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Warren Buffett sounds warning to Washington as Berkshire reports record profit

56 points by TechTechTech 2y ago

deleted 2y ago
[deleted]
ChrisArchitect 2y ago
Discussion: https://news.ycombinator.com/item?id=43141481 https://news.ycombinator.com/item?id=43141481
ArtTimeInvestor 2y ago
I wonder if the new political uncertainty in the USA is already priced in. Both the S&P 500 and the Nasdaq 100 are at an all-time high. Surprising, considering the new administration seems to shake up the US in a big way. Could go right, could go wrong - but shouldn't the uncertainty alone already devalue the US stock market?
- blargthorwars 2y ago
  It sounds odd, but there's more uncertainty in other markets. The US is the least sick of the heard.
  - ArtTimeInvestor 2y ago
    Which uncertainties do you see in Europe and China?
    - blargthorwars 2y ago
      Europe has a demographic problem, and China has been postponing its great recession for decades.
      - spwa4 2y ago
        Not to mention Germany's in a third consecutive year of economic recession and facing an election were the extreme right is sure to make big gains (again). Government policy has already taken a sharp-right turn (which is not good for the economy) and it's likely to do so again after the elections. It's close to being in the same situation as Russia was in 2022, where war would actually help it's economy. Frankly the population has turned every more to the right for a decade now. UK ... well, there's the Brexit mess, and UK MAY be exiting a 1.5 year long recession (numbers "look good", in the sense that it's no longer getting worse, but a serious hickup can still make this a 2 year long recession) France was pretty close to an extreme-right takeover (which was entirely Macron's fault, with his "elect either me or Le Hitler" ploy that he has used 4 times now and every time he uses it, it gets Le Pen closer to the presidency), and has taken a hard-right turn in policies. In this environment, parliament kicked out the government and, frankly, they're being SO stupid that it actually makes Macron look good. However, it is at least not in recession, but it's certainly going through a deep downturn. Italy WAS taken over by the extreme-right, and has been in a crisis for decades (also before Meloni, she's a symptom, not a cause. Also not making things better). Poland is an actual bona fide bright spot in this environment. Spain, Portugal, Greece, Romania, Hungary ... are not. Then there's Ukraine ... whilst perhaps not directly disrupting Western European economies, it's certainly not a positive. War, maybe constant war, has now returned to Europe. And of course, Kosovo recently felt the need to remind everyone that though the war ended, things are not resolved. And in Georgia, and the Baltic states, as well as the Polish border and Finland Putin is reminding everyone that he won't be done after the Ukraine war. Meanwhile the EU itself seems to be disintegrating. Frankly EU cohesion has taken a sharp downturn since the EU constitution disaster. Even the Shengen treaty is falling apart. It is also making a sharp right turn and now you can find headlines that "the EU commission is turning authoritarian". Makes you think that one, most European politicians are seriously denying economic reality ... and second maybe that the rise of the right and the failure of economic policy in the last decade is not a coincidence.
- smodo 2y ago
  The uncertainty is there, for sure. Just look at the index YTD and then consider that the AI hype is in full swing and that Trump promises huge tax cuts to business. Stocks should be soaring but looks like not everyone buys the story. It’s hard to price in an unknown quantity though. If the war in Europe spreads, who knows what happens? If Trump chokes on some novichok of just gives out from all the hard grifting he’s done all his life, who knows?
  - reaperducer 2y ago
    Just look at the index YTD I think a more interesting measure is looking at indicies since the change in leadership. Dow: 43,528 → 43,428 Nasdaq: 19,734 → 19,524 S&P: 6,014 → 6,013 They all went up at the beginning of the term, but have fallen back to just below where they started.
- distortionfield 2y ago
