5 Comments

I was just thinking Berkshire Hathaway is sitting on about 270+ billion dollars of cash reserves, at the moment, and has added Domino's Pizza to their portfolio as well, two really different entities for sure.

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BRK has stuck to its guns on owning "tangible items," but the Munger-Buffett brains trust misread entirely what tech would do and have deprived their investors of massive returns when you compare 2002-2024.

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Buying Apple was Munger’s idea, but you can really only read that much of cash reserves as Buffett saying that there is a sizable market correction on the horizon.

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Or he is building a war chest for an unbelievable merger/takeover. The other view is that you can park money almost risk-free for nearly 5% at the moment. It would be interesting to know the weighted average yield on the BRK cash compared with returns in the market over the same period.

Timing is a fool's game, but if he is wrong by 8 months or more, his investors have lost out heavily. For YTD, Vanguard's VOO, for example, is up 28%.

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I believe he is looking at the economy. The equity markets are running on sentiment and record high leverage on broker accounts and with that much leverage the equity markets are susceptible to margin calls.

The economy and the markets are disconnected, as the markets are always the last to show.

Take this for what it is worth, but I digress.

Corporate executives are now selling their stock at record levels, with the ratio of sellers to buyers hitting 6x.

https://x.com/KobeissiLetter/status/1867337719229423923

US large bankruptcies are now up to 634 year-to-date, the highest in 14 years.

There have now been 32 more bankruptcies year-to-date than during the 2020 pandemic lockdowns.

In November alone, 69 large firms filed for bankruptcy, the second-highest monthly total since July 2020.

Consumer discretionary has seen the highest number of filings in 2024, at 99.

This is followed by 79 in industrials and 62 in healthcare.

44% of all bankruptcies have been recorded in the consumer discretionary, consumer staples, industrial or healthcare sectors.

https://x.com/KobeissiLetter/status/1867304812758311397

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