
(8) Inexperienced government policy responses due to major regime transitions worldwide over next 6-12 months
(9) U.S. corporate bond market and CRE bubble (good call)
(10) Upcoming fiscal/sovereign-debt crises in Japan, China, France, U.S….
Did I miss anything?
Housing bubble is also in UK, Europe, nz and probably anywhere else you happen to look.
Here in Canada we need a good real estate correction to makeup for the past 25 years of no real estate market correction that should happen every 7 to 10 years. We need a 59% drop or properties to be worth $500,000 or less. The real solution is not more stupid real estate taxes by this stupid Liberal, Trudeau government and its NDP, really communists to stay out of the way and stop manipulating real estate in the first place. Also, the Bank of Canada is a real BS group of individuals that for some reason can’t see past 5% on their bank rate for 17 years now. We need 10% minimum mortgage rates and minimum 20% downpayments to put this issue to rest.
Where is the Canadian Hamptons located?
Not on Vancouver Island I can tell you that.
Viva NDP! Viva Che!
The Buffet bubble, inflated pricing from Buffet owned companies like geico and kraft heinz.
YES,, you missed now clear ”climate change” challenges.
NO MATTER IF due to human influences or not,,, climate IS changing as has always been the case since any records have been made…
VVNv-triple check, something many in our modern world have difficulty in acknowledging is truly bigger than they are (and thus demanding thoughtful, and constant, adaptation)…best.
may we all find a better day.
VVV/Dustoff- Greetings and FTA!
Yeah. Be interesting to see how long the Southern deniers will say “this happens all the time.”
Wonder who will get the blame for rising (or refusal) insurance rates?
50/50 each on The Gov’t and the Devil is a good starting point for betting purposes. Maybe 10% CA Coastal liberals? Would make me feel more important, anyway.
Hear this time Hilton Head Island may really get hammered……sorry, but I never liked those people (although they most all have other homes). But they make most servants drive a long way, so hopefully they will be alright.
Somehow, the taxpayers will eat their losses, but maybe a few will get bad stress diseases…….Got to look at bright side
Wonder what trip wire was? Or should I take this reply personal?
Wow!!!! Reply is GONE. Well FTA, anyway.
It’s back, but still in moderation.
One more FTA for old times sake……or FTN, I think, for VVV.
They had just about finished Dong Tam for full “brown water navy” operations when I got there July 67, so I guess you were blue…..if you are “vintage”.
Anyway, agree bigger things than Buffet and $$$$s better get some attention SOON or at LEAST be factored in a LOT more.
Are V Vets just cranky about the whole thing STILL, or is it PTSD?
Germany and the most others of Europe
🍎 Apple has been growthless for years, and bank shares are under severe pressure. I’ll admit that I’m not envious of anyone in the insurance business, with the exception of their pricing power! Insurance, fees and taxes — things we’re forced to pay, even though we’d rather not! My gold and silver mining & royalty shares are on fire 🔥 this year.
Insurance companies are under huge financial stress and losing a lot of money these days and highly constrained against raising prices by state insurance commissions which is why a number are leaving the business with large numbers of cancellations.
“Insurance companies are under huge financial stress and losing a lot of money these days”
The article clearly stated the opposite:
“Almost half of that profit came from its insurance empire, including GEICO, whose massive increases in premiums – what consumers have been complaining about for two years – and now reduced claims caused underwriting profits to more than triple!”
from the article –
“Almost half of that profit came from its insurance empire, including GEICO, whose massive increases in premiums – what consumers have been complaining about for two years – and now reduced claims caused underwriting profits to more than triple!”
sounds like the “insurance” part of the “insurance business” is doing just fine.
I switched out of Geico a month ago when they were going to raise my car insurance to $225/mo from $160/mo. It was $100/mo in Jan 2021 to give you an idea. Now I’m back to under $100/mo with a different big name carrier although less coverage which is fine as my Geico policy was also for only 3k miles a year and insane to pay $1/mile. Geico’s profits off of me are now $0.
“Apple has been growthless for years”
According to Seeking Alpha:
Apple Sep 2019 Annual Revenue: 260B
Apple Sep 2023 Annual Revenue: 383B
Revenue up nearly 50% in 4 years. No reasonable person would consider that “growthless.” Comments with objective lies like yours should be deleted.
https://seekingalpha.com/symbol/AAPL/income-statement
I follow Fred Hickey on Apple. He stated (17 July 2023):
“Apple was growing at 33% back two years ago, then it fell to 8% last year, and last quarter, their revenue growth was negative 4%, and the guidance going forward is negative as well. We have negative growth, yet Apple has gone up 50% this year as the end markets have deteriorated significantly. There’s no great story here, it’s that Apple’s not very well placed in its product cycle. Their last big upgrade cycle was about three years ago, and the contracts are all but done. That was 5G. They have the iPhone 15 coming out in September, but it’s a nothing burger. They’ve run out of colors, so instead of just a red color, you can have a darker red color. They have minor improvements in processing speeds and a periscope for the highest end, but there’s really nothing there.”
