Daniel Cary
AH legend
It appears to me that everything is volatile right now
& the stock market is always just speculation
& the stock market is always just speculation
Berkshire’s sale of Apple makes sense, for two reasons. First, they’re overvalued given their P/E ratios. When Buffet bought into Apple their P/E was something like 12X. Now it’s 33X. The other reason is the corporate tax rate is 21%. That’s down from 52% in the 1960s. Berkshire knows that the corporate rate will eventually be raised, no matter who wins the next election. Deficit spending can’t keep growing. Spending cuts are unlikely. So sell high and pay lower taxes. Smart.I agree with nearly all of what you said. This has been in the works for a while and right now there is a flock of Black Swans circling. Frankly, I’m a little surprised it has taken as long as it has. The market seems to have largely ignored eroding fundamentals for a while. It was telling that Berkshire Hathaway sold off their Bank of America holdings and 40% of their Apple holdings. I heard that Berkshire is now sitting on $277,000,000,000.00 in cash. That tells you where they think it’s wise to be right now. They’re hugely liquid and expect big opportunities in the future, they also think risk is high right now.
With the current administration, we find ourselves in perhaps the most dangerous geopolitical situation Since World War Two, and probably more so due to nuclear weapons in the hands of nations such as Iran and North Korea. There is potential for events to rapidly spiral out of control with the inept leadership in DC. Now is not a time to rush into things, but rather to stay liquid and be patient.
I'm glad you asked that. I had no idea either.What is HIBS?