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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

#51

Post by xtiansimon »

bonesss wrote: post #7

It’s such an odd time investment wise… We have a blooming oil war that could take chunks of the global economy with it, booming and teetering credit levels threatening collapse, the “AI” companies have a lot of tinkerbell magic and impossible returns needed to justify their stocks, major cash rich tech giants are suddenly hands-out pockets-out for big money, and … well: Elon is the worlds richest man/CEO who also sha…

> “It feels like gambling on whether they’re more incompetent or successfully corrupt.”

What you say has a ring to it. A good idea held in tension—provided ‘incompetence’ is the true opposite extreme.

Though it’s difficult to see the picture clearly, because to all _appearances_ Musk is doing well. US Culture collectively believes incompetence will not succeed for long, and this undermines my assessment.

“Twitter is now maybe better understood as a market manipulation device.”

And there’s the obfuscation. If you can manipulate at large scale and your followers somehow profit by following you, then it’s not competence but “confidence”. It’s all a game and our group is waiting for their turn, their opportunity to profit, get a great tip, win big.

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

#52

Post by khurs »

BLKNSLVR wrote: post #34
bonesss wrote: post #7

It’s such an odd time investment wise… We have a blooming oil war that could take chunks of the global economy with it, booming and teetering credit levels threatening collapse, the “AI” companies have a lot of tinkerbell magic and impossible returns needed to justify their stocks, major cash rich tech giants are suddenly hands-out pockets-out for big money, and … well: Elon is the worlds richest man/CEO who also sha…

The thing I worry about is: what happens when an actual set of adults get back into the White House? That could well be the trigger for the crash of all crashes because they might actually bring some reality pins with them, which are the antithesis of the growing, in size and number, fantasy balloons of hot-air the current cough leadership cough is facilitating.

> what happens when an actual set of adults get back into the White House?

Not just White House though, it's all the leaders of various government organisations, and private companies too. Nasdaq didn't need to change the rules for SpaceX IPO, rotten at the top.

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

#53

Post by khurs »

> 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.

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

#54

Post by applfanboysbgon »

inigyou wrote: post #41
abc123abc123 wrote: post #38

Earlier quoted context omitted.

Note that I am not arguing that children is the purpose in life for everyone. For some it is, for others it is not. I believe that the majority of child bearers are "on program" driven by their biological imperatives. I believe that among the voluntary non-children people (of which I am one) there's plenty of values, goals, hopes and aspirations. In fact, for me, life is so rich that that is why I do not want childre…

Yeah, I used to feel life was rich too, and then I very suddenly became aware that it was finite and anything I could possibly do is just leading towards the same fixed point ending. I think mentally healthy humans have ways to avoid thinking about this.

Religion, children, and legacy are the ways people cope with this. For the vast, vast majority of human history, 99% of people believed either in an afterlife or reincarnation or something of the sort. Having children, who were molded in your image and expected to take over your life's work, doing the same work you did. Or otherwise leaving an impact in the world, hoping that your legacy would be remembered and to pass on your teachings and experiences to future generations even if not to your own children.

I think advances in scientific understanding may have unfortunately been detrimental to mental wellbeing at scale. Knowing that there is no higher power or grand purpose, knowing that our civilization is probably cooked in the near term, and knowing that even if our civilization isn't immediately cooked, Earth and eventually the universe is, are all not greatly emotionally satisfying.

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

#55

Post by enoint »

bonesss wrote: post #7

It’s such an odd time investment wise… We have a blooming oil war that could take chunks of the global economy with it, booming and teetering credit levels threatening collapse, the “AI” companies have a lot of tinkerbell magic and impossible returns needed to justify their stocks, major cash rich tech giants are suddenly hands-out pockets-out for big money, and … well: Elon is the worlds richest man/CEO who also sha…

This is their 14th straight quarter of piling cash. Will the same article be written on their 15th, and 16th?