Buffett has dumped half his Apple shares. I’m not alone in my negative view of Apple’s prospects.
At $1.35/ share in Q3 2024, AAPL has a P/E a little over 40:1.
Buffett has repeatedly said he loves Apple (and it’s prospects). He is selling simply because the price has gotten too high.
The value proposition isn’t there. He still loves the company and it’s future, just not at this price.
Buffett doesn’t “love” anything. It’s just a trade. Buy low, sell high.
Wolf,
Love wasn’t just my word, it was Buffett’s word. He has said many times that he loves the company due to the devotion of its users. He thinks it is a great company and a great business model.
His selling has nothing to do with the company, it is with the value if it’s stock.
Sure it was Buffett’s word. But he doesn’t love a stock or the company. It’s just a trade, buy low sell high. That’s what he does. Anything else is folksy hype.
Yeah. He cultivates that image being everyone’s loveable (but very smart) old financial grandpa.
Anon:
Net income hovering around $100 billion since 2021.
Depends on your definition of growth?
Revenue up on shrinking margins… increasing PE, P:Book, P:Sales?
Growing market cap on inflated USD?
There is no possible way to justify a 40:1 P/E ratio for AAPL.
Apple🍎fails on the old tech bubble standard of PEG. No wonder Mr Buffett is detoxifying Berkshire by massively unloading🍎shares.
I also follow Michael Oliver (MSA), who points out that the 2009-2024 stock bubble is the largest in history. Based on momentum, bonds failed in 2020 (they will bounce when stocks sell off), and stocks failed (again, in terms of momentum) in 2022.
Search “Oliver MSA” on YouTube for Michael’s many interviews,
Anon:
I don’t want you or anyone to be hurt by owning Apple shares at current levels. They are financial wizards, and masters at putting lipstick on the pig, but the company has seen its best days. Please be careful out there!
“the company has see its best days” Funny, that’s exactly what people were saying in 2001 when I bought $20K of Apple after a 50% drop. Still holding. Nobody can predict the future with certainty, but the enterprises with the biggest war chests, talent pools and customer bases are best positioned to make and/or profit from the future. Something will eventually disrupt the iPhone, but nothing on the horizon yet.
Anon, do your homework before posting your cherry picked data. Here are apples sales numbers for the last 5 years for similar ending periods….
Jun. 29, 2024 386B
Jul. 01, 2023 384B
Jun. 25, 2022 388B
Jun. 26, 2021 347B
Jun. 27, 2020 279B
So Apple has been growthless for years.
Thank you! The margin compression is also notable, as others have pointed out. I think we all know why Buffett sells. I’m a TV+ subscriber, but I would never be a shareholder given the company’s current circumstances.
Not for long with those commodities which are way overpriced and are in a huge unsupportable bubble.
SoCalBeachDude & Warren G. Harding:
I’ll second what both of you are saying!
Apple revenue $46 billion in 2009 and $381 billion in 2023.
There might just be an upper limit on revenue.
Classic pump and dump. My brother-in-law has an Iphone he also had Betamax. He’s always wrong.
Warren or you bro?
Buffet. Pump and Dump king.
Best to have money for anyone that operate like that. There’s other ways to make it work like only working for cash or not keeping a permanent address or any personal info for the courts or ex’s to track you down with but otherwise having a horde of baby mama’s can get expensive. Nobody has tried to serve me papers at my storage unit yet though, so there’s that in case it helps anybody to know.
A sixteen year hold is ‘pump and dump’?
For some help here is Wiki:
‘Pump and dump (P&D) is a form of securities fraud that involves artificially inflating the price of an owned stock through false and misleading positive statements (pump), in order to sell the cheaply purchased stock at a higher price (dump). Once the operators of the scheme “dump” (sell) their overvalued shares, the price falls and investors lose their money. This is most common with small-cap cryptocurrencies[1] and very small corporations/companies, i.e. “microcaps”.[2]
While fraudsters in the past relied on cold calls, the Internet now offers a cheaper and easier way of reaching large numbers of potential investors through spam email, investment research websites, social media, and misinformation.[2][3]’
Buffet is actually the opposite of even quasi-legal short term pumps where the only reason for buying is to quickly resell. Buffet always buys for the medium to long term. He is not only not a trader, he advises against trading.