  That assumes that the corporations would be on the wrong side of the uncertainty. To me, it seems that the political environment in the US is the most corporate -friendly it’s maybe ever been, so maybe the market priced that in but for the other direction.
  - ArtTimeInvestor 2y ago
    Which concrete corporate-friendly actions have taken place?
    - akmarinov 2y ago
      A corporate overlord, the richest person in the world is the acting president. All of the Magnificent 7 have kissed the ring and paid their indulgence, earning unlimited favor. The federal agencies are being gutted left and right, regulations, where they still exist, have no one to enforce them.
      - spwa4 2y ago
        Maybe it's me but that actually doesn't sound very corporate at all. Sounds very Godfather.
    - reaperducer 2y ago
      Which concrete corporate-friendly actions have taken place? Just a few examples: A number of environmental regulations have been, or are in the process of being rolled back. There's pledges in Washington to open up more land for mineral exploration. "Drill, baby drill" is back in fashion. Lots of politicians talking about selling off millions of acres of BLM land for private development. Talk in Washington about selling off public land that was recently made into national monuments. There are literally hundreds more. If you haven't seen any, you haven't tried. It's not even every day. It's almost every hour.
    - chazeon 2y ago
      As a PhD new graduate, industry is a far better place than academia under this current government. Academia is suffering heavily from the funding cuts.
- CamperBob2 2y ago
  IMHO the only way the markets make sense is that investors fear inflation more than they do uncertainty. I don't personally understand how anything is priced anymore.
- JKCalhoun 2y ago
  Apparently Berkshire Hathaway has a substantial investment in T-bills in their portfolio. So, not so sure Buffet is convinced.
- tim333 2y ago
  I'm not sure the levels of the S&P and Nasdaq are priced in a sophisticated way. Prices are set by the largest buyers and seller which in this case is the US public buying in either directly or via pension funds and the like. The public fund buying has been ~50bn / month which is considerably more than people like Buffett's selling. The market is on the high side by most metrics, see eg. https://www.currentmarketvaluation.com/ https://www.currentmarketvaluation.com/
tuan 2y ago
"Berkshire would not have achieved its results in any locale except America whereas America would have been every bit the success it has been if Berkshire had never existed." -- https://www.berkshirehathaway.com/letters/2024ltr.pdf https://www.berkshirehathaway.com/letters/2024ltr.pdf Not just a great investor, Buffet is a great man. Not many "self-made" billionaires think like that.
BrenBarn 2y ago
If Warren Buffet believes people with the "short straw" need help, why doesn't he just give away his money to individual people in less comfortable circumstances? Edit: I'm not talking about "forming a charity". I'm talking about just giving actual money to actual individuals.
- nunez 2y ago
  I believe he has been doing that. He started a pledge to donate almost all of his net worth to charities some time ago.
- jmclnx 2y ago
  He also wants the return of the 90% tax rate for the extreme rich, similar to what we had before the GOP started to steal from the working class.
  - BrenBarn 2y ago
    Is he giving his money in a way that materially advances that goal?
    - JKCalhoun 2y ago
      How would he do that?
      - BrenBarn 2y ago
        For instance, not just make offhand comments about taxation, but form a political group that pushes for higher taxes the same way other shadowy political groups push against them.
  - RickJWagner 2y ago
    I find the swipe at the GOP odd. Leading Democrats seem to hate taxes as much as anybody. ( One of the Biden family’s legal troubles was tax evasion. ). Celebrity mouthpieces from Hollywood are known to take measures to minimize taxes, I.e. Bruce Springsteen calling his mansion a tomato farm. Pols themselves jump through hoops like John Kerry parking his yacht across state lines to minimize taxes. I don’t see much practical difference in behaviors, really.
readthenotes1 2y ago
With $334B in cash sitting around doing nothing, Buffett doesn't need anyone else to take care of the "short straws".

