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Warren Buffett’s Berkshire dumps most of Goldman Sachs stake

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Re: Warren Buffett’s Berkshire dumps most of Goldman Sachs stake

#21

Post by blackrock »

mam2 wrote: post #17
blackrock wrote: post #16

What does he know that we don’t? He just dumped most of his airline holdings, after losing some $5 billion dollars. It seems he might be going into cash, and sitting things out, until a true correction hits, and then he’ll go back in and pick up companies for pennies on the dollar.

He was not so wise on the airlines...

The $5 billion loss is likely pocket change to him.

But he might be onto something. Which means, does he know some insider knowledge that we don’t?

The airlines industry is practically about tourism. Yes, there is business travel, but tourism is an important part of it. But, there is unlikely to be any significant tourism in the years ahead, until some kind of vaccine comes out.

So, does he know about some insider knowledge here. He doesn’t take strategic positions like this on a whim, and he clearly operates on fringe insider knowledge.

Maybe his buddies are telling him, that here will likely never be a vaccine? Now, that is an interesting and possibly tradable thesis. Short the airline companies.

Re: Warren Buffett’s Berkshire dumps most of Goldman Sachs stake

#22

Post by Slartie »

blackrock wrote: post #16

What does he know that we don’t? He just dumped most of his airline holdings, after losing some $5 billion dollars. It seems he might be going into cash, and sitting things out, until a true correction hits, and then he’ll go back in and pick up companies for pennies on the dollar.

He lost a huge pile on Kraft Heinz, and that was pre-Corona. Didn't yet realize those losses AFAIK.

He lost a pile on the airlines and even decided to realize those losses.

He lost a pile on that petroleum company that I forgot the name of, but which crashed and burned recently due to oil prices plunging.

He hesitated a long time with tech stocks and lost a lot of money in the last decade due to opportunity cost. His only good bet in that area was Apple, and admittedly that paid off nicely, but even his big stake doesn't compensate for missing out on basically all other tech stocks. Especially since the size of his Apple investment suggests that he played a significant part in raising the Apple stock value, which means that he probably can't pull that out again without depressing the stock price.

Bottom line: I think Warren Buffett is overrated. He fails, just like anyone else.

Re: Warren Buffett’s Berkshire dumps most of Goldman Sachs stake

#23

Post by eganist »

voldacar wrote: post #7

Fun fact: The CEO of Goldman also makes pretty bad EDM music https://soundcloud.com/djdsolmusic

Sounds pretty standard for the genre honestly. Give him a few years though and he'll start to experiment.

Or not. Who knows. My guess is this is a hobby for him.

Re: Warren Buffett’s Berkshire dumps most of Goldman Sachs stake

#24

Post by ohashi »

Slartie wrote: post #22
blackrock wrote: post #16

What does he know that we don’t? He just dumped most of his airline holdings, after losing some $5 billion dollars. It seems he might be going into cash, and sitting things out, until a true correction hits, and then he’ll go back in and pick up companies for pennies on the dollar.

He lost a huge pile on Kraft Heinz, and that was pre-Corona. Didn't yet realize those losses AFAIK. He lost a pile on the airlines and even decided to realize those losses. He lost a pile on that petroleum company that I forgot the name of, but which crashed and burned recently due to oil prices plunging. He hesitated a long time with tech stocks and lost a lot of money in the last decade due to opportunity cost. His…

Didn't he make that bet essentially by saying index funds would beat hedge funds?

Re: Warren Buffett’s Berkshire dumps most of Goldman Sachs stake

#25

Post by erpellan »

phyalow wrote: post #14
jmeister wrote: post #9

Earlier quoted context omitted.

This is nonsense. GS has always had among the best talent on Wall St. In modeling and software they’ve been a step ahead of everyone else. An extreme example: Fisher Black, a Nobel winning economist, used to work there in the early 90s. And talent is not even the most distinguishing factor: it’s culture. Their culture is held to be the gold standard in corporate America, if you step outside the FANG bubble.

Cant say I agree. I worked for various European and US IB's pre 08, then have for the better part of the last decade been a client of them. IMO GS's culture has always struck me as a lot of self anointed hubris and resembles attitudes found on /r/iamverysmart, which when viewed from the outside it makes one laugh. All US IB's these days are largely just commodity balance sheets. None of them have any tangible edge ov…

I've worked with several ex-GS people, all of whom were convinced they were the smartest person in the room, none of whom were even close. Some of the 'GS do it this way' ideas were so terrible we wondered if part of Goldman's strategy was to seed their competition with them as part of a sabotage effort.

