reader Posted February 22 Posted February 22 From CNBC After an extremely strong 2024 for the U.S. stock market, investors are getting better returns, at least for the moment, from equities located beyond the red, white and blue borders. Since the inauguration of President Donald Trump, stocks in Europe and China are vastly outperforming the U.S. equity market. The S&P 500 is up a little over 1% since Jan. 20, as of the close on Thursday after the latest sell-off, while the broad-based MSCI China ETF has risen roughly 17%. The iShares Eurozone ETF is up roughly 6% in that same time span. The iShares China Large Cap ETF, meanwhile, is up about 16%. The Dow Jones Industrial Average is barely hanging onto a positive return over the past month. The leaders of U.S. tech are not faring better against Chinese rivals in the markets. The Invesco QQQ ETF is up about 2.5%, while the KraneShares CSI China Internet ETF has risen roughly 20%. stevenkesslar 1 Quote
Stable Genius Posted February 22 Posted February 22 Why Is Warren Buffett Hoarding So Much Cash? Investors are poised to study the Berkshire Hathaway chairman’s annual letter for insights about the stock market WSJ Quote
Members stevenkesslar Posted February 22 Members Posted February 22 43 minutes ago, reader said: From CNBC After an extremely strong 2024 for the U.S. stock market, investors are getting better returns, at least for the moment, from equities located beyond the red, white and blue borders. Since the inauguration of President Donald Trump, stocks in Europe and China are vastly outperforming the U.S. equity market. The S&P 500 is up a little over 1% since Jan. 20, as of the close on Thursday after the latest sell-off, while the broad-based MSCI China ETF has risen roughly 17%. The iShares Eurozone ETF is up roughly 6% in that same time span. The iShares China Large Cap ETF, meanwhile, is up about 16%. The Dow Jones Industrial Average is barely hanging onto a positive return over the past month. The leaders of U.S. tech are not faring better against Chinese rivals in the markets. The Invesco QQQ ETF is up about 2.5%, while the KraneShares CSI China Internet ETF has risen roughly 20%. Sorry. Can't resist. I'm just teasing. I agree with your basic point, and would go further. There are three huge winners for almost everything Trump is doing: China, China, and China. Xi must be absolutely delighted. And our allies, especially in Asia but also in Europe, are in shock. Congratulations, Xi. Even if Trump 2.0 ends as badly as Trump 1.0, and Democrats come roaring back like in 2018 and 2020 (we did gain one House seat even in 2024) there is no going back on this one. Everyone now knows for a fact that America is fickle and unreliable. That said, I found that meme maybe about a year ago and sent it to a nephew who is my partner in crime on stock trading. At some point last year I was into both FXI, a China ETF, and BIDU. I figured both were scraping long term bottoms, and poised for recovery. Probably correctly. But I got out of small positions with small profits on both BIDU and FXI to put more into US tech stocks instead. Meanwhile, I've been selling shares of FNGU (Facebook, etc.) at like a 200 - 300 % profit that I bought in late 2023 when tech stocks dipped. Don't count the US out yet. FXI has a one year return of 58 % as of today. Woo hoo. (Or is it Wuhan? LOL) But, their three year return is 1.69 %. China is coming off long term bottoms. The US stock exchanges mostly keep breaking records. My placeholder for stocks under Trump is an FT article posted right after he won. It predicted that we will have a stock sugar high, just like when Trump had a hog feed for billionaires and corporations in 2017. Poor things! They really need the money - not veterans or working class Trump voters. But within a few years, FT predicted, Trump will find a way to fuck it all up. I always think the past is the best guide. So I buy that. He'll fuck things up again, eventually. He's already off to a great start. Now I'm not even sure about a 2025 sugar high. Trump is doing so many things that will have so many unknown consequences that all bets are off. One reason to get scared from US markets is simply the degree of uncertainty based on his politics of retribution, and erratic behavior. The other thing that is for sure is that young voters, Black and Hispanic voters, and White working class voters who do not have a lot of wealth in homes or stocks, and are pissed about high rents, will not benefit from any of this. I read an article today about how The National Association of Home Builders is saying everything Trump is doing will make it harder to increase rental housing supply. From tariffs on construction materials to deportation of migrant laborers to cuts in HUD. The home builders are not left wing Bernie supporters. These signals could be canaries in the coal mine that things will end badly more quickly than in Trump 1.0. Anyways, congratulations Xi, and China. He's the big winner. Raposa and reader 2 Quote
reader Posted February 22 Author Posted February 22 5 minutes ago, stevenkesslar said: Trump is doing so many things that will have so many unknown consequences that all bets are off. One reason to get scared from US markets is simply the degree of uncertainty based on his politics of retribution, and erratic behavior. Agree. If there’s anything retail investors hate it’s uncertainty. In moments like this, I think the sage advice of Warren Buffett provides the best succor: buy when others are fearful; sell when others are greedy. Quote