56 points by TechTechTech 2y ago

deleted 2y ago

[deleted]

ChrisArchitect 2y ago

Discussion: https://news.ycombinator.com/item?id=43141481 https://news.ycombinator.com/item?id=43141481

ArtTimeInvestor 2y ago

I wonder if the new political uncertainty in the USA is already priced in. Both the S&P 500 and the Nasdaq 100 are at an all-time high. Surprising, considering the new administration seems to shake up the US in a big way. Could go right, could go wrong - but shouldn't the uncertainty alone already devalue the US stock market?

blargthorwars 2y ago
It sounds odd, but there's more uncertainty in other markets. The US is the least sick of the heard.
- ArtTimeInvestor 2y ago
  Which uncertainties do you see in Europe and China?
  - blargthorwars 2y ago
    Europe has a demographic problem, and China has been postponing its great recession for decades.
    - spwa4 2y ago
      Not to mention Germany's in a third consecutive year of economic recession and facing an election were the extreme right is sure to make big gains (again). Government policy has already taken a sharp-right turn (which is not good for the economy) and it's likely to do so again after the elections. It's close to being in the same situation as Russia was in 2022, where war would actually help it's economy. Frankly the population has turned every more to the right for a decade now. UK ... well, there's the Brexit mess, and UK MAY be exiting a 1.5 year long recession (numbers "look good", in the sense that it's no longer getting worse, but a serious hickup can still make this a 2 year long recession) France was pretty close to an extreme-right takeover (which was entirely Macron's fault, with his "elect either me or Le Hitler" ploy that he has used 4 times now and every time he uses it, it gets Le Pen closer to the presidency), and has taken a hard-right turn in policies. In this environment, parliament kicked out the government and, frankly, they're being SO stupid that it actually makes Macron look good. However, it is at least not in recession, but it's certainly going through a deep downturn. Italy WAS taken over by the extreme-right, and has been in a crisis for decades (also before Meloni, she's a symptom, not a cause. Also not making things better). Poland is an actual bona fide bright spot in this environment. Spain, Portugal, Greece, Romania, Hungary ... are not. Then there's Ukraine ... whilst perhaps not directly disrupting Western European economies, it's certainly not a positive. War, maybe constant war, has now returned to Europe. And of course, Kosovo recently felt the need to remind everyone that though the war ended, things are not resolved. And in Georgia, and the Baltic states, as well as the Polish border and Finland Putin is reminding everyone that he won't be done after the Ukraine war. Meanwhile the EU itself seems to be disintegrating. Frankly EU cohesion has taken a sharp downturn since the EU constitution disaster. Even the Shengen treaty is falling apart. It is also making a sharp right turn and now you can find headlines that "the EU commission is turning authoritarian". Makes you think that one, most European politicians are seriously denying economic reality ... and second maybe that the rise of the right and the failure of economic policy in the last decade is not a coincidence.
smodo 2y ago
The uncertainty is there, for sure. Just look at the index YTD and then consider that the AI hype is in full swing and that Trump promises huge tax cuts to business. Stocks should be soaring but looks like not everyone buys the story. It’s hard to price in an unknown quantity though. If the war in Europe spreads, who knows what happens? If Trump chokes on some novichok of just gives out from all the hard grifting he’s done all his life, who knows?
- reaperducer 2y ago
  Just look at the index YTD I think a more interesting measure is looking at indicies since the change in leadership. Dow: 43,528 → 43,428 Nasdaq: 19,734 → 19,524 S&P: 6,014 → 6,013 They all went up at the beginning of the term, but have fallen back to just below where they started.
distortionfield 2y ago
That assumes that the corporations would be on the wrong side of the uncertainty. To me, it seems that the political environment in the US is the most corporate -friendly it’s maybe ever been, so maybe the market priced that in but for the other direction.
- ArtTimeInvestor 2y ago
  Which concrete corporate-friendly actions have taken place?
  - akmarinov 2y ago
    A corporate overlord, the richest person in the world is the acting president. All of the Magnificent 7 have kissed the ring and paid their indulgence, earning unlimited favor. The federal agencies are being gutted left and right, regulations, where they still exist, have no one to enforce them.
    - spwa4 2y ago
      Maybe it's me but that actually doesn't sound very corporate at all. Sounds very Godfather.
  - reaperducer 2y ago
    Which concrete corporate-friendly actions have taken place? Just a few examples: A number of environmental regulations have been, or are in the process of being rolled back. There's pledges in Washington to open up more land for mineral exploration. "Drill, baby drill" is back in fashion. Lots of politicians talking about selling off millions of acres of BLM land for private development. Talk in Washington about selling off public land that was recently made into national monuments. There are literally hundreds more. If you haven't seen any, you haven't tried. It's not even every day. It's almost every hour.
  - chazeon 2y ago
    As a PhD new graduate, industry is a far better place than academia under this current government. Academia is suffering heavily from the funding cuts.
CamperBob2 2y ago
IMHO the only way the markets make sense is that investors fear inflation more than they do uncertainty. I don't personally understand how anything is priced anymore.
JKCalhoun 2y ago
Apparently Berkshire Hathaway has a substantial investment in T-bills in their portfolio. So, not so sure Buffet is convinced.
tim333 2y ago
I'm not sure the levels of the S&P and Nasdaq are priced in a sophisticated way. Prices are set by the largest buyers and seller which in this case is the US public buying in either directly or via pension funds and the like. The public fund buying has been ~50bn / month which is considerably more than people like Buffett's selling. The market is on the high side by most metrics, see eg. https://www.currentmarketvaluation.com/ https://www.currentmarketvaluation.com/

tuan 2y ago

"Berkshire would not have achieved its results in any locale except America whereas America would have been every bit the success it has been if Berkshire had never existed." -- https://www.berkshirehathaway.com/letters/2024ltr.pdf https://www.berkshirehathaway.com/letters/2024ltr.pdf Not just a great investor, Buffet is a great man. Not many "self-made" billionaires think like that.

BrenBarn 2y ago

If Warren Buffet believes people with the "short straw" need help, why doesn't he just give away his money to individual people in less comfortable circumstances? Edit: I'm not talking about "forming a charity". I'm talking about just giving actual money to actual individuals.

nunez 2y ago
I believe he has been doing that. He started a pledge to donate almost all of his net worth to charities some time ago.
jmclnx 2y ago
He also wants the return of the 90% tax rate for the extreme rich, similar to what we had before the GOP started to steal from the working class.
- BrenBarn 2y ago
  Is he giving his money in a way that materially advances that goal?
  - JKCalhoun 2y ago
    How would he do that?
    - BrenBarn 2y ago
      For instance, not just make offhand comments about taxation, but form a political group that pushes for higher taxes the same way other shadowy political groups push against them.
- RickJWagner 2y ago
  I find the swipe at the GOP odd. Leading Democrats seem to hate taxes as much as anybody. ( One of the Biden family’s legal troubles was tax evasion. ). Celebrity mouthpieces from Hollywood are known to take measures to minimize taxes, I.e. Bruce Springsteen calling his mansion a tomato farm. Pols themselves jump through hoops like John Kerry parking his yacht across state lines to minimize taxes. I don’t see much practical difference in behaviors, really.

readthenotes1 2y ago

With $334B in cash sitting around doing nothing, Buffett doesn't need anyone else to take care of the "short straws".