Betting on Buffett
The Oracle of Omaha piles up cash
Good morning, outspoken market oracles. This is your Stock Market Rundown for November 6th, 2023. Thanks for tuning in for another week of financial follies. Let’s dig in:
TODAY’S TOP STORY: THE BILLIONAIRE NEXT DOOR 💵
Billionaire investor Warren Buffett's public persona is that of a kindly elder statesman of the markets, ever ready with a quotable quip. But don’t let the folksy-uncle act fool you: he’s a savage when it comes to cutting a deal.
This is a man who knows how to read the markets, and right now, he’s signalling caution. Buffett’s holding company, Berkshire Hathaway, recently reported its balance-sheet cash hoard is up to a record $157.2 billion. (That’s enough cash to buy every NFL team, which would guarantee you tickets to the Super Bowl.)
Over Berkshire’s history, elevated cash levels have indicated Uncle Warren isn’t seeing many bargains in the market. As Buffett himself said at Berkshire’s annual meeting in Omaha last May: “Cash is not trash.”
Berkshire Hathaway owns a diverse portfolio of old-timey businesses, including Fruit of the Loom, Dairy Queen, and Geico Insurance. The insurance business, in particular, helped drive recent quarterly operating profit to a record.
As for Buffett’s stock portfolio, while he preaches diversification, he’s mega-exposed to a single stock: Apple makes up around half of the Berkshire portfolio—and has been an absolute monster win.
Other Buffett top picks include Bank of America, Coca-Cola, and Chevron. The portfolio isn’t all mom and apple pie—it also holds Chinese EV manufacturer BYD, another home run.
It’s obvious that despite being 93 years of age, the Oracle of Omaha is still razor sharp. Fitting that Berkshire is also the largest shareholder of Gillette.
SO WHAT ELSE IS GOING ON?
The Winklevoss twins may have rowed their last regatta. New York’s attorney general is going after Gemini, the crypto exchange they founded, for defrauding investors. The twin brothers initially became famous for their legal entanglements with Mark Zuckerberg, before moving on to scam crypto investors for, allegedly, $1 billion in losses.
Another fad fades: Canada Goose, the once-trendy parka maker, saw its stock plunge on analyst downgrades due to unseasonably warm weather—and penny-pinching consumers shopping for their winter jackets at the Army Surplus Store. Maybe they can try pivoting to swimsuits?
Move over, Elon: Toyota is debuting an electric-vehicle battery breakthrough that allows EVs to go 745 miles on a 10-minute charge, more than twice the driving range of most current EVs. Problem is, America’s electric-charging infrastructure is thinner than Joe Buck’s hairline, so you could still end up stranded somewhere with your car battery drained to 0%.
In a sustainability push, Zara wil manufacture garments out of fibre recycled from cotton textile waste. They can feel free to rake the freaking leaves off my lawn and make clothes out of them, too… planting maples was a mistake.
That’s it for today, my friends; see you tomorrow morning. Yours in capitalism, The Axe