Berkshire Hathaway on Saturday reported a solid increase in second-quarter operating earnings, while the cash hoard at Warren Buffett’s conglomerate swelled to nearly $150 billion.
The Omaha-based giant’s operating earnings — which encompass profits made from the myriad of businesses owned by the company, like insurance, railroads and utilities — totaled $10.043 billion last quarter, 6.6% higher than the figure from the same quarter a year ago. Net income totaled $35.91 billion, compared with a $43.62 billion loss during the second quarter last year. The strong results were bolstered by a jump in Berkshire’s insurance underwriting and investment income. Berkshire reported a near $26 billion unrealized gain from its investments as its gigantic stake in #Apple led the market rally in the second quarter. The tech giant soared nearly 18% during the quarter and Berkshire’s bet has ballooned to $177.6 billion. The “Oracle of Omaha” trimmed his Chevron stake by $1.4 billion to $19.4 billion at the end of June. Berkshire’s massive cash pile grew to $147.377 billion at the end of June, near a record and much higher than the $130.616 billion in the first quarter. Share repurchase activity slowed down as the conglomerate’s stock climbed back to a record high. The company spent just about $1.4 billion in buybacks during the quarter, bringing the year-to-date total to $5.8 billion. Link to CNBC article: $BRK Berkshire Hathaway Q2 FY23: • Segment margin 12% (-1pp Y/Y). • $AAPL Apple stake now worth $178B. • Stock repurchase $1.4B ($4.4B in Q1). • Cash and short-term securities $147B. Source: App Economic Insights, CNBC
Tavi Costa: "Brazilian equities have been attracting unprecedented levels of foreign capital investments, marking a fundamental shift since the global financial crisis
Net inflows from international investors over the past 50 days have reached historically elevated levels, maintaining a consistent upward trajectory over the last two years". Source: Tavi Costa, Bloomberg
Speaking from experience
Source: AZ Quotes
Shorting US 10y bonds seems to be one of the most crowded trades at the moment
Among the shorts, Billionaire investor Bill Ackman. To his opinion, if long-term inflation is 3% not 2%, the 30y Treasury yield could rise to 5.5%. In contrast, Warren Buffett has announced buying positions in 10y US Treasuries. Source: Bloomberg, HolgerZ
Is stocks leadership vs. commodities starting to roll over?
Source: J-C Parets
The Kobeissi Letter - Financial Events in 2023 So Far:
1. Mortgage rates pass 2008 highs at 7.2% 2. Credit card debt set to hit $1 trillion for first time ever 3. Regional bank crisis leads to 2nd and 3rd largest bank collapses in history 4. Fed raises interest rates to highest level since 2001 5. Debt ceiling crisis nearly leads to US default 6. US sees most bankruptcies since 2020 lockdown 7. Interest expense on US debt set to cross $1 trillion annually 8. Fitch downgrades US credit rating for first time since 2011 Yet, the S&P 500 is up an incredible 700 points this year. Is this the most resilient stock market in history? Source: The Kobeissi Letter
Consumer price inflation is creeping higher again on a month-over-month basis, driven in part by higher gas prices, according to the Cleveland Fed's forecast
Source: Lisa Abramowicz
Given the expensive level of stocks valuations (especially tech), there is little room left for bad news
Valuation ratios are bad timing tools but help assessing the downside potential. Source: Charlie Bilello
