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Berkshire's $397B Bet Against an Overheated Market

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

#121

Post by abc123abc123 »

iso1631 wrote: post #60
abc123abc123 wrote: post #35

Earlier quoted context omitted.

This is the way. Did the same thing for 3 years before corona. Drop came, went all in, fast forward a year or two, we did not die, and the stocks were about 150%-200% higher. I'm doing the same thing now. Slowly starting to sell off the shares I have, putting the profit in bonds/interest accounts, when the bubble pops, I'll go all-in (phasing it in over a few quarters most likely) and then profit after 1-2 years.

2017 the SPY went from 2200 to 2600, in March 2017 it was around 2350. The lowest it hit in March 2020 was 2190, on March 23rd. It was back at 2500 3 days later. Well done on your 7% discount. Hope you didn't sleep in that day

No, I did not invest in index funds, and I did not invest in SPY. But please try again.

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

#122

Post by mschuster91 »

redwood wrote: post #103
mschuster91 wrote: post #88

Earlier quoted context omitted.

The problem is, the last two decades were marked by extremely low, zero and sometimes outright negative interest rates plus a ton of outright printed money that got blown up the arses of the big banks. Worldwide. That money sought returns and found them in hypergrowth of increasingly dumber nonsense. First it was Meta (or back then, just Facebook), then Tesla, then during Covid cryptocurrencies and NFTs, and now it's…

Right now it seems like space, defense, robotics, and in the fullness of time quantum computing are very clearly positioned as the next big things. Let alone bio and healthcare stuff which is always humming along especially after ozempic shakes things up

Almost all of these fields has some sort of regulation attached that makes hypergrowth very unlikely though.

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

#123

Post by ethbr1 »

abirch wrote: post #83
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

I feel like this is dot com 2.0. The dot com's valuations eventually were proven to be true, only way too early. With investing Timing is everything, if you invest in Pets.com you lost, if you invested in chewy.com you won. If you invested in Broadcast.com you lost, if you invested in YouTube.com you won. AI is going to transform things but these current prices are crazy.

> With investing Timing is everything, if you invest in Pets.com you lost, if you invested in chewy.com you won. If you invested in Broadcast.com you lost, if you invested in YouTube.com you won.

During bubbles valuations are driven by growth at any cost.

During crashes businesses are kept alive by their ability to function profitably.

So if trying to separate winners from losers, then central question is "Do I believe this company has an ability to pivot from growth to profitability without torpedoing itself?"

Which ultimately gets to unit economics and cost vs profit scaling trends.

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

#124

Post by redwood »

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…

The way I look at it our economy has already decoupled from its physical inputs. That's what cyberspace and a Services based economy really enables. It's kind of cool. That's why I find the focus on climate impacts of data centers to be backwards since they're actually enabling the economy to grow without it being centered on physical input

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

#125

Post by ethbr1 »

Anon1096 wrote: post #108
surgical_fire wrote: post #93

Earlier quoted context omitted.

For how long can the gamble be detached from real life? It's an honest question. In the real world, resources and people are finite. Things have to make sense, the bills have to be paid. In the stock market however, a company can be completely worthless in the real life, but if the money blobs all agree to pumo money into it the stock price goes up anyway.

Wealth is not in fact finite. If you take a piece of lumber and carve it into a dresser you've just generated wealth. Resources kind of are but not really, extraction takes it from unusable to usable and essentially creates it (also, trees literally grow out of the ground). Similarly Tesla has made a lot of cars that people drive and AI companies have created products that have hundreds of millions of DAU. Whether th…

> If you take a piece of lumber and carve it into a dresser you've just generated wealth.

I'd make the note that you've converted raw materials and labor (and maybe some capital machinery/tools) into a finished good.

Whether the market will value that finished good at more than the sum of what you paid for its parts is a fair question though!

It's entirely possible to have net-unprofitable economic activities, especially in a bubble.

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

#126

Post by cpburns2009 »

inigyou wrote: post #118
cpburns2009 wrote: post #101

Earlier quoted context omitted.

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.