His latest move out of many stocks including some of his original holding, Coca Cola, is just his seldom exercised strategy of avoiding risk even if it means giving up some gains.
Pump and dump can also refer to talking up a stock in public, while quietly liquidating the shares as quickly as possible.
If a CEO or board member of a company were doing so, it would be rightly called out by public investors. But when WB does it, he’s celebrated as being some paragon of wisdom and virtue.
was buffett telling people to buy apple? i don’t remember hearing that.
Franz: you don’t remember it because its made up BS
It was pretty clear that Mr Buffett was on the side of the financial engineers when he bought his $5 billion in preferred shares of Goldman in 2008 (I recall that he bought them around the bottom, which was $36 or so a share; his 43.5 million warrants were cashable above $115).
Of course, he lent his prestige to the name, but he was banking on the Fed to bail out the banking industry and the stock market. (I don’t blame him for playing the odds, but it wasn’t the free market which made his deal profitable).
@E V: Sounds like a cheap shot, but could it be instead a good contrarian call? Unsubstantiated? – check. Inflammatory language? – check. Character assassination? – check. Incorrect? – unclear, but not looking good so far. Falsehood? – the market is a voting machine, so time will tell.
Howdy Folks. Cash is always King for squirrels…..So Buffett and Bubba love 28 day T Bills????? YEA HAW
I’m happy for Bubba.
I guess it’s a matter of semantics, but I wouldn’t use the word “dump” to describe “intelligently took profits on” an investment. Apple made sense to buy at particular valuations, and to sell at another valuation.
I also would prefer a more pleasing word, maybe “blessed offering”
Maybe dump does make sense, he pulled over without warning and dumped his load, then drove off with a grin.
Actually I wonder if the company’s daily business dealings/decisions are left to others at this point, the geezer old.
Damn it man! Now I’m worried my exuberance from Friday was actually fallacious. I was really sure that I made a genius move by getting out of Treasuries and going all in on AB InBev. I’m gonna have to talk to ma’ boy Jerry about this and see what he thinks. He’s one of the best minds of the bunch down at the shelter and I’d hate to question his financial advisor and broker wisdom but Warren Buffet is pretty smart too. On the one hand, Jerry helped me make a fist full of cash off of our beloved Bud Light producer’s big boost in share prices. On the other hand, getting out of Treasuries when Mr. Buffet, the king of all you can eat, is getting out, might mean trouble’s a brewin’.
I’m getting nervous since I usually don’t usually catch Jerry until Tuesday soup nights, his favorite. I’m probably going to be sweating bullets tomorrow, especially because it’s still going to be over a hundred and it gets really hot in my storage unit with the sun blasting down.
On the plus side, there is some reassuring news in this article. Hearing that GEICO is sittin’ pretty with cash means I might not have to fight hard to get the money I worked hard for a few days ago. One of the cars I stepped out in front of at the intersection of Fifth & Main had GEICO insurance. Paperwork from the police report and talking to the driver makes this mark seem like a shoo-in compared to the other ones I stepped out in front of.
I’m gonna have a lot to think about in the next few days and weeks to figure out how to handle all this money that I might be having coming my way. Anybody who smart like my buddy Jerry or Warren Buffet on here that has any investment ideas, tips, strategies, or recommendations, I’m all ears and would appreciate any advice.
Lol
I though commend you on walking in front of well insured cars recommend you do not go public with said info.,your attorneys will thank me later!
You might be right. Actually, my attorney dropped me as a client today. After going over my case with him, I went down the street and bought a 40 oz of Old English. I stepped out in front of a few cars in my wanderings in the afternoon. Well by some kind of good or bad luck, I guess I caught my attorney on his way leaving the office on his drive home. The guy played a hard game when the cops came and I almost got arrested. On the plus side, the guy has a good income and if I sue him I might be able to get good money out of him. I just need to find an even better lawyer than him now to take my case. It’s been a busy past few days and I still gotta track down Jerry tomorrow. Man, I’m feeling beat. Thanks for the heads up Jimmy, I appreciate it.
In SF, the ambulance chaser ads now outnumber drug ads and are almost up to cars. That’s based on all 5-6 News Stations ad demographics….bit of mattress probably makes up the top ones, and of course GD insurance and new “banks”, or whatever they are. I have a dumb phone.
Still have beef with Wolf about ads being tax write-off like building or equipment.
How about a dollar limit?…then Wolf could do his thing?
All these fucking bright scientific HUGE AD AGENCY boys DRIVE this mindless consumerism and we still PAY for mostly shit content media.
that’s 5-6 pm broadcast news and a rough guess….
