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You could say that Warren Buffett is loaded for bear. The Oracle of Omaha said he would like to make permanent investments in US companies offering decent long-term prospects, but not so long as the US stock market is so overvalued. Maybe he should buy Bitcoin instead.
Buffett Pines for an elephant-sized acquisition
In his annual letter of 2019 to Berkshire shareholders, Buffett wrote:
"In the coming years, we hope to transfer much of our excess liquidity into activities that Berkshire will hold permanently. The immediate prospects for this, however, are not good: prices are exorbitant for companies with decent long-term prospects. "
Buffett added that with Berkshire Vice President Charlie Munger, who had been in office for a long time, Charlie Munger "still hopes to have an elephant-sized acquisition".
"Even at our ages of 88 and 95 – I am young – it's this perspective that makes my heart and Charlie are faster." (Just writing about the possibility of being in school.) a major purchase drove my pulse up.) "
Oh my God.
Do you just want to listen to the way Warren Buffett talks about investing? His description of the anticipation of a large asset purchase is so sensual and sincere. He is hilarious.
This guy has written annual love letters to his company's investors. I guess that should not be too surprising for a billionaire investor.
Napoleon Hill's "Think and Grow Rich" hit book (a protégé of American flight tycoon Andrew Carnegie) suggests that readers can get rich by developing a "money consciousness". But that would be clearly overcome by Warren Buffett's money. sensuality.
What are you waiting for?
The man loves to invest.
And he likes to have a heart.
In recent years he has donated a considerable number of Berkshire Hathaway shares as donations to various charities and foundations.
Get the Warren Buffett level.
We have a stock bubble. You have been warned.
"The S & P 500 is more overbought today than after all the rebounds of the previous two bear markets, based on the percentage of stocks above 50 DMA. Excellent setup for the sale, if we think this is just the beginning of a bear market, "said Kevin C. Smith, global macroeconomic asset manager at Crescat Capital. | Source: Crescat Capital /Twitter
But back to basics: what are US companies doing with all these easy Fed tickets since 2008?
If Buffett says that they are not worth their inflated values on the US stock market, what should the Federal Reserve do if inflation becomes so uncontrollable?
That Warren Buffett buys everything cheaper than the land? This $ 132 billion in cash is a disproportionate amount, but you still can not bear all the damage in the belly of this dragon.
Compared to the Federal Reserve, they are recruits.
So what then?
Continue to pause interest rate hikes and steal the US dollar?
Based on the story, it is clear that they are very willing to do it. They will continue to pump, fold their hands and pray that someone invents cold fusion before hyper-stagflation.
The pressure is strong, Elon Musk.
We will need you to start working more hours. You better watch the tired dog all the time. We do not want to see you smoking emotions on hippie podcasts anymore.
But Elon is not the only one using technology to do what people thought impossible.
Warren Buffett should take an honest look at Bitcoin
If he wants a bargain price on something offering at least decent long-term prospects, in line with his approach to income and value, the long-time crypto-skeptic Buffett should finally consider the possibility that Bitcoin is a sufficiently conservative investment with good long-term prospects.
And because cryptocurrency is in the third stage of global market adoption, it is a mature, profitable and stable sector with huge growth potential.
One can understand why Warren Buffett reacts so reflexively against Bitcoin, calling at one time the cryptocurrency "probably poison to the rat".
It is a group of software specialists led by geniuses of cryptography who are embarking on finance.
And Buffett directly benefited, very generously, from decades of banking life without competition, in a bubble protected from many barriers to entry for competitors.
"As at June 30, 2018, the Berkshire Hathaway portfolio accounted for 41% of financial services. Berkshire has 12 financial positions at the following portfolio weights. "
Who would not expect this guy to cling to Bitcoin? Just look at this portfolio weighting:
Wells Fargo: 12.81%
Bank of America: 9.79%
American Express: 7.60%
US Bancorp: 2.57%
Moody's Corporation: 2.15%
New York Mellon Bank: 1.79%
Goldman Sachs Group: 1.49%
Visa: 0.72%
Mastercard: 0.50%
M & T Bank Corp: 0.47%
Synchrony Financial: 0.35%
Torchmark Corp: 0.26%
Maybe I will not do it.
However, with so much investment in financial services and technology, a small investment in Bitcoin would actually be very consistent with its large holdings of 12 large financial companies.
An investment in Bitcoin would complement its other assets and have a lot of potential for synergy with these companies. This would not be a diversification, which Warren Buffett does not interest, but a study of his own sector and a deeper analysis of his new ins and outs.
Better late than never.
Disclaimer: The opinions expressed in the article only commit the author and in no way represent those of NCC.
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