Re: Warren Buffett’s Berkshire dumps most of Goldman Sachs stake

#26

Post by tankenmate »

blackrock wrote: post #21
mam2 wrote: post #17

Earlier quoted context omitted.

He was not so wise on the airlines...

The $5 billion loss is likely pocket change to him. But he might be onto something. Which means, does he know some insider knowledge that we don’t? The airlines industry is practically about tourism. Yes, there is business travel, but tourism is an important part of it. But, there is unlikely to be any significant tourism in the years ahead, until some kind of vaccine comes out. So, does he know about some insider kn…

I would suspect that even after a vaccine comes out travelling of all sorts will be depressed; maybe to the point of permanently moving the needle.

As an analogy, public health experts suggest we should do away with shaking hands in the future. It may well be that social norms such as travelling, shaking hands, etc will permanently change.

Re: Warren Buffett’s Berkshire dumps most of Goldman Sachs stake

#27

Post by blackrock »

tankenmate wrote: post #26
blackrock wrote: post #21

Earlier quoted context omitted.

The $5 billion loss is likely pocket change to him. But he might be onto something. Which means, does he know some insider knowledge that we don’t? The airlines industry is practically about tourism. Yes, there is business travel, but tourism is an important part of it. But, there is unlikely to be any significant tourism in the years ahead, until some kind of vaccine comes out. So, does he know about some insider kn…

I would suspect that even after a vaccine comes out travelling of all sorts will be depressed; maybe to the point of permanently moving the needle. As an analogy, public health experts suggest we should do away with shaking hands in the future. It may well be that social norms such as travelling, shaking hands, etc will permanently change.

Depressed travelling has some interesting plays here.

This means that AirBnB is dead. And all those people that bought multiple houses, with multiple mortgages, which they can no longer service, are going to go bankrupt. Good riddance.

You can’t short AirBnB, but what other companies can you short? The loan processing companies? Zillow? BofA?

Re: Warren Buffett’s Berkshire dumps most of Goldman Sachs stake

#28

Post by markus_zhang »

rmrfstar wrote: post #5
cowsandmilk wrote: post #4

Earlier quoted context omitted.

Not sure why 1998 is relevant to a stake Berkshire bought in 2008.

Because GS has never been about having a "brain trust". It is about proximity to power. That peaked in 1998 when Time magazine ran the "Committee to Save the World" cover, featuring Bob Rubin, Larry Summers, and Alan Greenspan. To this day, people talk about that cover.

But finance is always about connections, said Michele Sindona.

Re: Warren Buffett’s Berkshire dumps most of Goldman Sachs stake

#29

Post by JackFr »

erpellan wrote: post #25
phyalow wrote: post #14

Earlier quoted context omitted.

Cant say I agree. I worked for various European and US IB's pre 08, then have for the better part of the last decade been a client of them. IMO GS's culture has always struck me as a lot of self anointed hubris and resembles attitudes found on /r/iamverysmart, which when viewed from the outside it makes one laugh. All US IB's these days are largely just commodity balance sheets. None of them have any tangible edge ov…

I've worked with several ex-GS people, all of whom were convinced they were the smartest person in the room, none of whom were even close. Some of the 'GS do it this way' ideas were so terrible we wondered if part of Goldman's strategy was to seed their competition with them as part of a sabotage effort.

I’ve made the same observation. The point is, though, if they were any good they wouldn’t be ex-GS people.

Re: Warren Buffett’s Berkshire dumps most of Goldman Sachs stake

#30

Post by tguedes »

Slartie wrote: post #22
blackrock wrote: post #16

What does he know that we don’t? He just dumped most of his airline holdings, after losing some $5 billion dollars. It seems he might be going into cash, and sitting things out, until a true correction hits, and then he’ll go back in and pick up companies for pennies on the dollar.

He lost a huge pile on Kraft Heinz, and that was pre-Corona. Didn't yet realize those losses AFAIK. He lost a pile on the airlines and even decided to realize those losses. He lost a pile on that petroleum company that I forgot the name of, but which crashed and burned recently due to oil prices plunging. He hesitated a long time with tech stocks and lost a lot of money in the last decade due to opportunity cost. His…

Warren Buffet is currently overrated because he doesn't invest in a lot of tech stocks because he claims to not have a complete understanding of the business.If you look at his record from the 70s-90s, you will realize he is the greatest investor ever. We all have our strengths and weaknesses, don't judge a fish on its ability to fly.

I think its great that he doesn't invest that much into tech and is very public about it. It influences other people to not invest in every little thing that is popular if they don't understand the business mechanics behind it.

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