If I was still a Soc Major I’d keep score and use more $5 words.
Was 50 cent in early 70s, but inflation…..ya know
Does this mean Apple has peaked in tech ideas? Nothing new under the sun to be had? Perhaps an enema directionial AI device would not be popular?
Hell no it doesn’t Bruce Lee. Apple ran out of implementable new ideas 10 years ago and the stock still held value. Don’t assume stock prices indicate true true engineering and innovation prestige. It’s all a big gulp cup full of hype, and no free refills unfortunately.
Apple’s revenues were $381 billion in 2023.
This is his major move. Only time will tell if he is right. Looking forward to the verdict.
2008 seems like yesterday. Buffet will eventually pen his ” I’m buying American Again” editorial but not until can get 50-60% off or more. He doesn’t take the losses first though.
Looks like Japan is melting down again..
Buffett seems to think 5% risk free is a fairly good deal at market highs and it makes sense to me. I have some money taking the risk free 5% too and I would wager that a lot of other people do too. It will be interesting to see what happens when/if rates do drop. I don’t think I would be willing to sit on cash earning less than 4% and I bet other people have limits where they will rotate the cash to something else too. Where will it all move when/if that happens?
Buffett will probably sit on it until the market drops 25% and then try to find an elephant right?
Maybe cornering the silver market is one of the next objectives?
I suspect risk free short term 5% has about 5 months left at this point, not sure if pivot to longer term bonds is the move, but you probably won’t have 5% T bills by year end.
Warren from 2009:
“ “Beware the investment activity that produces applause,” Buffett wrote, “the great moves are usually greeted by yawns.”
From the same 2009 Reuters article:
“ Indeed, Buffett said that to fund new investments, he sold parts of some equity holdings he wanted to keep — among them, oil company ConocoPhillips , drug company Johnson & Johnson and consumer products company Procter & Gamble Co .”
I assume Uncle Warren is selling this 2024 junk today, and use that exact 2008 playbook sometime in the near future — perhaps after the Fed emergency rate cuts?
I further assume he’s not gonna watch his 3 month treasuries go down in value significantly — every money market account will be in the chopping block, so this is curious! What’s that old fool up to?
We were all making too much money. Now they turn off the Spigot 🚰.
Go to jail, do not pass go, do not collect 5%…
🙁
Yeah…..Buffet likes to appear sorta inscrutable while still leaving the impression of great wisdom.
Trump is ALL IN at that game, lacking much above a 6th grade education…on paper or socially.
How exactly does Buffett sell stock? I would assume this is some sort of private placement, perhaps at a discount to the public-market price.
Perhaps he’ll go all in on MSFT with his good friend Bill.
Send it over $1000 as his swan song. 🎶 🏆
Apple goes south, Microsoft launches an AI phone and tablet powered by OpenAI for the masses. $2000 with your local cell carrier! Lol
He calls up Goldman and tells them he wants to sell a huge block and they call around and find buyers and negotiate a price.
The Oracle of Omaha bailing on close to 50% of his Apple stake?
Hmmm,
Maybe Uncle Warren will buy more Japanese stocks after his 3 month treasuries drop 20%?
The Topix and Nikkei 225 Stock Average fell more than 7% in Monday morning trading in Tokyo, marking a significant three-day decline that surpasses anything seen since the Fukushima nuclear meltdown in 2011
How would a 3-month Treasury drop 20%??? Or was that a joke and I don’t get it?
The three month treasury is down 600 bps in a year and heading lower — I’ll let you do the math
Of course money mkt value and liquidity varies in various funds, but many are highly concentrated with 3 month treasuries.
Obviously many short term treasuries are on this chopping block and it will be a shock to peoples monthly income — including Uncle Warren and myself.
The only factual proof I have is my monthly money mkt statements
“The three month treasury is down 600 bps in a year and heading lower”
I stopped reading there, overload of idiotic ignorant bullshit. A three-month Treasury bill matures in three months. NO ONE can hold it for longer than three months because it will be redeemed on the maturity date in three months. If you bought a 3-month Treasury three months ago for $987, you’re getting paid face value of $1,000 (purchase price plus interest).
If you bought a 10-year Treasury note three months ago with three months left to maturity, it trades like a three-month Treasury bill, and it matures now, and you will be paid face value plus the last coupon interest payment.
Also in general, and by definition, when yields fall, price rise. Falling yields = profit for current bondholders if they sell.
I hold 3-month T-bills. You don’t know what F**K you’re talking about. Where do you pollute your brain with this idiotic bullshit??? Keep it off my site or stay off my site. Spread it on X
Wonder what made Musk become an even WORSE asshole all of a sudden?
