Posted on 05/19/2020 12:57:12 PM PDT by MeneMeneTekelUpharsin
Berkshire Hathaway trading at low of the day after market was up over 900 points yesterday. Wonder what the big boys know that we don't know?
The most unfailingly mindblowing aspect is that while it may appear that a news event, in this case, the "bloom off the rose of the MRNA potential-vaccine" is "the cause" of the violent reaction... it isn't. The market was glaringly ready for a selloff BEFORE any of this CV-10 news came out and had started to weaken in its subtle way. THEN we got the CV news and the already-in-progress selloff took off like a hand grenade.
After all: The market got +90 points from the first GILD vaccine announcement....which turned out to false. It got about +50 points from the SECOND GILD announcement...which turned out to be false. And yesterday got +90 points out the MRNA announcement. How much has the market given back post GILD #1 and #2? Nothing. How much after MRNA? -30/90 points.
I am not a trader, but off the top of my head, it looks like a lot of his holding may have long term problems due to COVID.
He owns a lot of bank and financial stocks — which will see a lot of bankruptcy loan defaults. (Visa is probably ok, but the banks who issued the cards are on the hook for the losses.) Store capital is REIT for shopping centers who aren’t paying rent.
Sirius XM is going to have a lot of competition when Musk’s Starlink goes live. General Motors doesn’t look too healthy. Plus he owns retail and restaurant brands, some may never recover.
Maybe traders are cranky Berkshire didn’t capitalize on the down markets and buy quality when everything was down. He is still sitting on piles of cash. And the value of cash is going to plummet thanks to the printing presses going at warp speed.
https://www.cnbc.com/berkshire-hathaway-portfolio/
I do know the feds are doing what they can to pump up the stock market. Maybe a bit of cashing in for repositioning purposes.
Buffett has lost his touch. He is selling when he should be buying, and dumping stocks at the bottom. He used to know how to trade against the market, and make lots of money doing so.
He’s invested heavily in trains that transport things like coal and oil? And other goods that are not flowing freely through our country at the moment.
Yesterday was an overreaction.
Buffett really doesn't like to split shares, does he?
Yes but it was glorious while it lasted.
Value stocks got hammered today and have not been doing well in general. I own some for the dividend, around 3.5% on average.
Airline investment and political bias clouding the once clear oracle of Omah.
Warren Buffet?
https://www.fool.com/investing/2020/05/19/warren-buffett-just-dumped-goldman-sachs-heres-why.aspx
Since Berkshire H is a conglomerate holding company it is better to look at who “owns” a “share” valued that reduced amount. The “loss” is 1.60% of the value of one share of BRK.A. Currently valued at $258,700 per share.
Representing the portfolio of wholly owned companies (and high % owned others): GEICO, Duracell, Dairy Queen, BNSF(Burlington Northern Railroads-and 40% of Amtrak railway use), Lubrizol, Fruit of the Loom, Helzberg Diamonds, Long & Foster, FlightSafety International, Pampered Chef, Forest River & NetJets (100%), 38.6% of Pilot Flying J &Kraft Heinz Company (26.7%), American Express (17.6%), Wells Fargo (9.9%), Coca-Cola Company (9.32%),Bank of America (6.8%), Apple (5.22%). The less than 100% owned are not in BRK.A (last i checked).
Sort of like looking up Roche— the Swiss owned family owned mega firm. In the case of Roche one can only buy, in the US, U.S.-dollar denominated American Depositary Receipt (“ADR”) on the OTCQX International Exchange. Not on the SIX Swiss exchange. Many years ago (20) 1 ADR for Roche traded at 85K USD per “share”.
Shulan city and Jilin Province in China just got shut down over 3 dozen Covids cases(probably a lot more) and that province has 100 million people in it. It sits to the North East of Beijing on North Korea’s northern border.
It may be spooking some in the markets.
People may be using the CARES act and pulling moneys early from their 401k’s.
He’s old...may not care anymore. Might be dementia creeping up on him.
My point and you are exactly right. The BRK.A portfolio of wholly owned companies in the conglomerate is the key to the traded value.
Owners of BRK.A? who knows but would be willing to bet large insurers, and extreme wealthy individuals and conglomerates themselves.
Why am I tempted to watch “The Big Short” — in re: the mortgages that Wells Fargo is exposed on.. still, since TARP, when they were forced to bail out paper they did not own— because Paulson said so, back then.
When the oracle, Warren Buffet dies, the price will drop precipitously. He is old and vulnerable to Covid19, which may play a part in the price drop.
The price was ridiculous. I looked at it a year ago and couldn’t afford one share. But, Warren knows all the investors personally and that’s the way he keeps the club small. It also probably plays a role in reducing the stock’s beta. (Volatility measure.)
Really? You are using Berkshire as your assessment of the market?
Buffet is as senile as Joe Biden.
I would consider finding another basket of companies to follow.
Market is being led by Technology and Healthcare sectors. What traditionally leads equities out of a recession are Financials and Consumer Cyclicals. Those sectors have been flat to down over the past 5 weeks. Keep in mind that the 5 FAANG stocks make up something like 20% of the S&P 500 market cap. They can drive the index higher while everyone else is flat. It may be different this time, but I would like to see a little more breadth to this equity market recovery.
Buffett took a beating in the downturn, then locked in some of his losses. He missed out on some of the comeback. Bet on Heinz, Goldman and Wells Fargo. Wells Fargo killed him.
Because bottom fishing (what berkshire does) does not work in this economy.
For example, if BH were to buy JCPenny, does ANYBODY believe he could turn it around?
That game is over, BH days are all downhill.
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