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

#56

Post by iso1631 »

le-mark wrote: post #27
rajnathani wrote: post #6

I would rename the title to “The Buffett Indicator shows an overvalued market”. For those curious of its definition (from the article): > The Buffett Indicator, a ratio that measures the market cap of the entire stock market against the GDP of the United States, has hit a record of ~232%. Historically, anything above ~120% is a signal of the market being overvalued. That being said, it’s not clear that the Buffet Ind…

The fact the AI emperor wears no clothes seems clear to me at least. The dot-com bubble looked obvious in 1997; it popped in 2000. Anyone shorting in '97-'98 was carried out on a stretcher before being vindicated. In fact 2000-2002 fell in three brutal legs over two years, and anyone who leveraged up after the first 25% leg was destroyed by the next two. My strat is to accumulate cash to buy the drop. The danger with…

Timing the market is far harder to predict than it will crash. As you said in 1997.

In 1997 the Nasdaq was about 1700. In hindsight sure, sit on cash and buy at 1200 in 2002.

In reality you'd have either bought around the 1900 mark in 2001, or perhaps waited until 2003 when it was back to 1900.

Then come 2009 you'd be back down to 1300, so would you have waited 12 years?

You are

1) betting the bubble continue until the bottom is even higher than today

2) betting that AI won't be bailed out by the most honest administration ever seen

3) betting that you can accurately time the bottom of the market

Good luck catching your falling knife

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

#57

Post by yetihehe »

inigyou wrote: post #41
abc123abc123 wrote: post #38

Earlier quoted context omitted.

Note that I am not arguing that children is the purpose in life for everyone. For some it is, for others it is not. I believe that the majority of child bearers are "on program" driven by their biological imperatives. I believe that among the voluntary non-children people (of which I am one) there's plenty of values, goals, hopes and aspirations. In fact, for me, life is so rich that that is why I do not want childre…

Yeah, I used to feel life was rich too, and then I very suddenly became aware that it was finite and anything I could possibly do is just leading towards the same fixed point ending. I think mentally healthy humans have ways to avoid thinking about this.

Find purpose which aligns with "progress or wellbeing of our species". Making kids is one, making inventions is another, helping poor or sweeping roads fits too. If you see that your "way of living" will affect people positively, typically you will have a "good life purpose".

What happens when you have kids? You leave something that will last after your death. Then you make sure that they are properly raised and have enough resources, so that your "mark on the world" is more appreciated by other people. Ultimately all the "good life" have one thing in common. Improving life of our species.

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

#58

Post by mdemare »

rajnathani wrote: post #6

I would rename the title to “The Buffett Indicator shows an overvalued market”. For those curious of its definition (from the article): > The Buffett Indicator, a ratio that measures the market cap of the entire stock market against the GDP of the United States, has hit a record of ~232%. Historically, anything above ~120% is a signal of the market being overvalued. That being said, it’s not clear that the Buffet Ind…

The Buffett indicator has been over 120% since December 2016. It dipped to 130% in March 2020.

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

#59

Post by glimshe »

iso1631 wrote: post #49
BLKNSLVR wrote: post #34

Earlier quoted context omitted.

The thing I worry about is: what happens when an actual set of adults get back into the White House? That could well be the trigger for the crash of all crashes because they might actually bring some reality pins with them, which are the antithesis of the growing, in size and number, fantasy balloons of hot-air the current cough leadership cough is facilitating.

Which will trigger even more wealth transfer to the top .1%, which the 99% will blame on the administration, and put the corrupt lot back in a few years later Eventually though the world moves on and China takes over

I think China isn't exactly a good example of corruption-free administration...

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

#60

Post by iso1631 »

abc123abc123 wrote: post #35
le-mark wrote: post #27

Earlier quoted context omitted.

The fact the AI emperor wears no clothes seems clear to me at least. The dot-com bubble looked obvious in 1997; it popped in 2000. Anyone shorting in '97-'98 was carried out on a stretcher before being vindicated. In fact 2000-2002 fell in three brutal legs over two years, and anyone who leveraged up after the first 25% leg was destroyed by the next two. My strat is to accumulate cash to buy the drop. The danger with…

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

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