The usual for filthy those rich bastards? The fine looking women all still want them badly, but they can’t hold up their end anymore….so to speak.
Yeah, just refer ANY BS to X….I like that technique.
Maybe he means when the yield drops 20%????
PM Monday update…. Wall Street and their shills are now crying for an emergency fed meeting to cut rates and bail them out of their losing trades
No, it’s all stupid bullshit because…
1. If the yield drops 20% and you sell, you get a HIGHER price and made money because bond prices rise when yields fall.
2. People who actually hold a security with 3 month left to run, such as a new 3-month T-bill or a 10-year note will NOT see the price go up much, or the yield fall much, if they want to sell, because in three months, the holders get face value plus interest, and the market knows that too.
It doesn’t really make sense to measure yield changes in percent up/down. When someone says “treasuries drop x%” it’s typically understood to mean they fell in value (yields went up).
But as Wolf points out, there’s no way 3 month Treasuries could drop by 20%. The pull to par is so strong with this kind of duration that even big interest rate changes don’t move the price too much. It’s not mathematcally possible.
Maybe Japanese stocks plunge because foreigners, such as Buffett, are dumping their holdings?
MW: US stock futures sink after a painful week on Wall Street
Japan’s Nikkei 225 index plunges 5% as global sell-offs resume
Check out bitcoin, -10% now, at $52K … Ethereum -15%, at $2.3K
Sadly still way overvalue….even at $3k it is still too much for fugazi money…
Weird how Bitcoin follows the market.
I thought it was supposed to be independent of old school financial markets.
I’ve always laughed at how Bitcoin gets ‘valued’ in Dollars, along with trading profits. :)
Seems a bit odd, for a world changing “currency”…
Bitcoin trades like a tech stoxk, fwiw.
Bitcoin trades like a tech stock, fwiw.
Japanese stocks don’t look quite so bad in $US Dollar terms. Maybe Buffet was considering exchange rates too when he made his Japanese investments. I cant imagine he didnt.
MW: Corporate profit growth is on pace for its best quarter since just before 2022’s inflation spell
When I hear Buffet doing this, couple of things come to mind…one being “Only when the tide goes out do you discover who’s been swimming naked” perhaps cashing piling now waiting for that moment to come. The other being, last time he shored up and made a nice bailout return. Maybe he is seeing that opportunity around the corner now.
Or perhaps he is truly getting senile and missing the last great bull, like how Dave Portnoy likes to say he is a wash up now back in 2020…
Portnoy? On a financial site.
lol, that guy is a joke.
The clown leader 🤡
Agree, king of clowns but sadly these are the type that gets to gloat the loudest recently for the last couple of years and embolden these types to claim he is a better investor than Buffet
How much apple does buffet own ? If this sale is a small percent of the total apple holding, then its not news. But certainly worth watching.
🤣 RTGDFA
At least read the first part of the headline.
This stuff just kills me
Warren Buffet has a good track record of selling near the top and
buying near the low. Buffet also said Bitcoin is Rat Poison Squared.
Been waiting a long time for the Market Excess from Ultra Low Rate, to be flushed out. Are we here ? Maybe, maybe not ?
Bear markets follow Bull markets that have gotten too exuberant.
Irrational Exuberance.
Of course, the Fed can return to Negative Rates, and watch the stock market SkyRocket again.
Interesting times we live in. If or when Iran develops a useable nuke, life might get a whole more interesting.
1929 – 1987 – 2000 – 2007….. Bear markets happen.
Each one screamed CAUTION !!!
Extreme over-valuation.
Extreme division of wealth
Many more reasons that escapes my memory.
The consequences of Ultra Low Interest Rates will be felt by all.
Especially those who relied on MARGIN…….ouch
The stock markets are finally delivering some real EXCITEMENT with both the Kospi in Korea and the Nikkei in Japan down more than 12% this lovely and fun-filled Monday morning!
AP: Japan’s Nikkei 225 index plunges nearly 13% as world markets tremble over risks to the US economy
AP: Taiwan’s Taiex crumbled, losing 7.4% as Taiwan Semiconductor Manufacturing Co., the world’s biggest chip maker, dropped 8%.
AP: “To put it mildly, the spike in volatility-of-volatility is a spectacle that underlines just how jittery markets have become,” Stephen Innes of SPI Asset Management said in a commentary. “The real question now looms: Can the typical market reflex to sell volatility or buy the market dip prevail over the deep-seated anxiety brought on by this sudden and sharp recession scare?”
The VIX, an index that measures how worried investors are about upcoming drops for the S&P 500, fell about 26% as of early Monday. Bitcoin which recently had surged to nearly $70,000, was down 14% at $54,155.00.
