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Buffet's strategy assumes a rational market, so I wouldn't expect it to work as well in an environment where stock market valuations are increasingly vibes-base

Buffet's strategy assumes a rational market, so I wouldn't expect it to work as well in an environment where stock market valuations are increasingly vibes-based and often wildly inflated by circumstances that should be illegal (like selling X to xAI to generate a voodoo valuation). Arguably the entire market is heavily overvalued now, though, so while his strategies are probably no longer optimal, they'll probably continue to work out well enough at least until the next big correction.

abirch 10mo ago
“in the short run, the market is a voting machine… but in the long run, the market is a weighing machine.” Ben Graham
- sporkxrocket 10mo ago
  It seems like something is broken since TSLA (for example) has been completely divorced from fundamentals since at least 2020. The richest man in the world has the vast majority of his net worth derived from vaporware and straight up fraud. Still wondering when the "weighing machine" kicks in.
  - abirch 10mo ago
    Unfortunately it's expensive to short Tesla because Elon and Peter Thiel don't allow their shares to be shorted. Add to that, it's part of the S&P 500. It's going to take a while but I foresee a lot of red for TSLA. We'll see what happens but TSLA is already revising their target of cars sold in Q4
    - bdangubic 10mo ago
      investors have stopped looking at TSLA as a car company awhile ago so car sales will hardly move the price (downward)
    - tome 10mo ago
      > Elon and Peter Thiel don't allow their shares to be shorted Do you have more information about that? That sounds impossible for a publicly traded company.
      - abirch 10mo ago
        You can look at DRS: https://www.investing.com/news/company-news/genius-group-shares-details-on-direct-registration-to-combat-short-selling-93CH-4140254 https://www.investing.com/news/company-news/genius-group-sha...
        tome 10mo ago
        Oh I see, you meant Elon and Thiel prevent the shares they control from being shorted? I originally thought you meant they prevent any TSLA shares from being shorted.
  - andrewaylett 10mo ago
    The market can remain irrational for longer than you can remain solvent.
jimnotgym 10mo ago
Some people suggest this is a function of too much wealth centred in too few people, causing a high demand for assets. If that is true, maybe that is where we should focus?
- bayarearefugee 10mo ago
  Massive wealth inequality is certainly a factor, not just in this but the associated affordability situation being faced by the group of people whose wealth isn't being buoyed by the stock market. But I don't know what we can do about it when government has been captured by people with vested interests in not fixing anything. It feels like things have to get bad enough to get people to actually rise up. Not like, revolution or anything, but real protest (and enough political awakening to understand that they are being fed culture war bullshit to distract them from the class war they should be waging).
JumpCrisscross 10mo ago
> Buffet's strategy assumes a rational market The public stuff, sure, in the short term. The wholly-owned stuff, however, is pure private equity: their cash flows should cash flow irrespective of financing conditions.

abirch 10mo ago

“in the short run, the market is a voting machine… but in the long run, the market is a weighing machine.” Ben Graham

sporkxrocket 10mo ago
It seems like something is broken since TSLA (for example) has been completely divorced from fundamentals since at least 2020. The richest man in the world has the vast majority of his net worth derived from vaporware and straight up fraud. Still wondering when the "weighing machine" kicks in.
- abirch 10mo ago
  Unfortunately it's expensive to short Tesla because Elon and Peter Thiel don't allow their shares to be shorted. Add to that, it's part of the S&P 500. It's going to take a while but I foresee a lot of red for TSLA. We'll see what happens but TSLA is already revising their target of cars sold in Q4
  - bdangubic 10mo ago
    investors have stopped looking at TSLA as a car company awhile ago so car sales will hardly move the price (downward)
  - tome 10mo ago
    > Elon and Peter Thiel don't allow their shares to be shorted Do you have more information about that? That sounds impossible for a publicly traded company.
    - abirch 10mo ago
      You can look at DRS: https://www.investing.com/news/company-news/genius-group-shares-details-on-direct-registration-to-combat-short-selling-93CH-4140254 https://www.investing.com/news/company-news/genius-group-sha...
      - tome 10mo ago
        Oh I see, you meant Elon and Thiel prevent the shares they control from being shorted? I originally thought you meant they prevent any TSLA shares from being shorted.
- andrewaylett 10mo ago
  The market can remain irrational for longer than you can remain solvent.

jimnotgym 10mo ago

Some people suggest this is a function of too much wealth centred in too few people, causing a high demand for assets. If that is true, maybe that is where we should focus?

bayarearefugee 10mo ago
Massive wealth inequality is certainly a factor, not just in this but the associated affordability situation being faced by the group of people whose wealth isn't being buoyed by the stock market. But I don't know what we can do about it when government has been captured by people with vested interests in not fixing anything. It feels like things have to get bad enough to get people to actually rise up. Not like, revolution or anything, but real protest (and enough political awakening to understand that they are being fed culture war bullshit to distract them from the class war they should be waging).

JumpCrisscross 10mo ago

> Buffet's strategy assumes a rational market The public stuff, sure, in the short term. The wholly-owned stuff, however, is pure private equity: their cash flows should cash flow irrespective of financing conditions.