Members stevenkesslar Posted February 22 Members Posted February 22 26 minutes ago, reader said: In moments like this, I think the sage advice of Warren Buffett provides the best succor: buy when others are fearful; sell when others are greedy. Are you my nephew in disguise? 😉 He literally just sent me that a few days ago. But it was not meant as a compliment to Buffet. My nephew is more confident about his ability to use technical analysis to know when to buy and sell than I am of mine. I made the point, which he does not agree with, that Buffet always has the last laugh. Because he focuses on long term fundamentals - it's the profits and the economy, stupid! - rather than technical signals. That was my nephew's polite way of calling Buffet and me has beens, I think. 🙄 Those returns for either BK or the S& P are nothing to sneeze at. But Buffet does not outperform the way he used to. We both speculated it could be because Buffet is wary of tech stocks (but not Apple), and this bull market has been even more tech-focused than most. I still think Buffet will have the last laugh. So it is noteworthy that he has been selling and piling up cash. In fairness, he was doing it when Biden was POTUS, also. He clearly thinks the market and economic valuations he uses are stretched about as far as they ever go. Wow, people still use facts. Who knew? So the question is whether Trump and greed can stretch it even further before the inevitable collapse. Whether markets reach new highs, the value that is definitely added by Trump is he will run up the US debt to heights never seen before, even in World War II. Ray Dalio, who is always gloomy, is on a roll now saying if we don't bring annual deficits back down to 3 % of GDP, we are going off the cliff in no more than three years. Where is Bill Clinton, aka President Surplus, when you need him? Can I pass on the Epstein files, and take higher taxes on billionaires instead? One estimate I read is that annual deficits as a percentage of GDP are about 6-7 % now, and Trump's plans will get that up to 10 % of GDP. What could possibly go wrong? My nephew, like lots of Millennials and Zoomers, is cynical about government ever getting it right. He does usually vote Democratic. And he thinks Trump is a stupid moron. But he thinks in the long run Democrats will be glad Harris lost. Because Trump will own the train wreck that is coming. Since Trump has a stellar track record at bankruptcy, it is not difficult at all for me to imagine that happening. reader 1 Quote
reader Posted February 22 Author Posted February 22 What I like about Berkshire is that it issues no dividends but reinvests profits to make acquisitions (his latest was additional shares of Occidental Petroleum). Buffett is last one to pitch his own stock, nudging new investors towards the 500. He’s three things that Trump can never be: humble, brilliant and trustworthy. stevenkesslar 1 Quote
reader Posted February 23 Author Posted February 23 Trying to discern what Buffett thinks about market conditions is always a challenge. The following article reflects on his recent letter to shareholders. The mention of one of the things he considers good current opportunities are investment houses in Japan. From CNBC Warren Buffett amasses more cash and sells more stock The mystery over Warren Buffett’s surprisingly defensive stance deepened over the weekend. The 94-year-old CEO of Berkshire Hathaway sold more stocks in the latest quarter and grew a record cash pile even larger to $334 billion, but failed to explain in his highly anticipated annual letter why the investor known for his astute equity purchases over time was seemingly battening down the hatches. Instead Buffett said that this posture in no way represented a move away from his love for stocks. “Despite what some commentators currently view as an extraordinary cash position at Berkshire, the great majority of your money remains in equities,” Buffett wrote in the 2024 annual letter released Saturday. “That preference won’t change.” Berkshire’s monstrous ownership of cash has raised questions among shareholders and observers especially as interest rates are expected to fall from their multi-year highs. The Berkshire CEO and chairman in recent years has expressed frustration about an expensive market and few buying opportunities. Some investors and analysts have grown impatient with the lack of action and have sought an explanation why. Despite his repeated selling of stock, Buffett said Berkshire will continue to prefer equities to cash. Shareholders will have to wait a little longer it seems as the Omaha-based conglomerate net sold equities for a ninth consecutive quarter in the final period of last year, according to the company’s annual report, which was also released on Saturday. All told, Berkshire sold more than $134 billion worth of stocks in 2024. This is mainly due to the shrinking of Berkshire’s two largest equity holdings — Apple and Bank of America. Meanwhile, it appears Buffett is not finding his own stock attractive either. Berkshire continued its buyback halt, repurchasing no shares in the fourth quarter or in the first quarter through Feb. 10. This is despite a massive increase in operating earnings reportedby the conglomerate on Saturday. Buffett’s sitting on his hands amid a raging bull market that’s seen the S&P 500 gain more than 20% for two years in a row and move into the green again so far this year. Some cracks have begun to develop in the past week, however, with some concerns growing about a slowing economy, volatility from rapid policy changes from new President Donald Trump and overall stock valuations. Berkshire shares were up 25% and 16% respectively the last two years and are up 5% so far this year. Buffett did offer perhaps a small hint about stock valuations being a concern in the letter. “We are impartial in our choice of equity vehicles, investing in either variety based upon where we can best deploy your (and my family’s) savings,” wrote Buffett. “Often, nothing looks compelling; very infrequently we find ourselves knee-deep in opportunities.” Buffett did signal he would be deploying capital in one area: the five Japanese trading houses he began buying nearly six years go. https://www.cnbc.com/2025/02/22/warren-buffett-amasses-more-cash-and-sells-more-stock-but-doesnt-explain-why-in-annual-letter.html Quote