The Kospi is Japan and closed down 11.5%. The Korean index also fell very sharply with Samsung down 7.7% and chip vendors pushing AI got absolutely slammed today.
And the Fed won’t cut in Sept, right?
Seen it way too many times in the last 5 years, whenever there’s a major down, it always shot back up to new high not soon after. Just look at after 2018, 2022 and now. I do wish this time is different and this is the start to revert back to fundamentals so when Tbill eventually get back down to TINA environment again, people that have been prudent and not buy into this overvalued market can get back in when those P/E or PEG make more sense…but I am not holding my breath this is the case. Very likely couple of hours from now when market opens, it will shoot way back up from last week’s over selling.
And if this is indeed a new paradigm shift, then please please let the housing market follow the same path at a faster pace than usual.
I know my friends who have seen their portfolios recover and move on to new ATHs after 2009 and 2020, and 2022 have no intention of selling. Some sold in 2009 at the lows and vow not to make that mistake again.
They got a little nervous in 2020 and 2022, but the FED seems to know how to turn the dials and will get the market back on track.
I offer only this … The Federal Reserve is NOT the Market. Never was Never will be.
The WORLD Market is what a willing Buyer will pay to a willing Seller.. The strike price is the market and it can move in seconds.
To think that the Federal reserve has any control, is to assume a Drunk driver is ok to drive the Nürburgring at high speed in a Porsche.
High speed Trading will see you crash just as surely
LOL Don’t tell the FED that. I went to their site and pulled up the following list of programs. Some of the programs were given the names nicknames QE1, QE2, QE3, QE4. If I recall, Ben Bernake claims he saved the US economy. I might add, the FED will do whatever it takes to avoid deflation. Lots of debt in a deflationary environment is very very bad. Especially when there is 310 Trillion of global debt.
-Current policy tools:
-Open Market Operations
-Discount Window
-Reserve Requirements
-Interest on Reserve Balances
-Overnight Reverse Repurchase Agreement Facility
-Term Deposit Facility
-Central Bank Liquidity Swaps
-Foreign and International Monetary Authorities (FIMA) RepoFacility
-Standing Overnight Repurchase Agreement Facility
Here are 14 expired policy tools that were mostly started around 2009/2010
-Commercial Paper Funding Facility
-Primary Dealer Credit Facility
-Money Market Mutual Fund Liquidity Facility
-Primary Market Corporate Credit Facility
-Secondary Market Corporate Credit Facility
-Term Asset-Backed Securities Loan Facility
-Paycheck Protection Program Liquidity Facility
-Municipal Liquidity Facility
-Main Street Lending Program
-Money Market Investor Funding Facility
-ABCP MMMF Liquidity Facility
-Term Securities Lending Facility
-Term Auction Facility
-Maturity Extension Program and Reinvestment Policy
The FED is always turning the financial engineering knobs. Most likely they are bailing out a hedgefund or a bank today.
Folks who sold in 2007 didn’t sell in 2009. It is 2007 again.
correct, that’s why stocks have been so resilient. because everyone and their brother is convinced that the fed will ride to the rescue and have the ability to do so. no reason to ever sell, within 1-2 years, stocks will be at all time highs again.
watch the panic if the indexes drop by 20-30% and the fed doesn’t come in like the white knight.
i don’t think the fed can save everything without causing massive inflation and thus it won’t have the political cover to do so like it did from 2009-2022. think of those years as failed experiments, not a roadmap for the future.
The Federal Reserve has nothing whatsoever to do with the stock markets and they are now vastly overvalued speculative bubbles that need to fall by around 90% to get back to reasonable levels which a number of non-index stocks have already done.
I have similar view too. We have seen this drama too many times in last 3 years. What we want to see now how Fed will react. Paid Media already started asking for 50BP cut. 4.3 Unemployment rate is low compared to historical numbers. That too when DOL/Census haven’t considered 6M immigrants.
FED always came to Rescue with ZIRP. FED shoudn’t go all out again to help Markets. We still have inflation around 2.6 and now base case effects will go away from this month. FED should stay the course.
Mag 7 went crazy in last 18 months. Just look at numbers from Jan 2024. From 11T to almost 17T.
Apple almost 35% from April 2024 to July 2024. No wonder WB is GOAT of Investment. Dude knows when to sell crap before everyone know it’s crap.
Those ATH Stock and Home prices don’t need any protection. Let them get corrected based on Fundamentals.
Oh you know those rates are going to the floor.
Rome is burning! 🔥
Nope. Just a rather small correction which is normal.
It feels like something in the world economy broke over the weekend
Yes, speculation
Commonly known as Gambling.
