A worrying divergence...
Source: J-C Parets
Should you sell your Apple because Buffet has been selling 50% of his Apple ($AAPL) shares?
Well, think twice. Buffett sold his entire Mcdonalds ($MCD) stock in 1998. Since then, MCD has increased +1,413%, outperforming Berkshire Hathaways returns. Buffett sold his entire Costco #($COST) stake in June 2020. Since then, COST has gained +190%, outperforming Berkshire as well. Buffett also sold all his stakes in airline stocks like Delta Airlines ($DAL) in March 2020. Since then, DAL is up +82% as well Lesson? Don't copy paste what other investors are doing, no matter how great they are. Source: Adam Khoo on X
The Goldman US panic index is calculated as a rolling percentile of four equity volatility metrics
It spiked to one of the highest levels in two years in recent sessions... Source: Jason Goepfert on X
Even as volatility is picking up, the bull market could stay intact.
Going back to 1941, whenever the S&P 500 rose by 10% or more in the first six months of the year, it has risen by 7% on average in the second half. And the percentage of time that returns were positive in the second half of the year was almost 80% vs. 66% for any given period. The one caveat is that pullbacks in the second half tend to be deeper than the first half, averaging 9%. Source: Edward Jones, Bloomberg
The S&P 500 is down 5.7% from its closing high on July 16, the largest drawdown of the year.
The index is still up 13% year-to-date including dividends. No risk, no reward. $SPX Source. Charlie Bilello
Berkshire Hathaway’s cash pile swelled to a record $276.9 billion last quarter as Warren Buffett sold big chunks in stock holdings including Apple
The Omaha-based conglomerate’s cash hoard jumped significantly higher from the previous record of $189 billion, set in the first quarter of 2024. The increase came after the Oracle of Omaha sold nearly half of his stake in Tim Cook-led tech giant in the second quarter. Berkshire has been a seller of stocks for seven quarters straight, but that selling accelerated in the last period with Buffett shedding more than $75 billion in equities in the second quarter. That brings the total of stocks sold in the first half of 2024 to more than $90 billion. The selling by Buffett has continued in the third quarter in some areas with Berkshire trimming its second biggest stake, Bank of America, for 12 consecutive days, filing this week showed. For the second quarter, Berkshire’s operating earnings, which encompass profits from the conglomerate’s fully-owned businesses, enjoyed a jump thanks to the strength in auto insurer Geico. Operating earnings totaled $11.6 billion in the second quarter, up about 15% from $10 billion a year prior. $BRK Berkshire Hathaway Q2 FY24. • Stock repurchase $0.3B. • $AAPL stake cut by nearly half. • Segment margin 14% (+2pp Y/Y). • Cash and short-term securities $277B. Source: App Economy Insights, CNBC
JUST IN: Over $2.9 trillion has been wiped out from major indices and stocks this morning due to growing fears of a global recession.
This is the worst day for stocks since March 16, 2020, during the COVID-19 pandemic fears. Source: Jacob King, Bloomberg
Almost all Japanese stock gains for 2024 wiped out in 3 days...
Today was an absolute chaos in Japan as stocks plummeted more than 6%, the largest decline in 8 years, and experienced 2 circuit breakers during the session... What will the BOJ save first? The Yen, Japanese stocks or the JGBs (of which they already own 50%)? Source: www.zerohedge.com
