Berkshire's $397B Bet Against an Overheated Market • Hacker News Board

Re: Berkshire's $397B Bet Against an Overheated Market

#111

Post by phyzix5761 » Mon, Jul 13, 2026, 3:48 PM UTC

khurs wrote: post #53

> Berkshire Hathaway just reported a record $397.4 billion in cash and T-bills, 59% of its investable portfolio. Isn't that just lazy? Even if the market is overheated, there will be opportunities in non-overheated areas/other countries/distressed companies etc? Unless they are sure of a crash and need funds to buy on the cheap.

I've scanned the whole S&P 500 with a DCF calculator I wrote and everything is over valued right now. DCF is not the end all of valuation but its a big part for the Buffet style of investing. The goal of an investor is not to make returns every year but to make returns in the long term. Returns that are higher than the S&P 500 as an aggregate.

Also, with the amount of cash BH is playing with those smaller distressed companies don't make a dent in their portfolio. They need the big corporations to be undervalued before they get in.

Re: Berkshire's $397B Bet Against an Overheated Market

#112

Post by stasomatic » Mon, Jul 13, 2026, 4:49 PM UTC

yetihehe wrote: post #110

stasomatic wrote: post #95

Earlier quoted context omitted.

I understand this is childish, but nobody asked me if I wanted to be on this rock hurling through space at 230K/s. Thanks, parents :)

This is not childish. It means you have no purpose in life. If you feel life is not worth living, find purpose and you will feel better. "Make more life", "make life more bearable for me" and "make life more bearable for others" are good universal ones, to have a starting point. If you don't like them, find a better one. Of course, if you DO want to be unhappy, please continue as is :), accumulated unhappiness someti…

This wasn't about me, more about a "one". I am sure most have had such thoughts. I know what you are saying, but my point is that none of us are voluntarily here. I was told by my grandma I was an accident :) Accident our not, you hatched from the egg, now go find purpose.

Re: Berkshire's $397B Bet Against an Overheated Market

#113

Post by jauco » Mon, Jul 13, 2026, 5:11 PM UTC

bryanlarsen wrote: post #82

wongarsu wrote: post #46

Earlier quoted context omitted.

In a world where Tesla has stayed at "severely overvalued" stock prices for about a decade, with occasional crashes to just "overvalued", I'm not so sure the big AI companies really need returns that justify their stocks. Sam Altman and Dario Amodei are both in their own ways trying to capture that same lighting in a bottle where the company is evaluated solely on the CEO's vision

In 2022, Tesla had a P/E of 34 and a growth rate of 50%.

But it’s 2026 now

Re: Berkshire's $397B Bet Against an Overheated Market

#114

Post by redwood » Mon, Jul 13, 2026, 5:26 PM UTC

plomme wrote: post #107

redwood wrote: post #104

Earlier quoted context omitted.

Well the fundamental reason boils down to the idea that these companies that you're investing in employ a bunch of sophisticated professionals who wake up everyday aiming to grow the success of their businesses. In other words you're really investing in their potential. Compare that to for example something that's purely speculative like gold.. a useless piece of metal that just sits there. Buffett has really helped…

Does it follow that the price of the index should go up in perpetuity because workers are motivated?

I would expect the earnings and or growth of those companies to go up at the very least. Whether that translates to higher valuation for ownership shares in those companies is probably more a question of whether there's anything else more appealing out there to invest in. What's your take? What's more appealing?

Re: Berkshire's $397B Bet Against an Overheated Market

#115

Post by bryanlarsen » Mon, Jul 13, 2026, 5:35 PM UTC

jauco wrote: post #113

bryanlarsen wrote: post #82

Earlier quoted context omitted.

In 2022, Tesla had a P/E of 34 and a growth rate of 50%.

But it’s 2026 now

It's a reply to OP's "for about a decade".

In 2022 we still had ZIRP, so a P/E of 34 was relatively low. (Interest rates are E/P for cash).

Re: Berkshire's $397B Bet Against an Overheated Market

#116

Post by jauco » Mon, Jul 13, 2026, 6:19 PM UTC

bryanlarsen wrote: post #115

jauco wrote: post #113

Earlier quoted context omitted.

But it’s 2026 now

It's a reply to OP's "for about a decade". In 2022 we still had ZIRP, so a P/E of 34 was relatively low. (Interest rates are E/P for cash).

Ah sorry. I thought it was just saying tesla wasn’t overvalued.