Wile E. Coyote finally looked down…
The sky is falling! The sky is falling!
Nothing changed at all economically over the past week.
Yeah, 4 aircraft carriers are headed to mid east. War is the most profitable business in history. A decision has been made and the outcome is not guaranteed
They are getting pretty good at these controlled proxy wars. My Uncle and all his pals would have been proud.
VtI – …or mebbe the broke (-) key on the calculator started working again?
may we all find a better day.
Buffet has been tracking my deals for some time now I think, and he agreed that cash is king for a while. I don’t follow his deals though, because his purchases are peculiar to me, his top 5 portfolio is not one that is attractive. His IT purchases were very late and reluctant, including Apple. I admit though that he is slightly richer than I, by a factor of millions. Insurance companies should be looked at as stock market investment trusts and they move in parallel with the markets. Reported profits are a carefully smoothed mix of policy income, reserves movements and stock market trades and profits, together with fixed interest income.
‘His IT purchases were very late and reluctant, including Apple.’
He started sixteen years ago at under 30 bucks a share
Nice write up wolf!
Japan stock market is melting right now.
I’m gonna bogle ride this sucker! Do nothing.
Hopefully we’re recovered in 6 months. And buy on discount baby!
I doubt any one will read this Butat time of posting the VIX went from 14 to 43.
That will loosen the bowels of a constipated trader any day.
It appears to be on like Donkey Kong
The world has been enabled by fiat to saturate itself in debt. All the countries. ALL.
Clearly Buffett (an ironic name really considering he is a miser) thinks the wheels are coming off. Think Chicago pension fund. Japanese government debt (in fact they are ok imo). France. Italy. The EU basically.
No mention of the Minsky moment on this page tsk tsk.
It looks like Berkshire is merely a tax-inefficient way to own large cap stocks…
Looks like you don’t understand the power of float.
of all the pieces of garbage out there in the financial media, jeremy siegel from wharton might be a winner.
he’s saying that the fed needs to cut rates by 75 bps and then 75 bps more in september, at a minimum. as evidence, he’s saying that the unemployment rate of 4.2% was blown through, and that inflation is 90% to 2% target. never mind the 20% extra from the past 4 years.
and he’s saying the markets will welcome the cuts and rip higher, and that that’s a good reason to do it.
to these people, bubble asset prices are all that matters. nothing else. not societal stability, not housing prices, not inflation, just asset prices.
Seems to be a lot of jealousy and envy in the remarks today regarding Berkshire. You can be a partner of Warren Buffett if you choose. Just buy some of Berkshire stock. I did about 50 years ago and it seems to be doing okay.
One of the hardest things to do in investing is knowing when to sell. You never hit the exact top and being early is excruciating, since those holding out for the last dollar gloat and criticize you – until markets turn and vindicate you.
My theory is simple … If you’re not early, you’re late.
I’ll repeat it again. Maybe I’m right on time this time. And yes I’ve been saying it since last year. We’re gonna have a recession very soon. At least I’m out before the mad rush to the exits.
Or, as attributed to Buffet:
— “It wasn’t raining when Noah built the ark.”
Very interesting. I hope Warren sold his JPN.
Such a nice panic! :)
now bisbee has come out saying that the fed will “fix” the economy if it deteriorates.
obviously the fed’s job is to react to conditions, which they failed at miserably in 2020 and 2021, but the pure hubris of these people to think they can “fix” any problem.
they’re like cancer doctors who promise they can cure any tumor. not that they’ll do their best, but they’ll fix all recessions and economies.
still plenty of dip buyers jumping in to buy nvda and other stuff.
this isn’t the turning point. when that happens, the dip buyers will be gone.
// still plenty of dip buyers jumping in to buy nvda and other stuff.//
Sure, let the dip buyers get in. It gives everyone an excellent opportunity to put NVDA again in future. Be fearful when others are greedy.
FG – financial Laetrile?
may we all find a better day.
Hmm, why gold is down?
Why wouldn’t it be down?
Someone needs to tell AMD to go down, not up. Are they reading the news?
AMD is up today but has plunged by 35% since March 7.
Margin calls are most likely causing major panic….
It would be super ironic if Warren betting now against America, and his AAPL sells triggers JPN collapse (that he likely is still holding). But America quickly recovers. Be back in a week.
Woke up to some interesting action…will be interesting to see how this day will end and if PPT will come back from vacation soon or bar hopping soon to do a last min market close recovery SOP….