There's a gradient between boredom and existential dread

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

#127

Post by ethbr1 »

redwood wrote: post #102
surgical_fire wrote: post #93

Earlier quoted context omitted.

For how long can the gamble be detached from real life? It's an honest question. In the real world, resources and people are finite. Things have to make sense, the bills have to be paid. In the stock market however, a company can be completely worthless in the real life, but if the money blobs all agree to pumo money into it the stock price goes up anyway.

Well the question is what's a more appealing place to put your money? Because in the absence of one the stock market by default is viewed as an appealing place which drives up demand for it. You might say well folks should just spend their money and enjoy it instead of putting it in the market but that's a whole different strategy. You might say folks should buy real estate well that's a whole different strategy. You…

> What will trigger the downturn will be folks who've overextended themselves on margin forced to sell in order to liquidate assets

Curious question... do the ultra wealthy ever get margin called on personal loans secured by unsold equity?

I'd assume the folks we're talking about doing that have sufficiently small loan to value (a year's expenses vs all their stock) to avoid, even in a downturn.

Maybe at the more upper income segment where LTVs on smaller equity totals are higher?

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

#128

Post by adrianwaj »

mschuster91 wrote: post #88
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

The problem is, the last two decades were marked by extremely low, zero and sometimes outright negative interest rates plus a ton of outright printed money that got blown up the arses of the big banks. Worldwide. That money sought returns and found them in hypergrowth of increasingly dumber nonsense. First it was Meta (or back then, just Facebook), then Tesla, then during Covid cryptocurrencies and NFTs, and now it's…

In terms of tech, the Mecha Comet was funded in 6 minutes on KS. After it ships in October, will be interesting to see the doors it opens up for people. Comet to where?

A 1-device to rule them all could be very empowering. Sodium batteries will be big. True wireless power would be huge for solar energy generation from space and sent to Earth. Any power breakthroughs are very noteworthy as the effects cascade.

Lots of 'next big things' (and people) likely 'shelved' on purpose as too disruptive. Welcome to Earth. It's not so much 'what' will be big, but 'who.' Headshots and lineage still matter. Heart and soul is really the only big thing.

A bulls### detector (and repellent in an aerosol) would also be a timeless classic. As would a latent human superpower training and attunement school - until it gets shutdown.

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

#129

Post by shash »

Anon1096 wrote: post #108
surgical_fire wrote: post #93

Earlier quoted context omitted.

For how long can the gamble be detached from real life? It's an honest question. In the real world, resources and people are finite. Things have to make sense, the bills have to be paid. In the stock market however, a company can be completely worthless in the real life, but if the money blobs all agree to pumo money into it the stock price goes up anyway.

Wealth is not in fact finite. If you take a piece of lumber and carve it into a dresser you've just generated wealth. Resources kind of are but not really, extraction takes it from unusable to usable and essentially creates it (also, trees literally grow out of the ground). Similarly Tesla has made a lot of cars that people drive and AI companies have created products that have hundreds of millions of DAU. Whether th…

Wealth is not finite, but it does have to obey physical limits and real world implications. If person A takes a piece of lumber and carves it into a dresser, and person B, seeing that, buys up lower quality lumber that cannot become a dresser, is that wealth generation? What then, of the guy who buys up lumber futures and dresser futures, on something that won't actually ever happen (say, those lumber futures are for trees that are completely not viable) and then claims to be creating wealth? And asking the stock market to value him on the basis of hype?

There's real wealth and there is all of the manipulation to drive up prices.

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

#130

Post by vintermann »

bryanlarsen wrote: post #119
vintermann wrote: post #109

Earlier quoted context omitted.

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.

The ones with power, like Gillibrand, are not "oddballs". They must be seen as exponents of the central idea of the party, which is basically just stable interest on capital. They might once have opposed the allocation of capital into crypto, but if capital is invested in crypto now, then crypto must be defended. Marx's quip about the Tories in England feels appropriate:

"The Tories in England long imagined that they were enthusiastic about monarchy, the church and the beauties of the old English Constitution, until the day of danger wrung from them the confession that they are enthusiastic only about ground rent."

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