Re: Berkshire's $397B Bet Against an Overheated Market

#117

Post by plomme » Mon, Jul 13, 2026, 6:28 PM UTC

redwood wrote: post #114

plomme wrote: post #107

Earlier quoted context omitted.

Does it follow that the price of the index should go up in perpetuity because workers are motivated?

I would expect the earnings and or growth of those companies to go up at the very least. Whether that translates to higher valuation for ownership shares in those companies is probably more a question of whether there's anything else more appealing out there to invest in. What's your take? What's more appealing?

I wish I knew! My money is still mostly in index funds and real estate.

My sneaking doubt is whether the index can keep growing, because doesn’t that depend on infinite growth based ultimately on mostly finite natural resources, manpower, and land? But maybe we can always extract and produce more with new technology, and that manpower may get leveraged or extended by AI and robotics. Or maybe just financial magic beyond my understanding.

Regardless I have been thinking a lot about what aging and declining populations might do to the economy in the medium-long term. I only know that I know nothing.

Re: Berkshire's $397B Bet Against an Overheated Market

#118

Post by inigyou » Mon, Jul 13, 2026, 6:42 PM UTC

cpburns2009 wrote: post #101

inigyou wrote: post #33

Earlier quoted context omitted.

I hate that having children is apparently the only purpose anyone has in life because I don't have children or a purpose in life and I'm pretty sure I would be even more depressed if I had children.

Living only for yourself gets really boring. Children give you a life-long purpose. That and the evolutionary purpose, or drive, of life is reproduction.

I wouldn't describe existential panic/despair as a form of boredom. More like a form of cosmic terror.

Re: Berkshire's $397B Bet Against an Overheated Market

#119

Post by bryanlarsen » Mon, Jul 13, 2026, 8:35 PM UTC

vintermann wrote: post #109

vintermann wrote: post #96

Earlier quoted context omitted.

The opposition in the US doesn't believe in anything except "stability". That means they'll probably keep most actual Trump administration policies. Probably even the war on Iran, though they might stop pretending to call it off every weekend.

To people who think I'm cynical (and are presumably downvoting), I present this nice example which just turned up: "Kirsten Gillibrand wants to save crypto - but Trump windfall is a political obstacle" https://theintercept.com/2026/07/13/gillibrand-crypto-trump-... I am not exaggerating.

The problem with Democrats is that they believe in too many things, not that they believe in only stability.

You can find a Democrat on both sides of every issue. It's a big tent party, and houses a lot of oddballs.

Re: Berkshire's $397B Bet Against an Overheated Market

#120

Post by derf_ » Mon, Jul 13, 2026, 11:33 PM UTC

plomme wrote: post #117

redwood wrote: post #114

Earlier quoted context omitted.

I would expect the earnings and or growth of those companies to go up at the very least. Whether that translates to higher valuation for ownership shares in those companies is probably more a question of whether there's anything else more appealing out there to invest in. What's your take? What's more appealing?

I wish I knew! My money is still mostly in index funds and real estate. My sneaking doubt is whether the index can keep growing, because doesn’t that depend on infinite growth based ultimately on mostly finite natural resources, manpower, and land? But maybe we can always extract and produce more with new technology, and that manpower may get leveraged or extended by AI and robotics. Or maybe just financial magic bey…

> ...doesn’t that depend on infinite growth based ultimately on mostly finite natural resources, manpower, and land?

There is no practical limit to the price of the index. Shares may represent some claim on those things you mentioned, but shares outstanding have been steadily shrinking for decades, essentially since the dot-com boom [0]. Meanwhile, governments have been printing money like it's going out of style, and most of it has been ending up with the wealthy, who, lacking any practical way to spend it all on consumption, use it to bid up asset prices. It is no wonder that the price of a shrinking pool of actual resources [1] has risen dramatically when measured in a growing supply of money (which is only a relative resource, not a real one).

One could certainly look at the rise of the 401k as a retirement vehicle, and conclude that at some point those flows are going to reverse. One could also look at the US SSA statistics on the number of workers per retiree, and its trend over time, and paint a pretty grim picture, but is that enough to offset the combined forces of inflation and the compounding wealth of the ultra-wealthy?

Man, I don't know, either.

The good news is "nothing" is all you need to know to invest in an index fund.

[0] This has actually reversed recently with the AI boom, but it is the first time in a while that companies have tried harder to raise capital to grow the pie than to buy back shares to return cash to shareholders.

[1] Rather, a shrinking pool of claims on those resources, each claim increasing its value measured in real resources as companies buy back shares, an effect Buffett famously loves.