Still funny MSM is rolling and screaming on the floor like we just had 1929 over last 2-3 days when market really just took a breather. It’s hardly even crash or correction when MA is still at $448, NVDA still close to $100 and monopoly play digital money still at $54K. I guess every investing genius has gotten so greedy the last year, they forgot they are still way up, especially within Mag 7 when compare to 2022 low..lol
Howdy Folks. ” What goes UP must come DOWN “?????
Unless you are a Squirrel. Your savings will always go up no matter what.
Buffet had just under a billion of about 15 billion AAPL shares. Daily volume is about 55 million (lately). He could sell the entire stake slowly but surely in a month on the open market. NBD
Now the comedy I have seen this AM, beyond “emergency” Fed meeting where the mongers are demanding a 50(0)? Bps cut include:
(From some silly coinRag I have never read, and never will again after these two BS remarks)
“The Fed saved the housing market with rate cuts in 2007.” HUH?
AND: “Another analyst (NONAME) stated that Fed cuts are bullish for equity markets.”
All to say, I suppose it depends on timing and perspective. Buffet’s favorite holding period (for you) is “forever,” until he sells.
I can also firmly state: Great Depressions are bullish for US markets as they have appreciated a bajillion in just under 100 years since the last depression. And other funny stories, brought to you by Liars Inc.
“The sky is falling” and meanwhile High-yield spreads have gone all the way from 3 to 3.75% in a couple weeks. They were around 5% in July 2022.
When they get above that, the bond market is serious.
Mon, Aug 5, 2024, 10:21 AM EDT
It’s an exclusive club, and you’re not in it.
(Bloomberg) — Charles Schwab Corp. and other retail brokerage users reported outages as a global stocks selloff surged when trading in the US market opened on Monday.
More than 14,000 users reported an outage at Schwab at 9:50 a.m. in New York, according to the website Downdetector. The firm didn’t immediately respond to a request for comment, but a company account posted on the social media platform X said that some clients “may have difficulty logging in to Schwab platforms.”
“Please accept our apologies as our teams work to resolve the issue as quickly as possible,” the firm said, without confirming the size or scope of the outage. Schwab had 35.6 million active brokerage accounts as of as of June, according to its second-quarter report.
The global market was roiled over the weekend following Friday’s lackluster US jobs report and the most significant crash of Japanese equities in more than a decade.
The website Downdetector also reported issues at Fidelity Investments, which the firm separately acknowledged in an X post. Fidelity didn’t immediately respond to a request for comment.
This is going to be hilarious……
The market is screaming rate cuts…..hundreds of emergency rate cuts now….while the PSI and ISM come out and state the economy is growing just fine thank you……
Politics vs real economy……who wins……
It’s the new America that without yellow rocks to control the demons has no brake. Hopefully the crack pots in the Eccles don’t listen to the madness until it’s warranted……but I would not bet on it…..remember The Alamo…..I mean The Transitory.
Sold another third of my NVDA today. At only a 120% gain. Still it would take 25 years of 5% on Tbills to get that. Holding some cash to see how far the market drops. This is the first market panic since SVB, and we’ll see how far the Fed lets markets sell off before coming to the rescue. Everyone is waiting for the afternoon close today to see how much forced margin selling there is.
The Fed hiked after SVB and continued with QT.
Some very important and fundamental re-writing of the rulebook may also have occurred which helped assuage the concerns of the “market”.
True, but the Fed balance sheet increased $300 billion. From Reuters March 16, 2023: “The need to extend $300 billion in emergency credit for the banking system this week has cut in half the progress the Fed had made in reducing its balance sheet since June.” This stopped the market drop of 4.5% the week of 3/10/2023 and commenced the rally, that continued until last week.
In the chart below, see that liquidity support for the banks during March/April 2023? Barely a blip … since the end of QE in April 2022, the Fed has reduced its balance sheet by $1.78 trillion.
The Fed has always provided liquidity support to the banks — “lender of last resort” to the banks is one of its primary roles. Over the decades, it used both, its old tools (such as Discount Window lending and repos), and new tools that it came up with specifically for each banking crisis, including the BTFP. There is nothing new about that.
What was new was that the FDIC bailed out uninsured depositors, and the Fed provided temporary funding to the FDIC to do that (the FDIC has now sold those assets it took over and paid back the Fed’s loan). That’s the only thing that was new.
https://wolfstreet.com/2024/07/05/fed-balance-sheet-qt-34-billion-in-june-1-74-trillion-from-peak-to-7-22-trillion-lowest-since-november-2020/
Buffet (and Berkshire) own more T-bills than the Fed…….. just sayin
Just looking at an ad for Master of Science in Business Analytics at UC Davis. Considered a STEM course. Google thinks highly of me!
Also had ad for best of 4 common calibers.
I’ve been to sites relevant to both.