Buffett continues to bet on a stock market crash

[Horace]

That'll be his final prognostication as CEO of Berkshire, as he's retiring in a month.

[Horace]

The adage that the stock market can remain irrational longer than you can remain solvent springs to mind. He's in no danger of insolvency, but the opportunity cost of that cash pile, as compared to having invested it in the S&P, can be measured in the 10s of billions. He'll need an extraordinary crash to make any sense of that choice.

[jon-nyc]

Also he needs the stock market to crash but not the dollar for this to make any sense.

Ray Dallio seems particularly concerned about the latter.

[Axtremus]

Maybe he just doesn't want to do too much now as he nears retirement, leaving more big decisions to his successor.

[Horace]

@Axtremus said in Buffett continues to bet on a stock market crash:

Maybe he just doesn't want to do too much now as he nears retirement, leaving more big decisions to his successor.

Keeping cash is as big a decision as investing it is.

[Horace]

BRK down on the day, after an extremely good earnings report over the weekend. The market hates the cash strategy.

[Horace]

I won't be at all surprised if real valuations grow into these bubbly prices, due to AI. If that happens, BRK is screwed. The problem with keeping cash is that you either capitulate eventually, thereby eating the opportunity costs, or permanently accept the objectively bad outcome of 0% returns indefinitely.

[jon-nyc]

They’re probably earning more like 4% but still there’s some opportunity cost there.

[Horace]

Yeah I guess it's in cash equivalents with sufficient liquidity, earning something or other.

[kluurs]

So, what do we recommend for Buffet to ensure he'll not outlive his investments?

[Axtremus]

@Horace said in Buffett continues to bet on a stock market crash:

@Axtremus said in Buffett continues to bet on a stock market crash:

Maybe he just doesn't want to do too much now as he nears retirement, leaving more big decisions to his successor.

Keeping cash is as big a decision as investing it is.

Yet one that can be easily changed.

[Mik]

It may be part of his decision to give away the fortune.

[Horace]

@Axtremus said in Buffett continues to bet on a stock market crash:

@Horace said in Buffett continues to bet on a stock market crash:

@Axtremus said in Buffett continues to bet on a stock market crash:

Maybe he just doesn't want to do too much now as he nears retirement, leaving more big decisions to his successor.

Keeping cash is as big a decision as investing it is.

Yet one that can be easily changed.

Open market stock investments are easily changed.

[jon-nyc]

@kluurs said in Buffett continues to bet on a stock market crash:

So, what do we recommend for Buffet to ensure he'll not outlive his investments?

Give it all to me and I will support him and his wife until they die.

That’s the kind of guy I am, I don’t even know them yet I’m willing to assume their longevity risk.

[Horace]

Michael Burry of Big Short fame took out a bunch of shorts on AI plays like PLTR and NVDA last quarter. They're all deeply underwater by now, presumably, but maybe they'll pay off eventually.

[89th]

I'd have to imagine they'll come back to earth eventually. The valuations are pretty bananas, but who knows. I got lucky buying PLTR a few years ago at like $6, so a few months ago when it was at $160 I sold like 30%. Of course it's like $190 now...

[89th]

Ha guess it was at $210 yesterday but is down 15% today.