US Stock Market
Warren Buffett Investment Failure?
Warren Buffett Investment Failure?
In the second quarter, Berkshire Hathaway's revenue was $76.18 billion, a year-on-year increase of 10.2%, slightly exceeding market expectations; operating profit was $9.28 billion, a year-on-year increase of 38.7%. However, due to huge losses in investments and derivatives, its net loss in the second quarter was $43.755 billion, compared with a net profit of $28.094 billion in the same period last year. Combined with the current changes in the global economic situation in the United States and Buffett's series of investment operations in the second quarter, there are many things worth thinking about.
The reason why Buffett has always insisted on investing with the American National Movement, and the United States is indeed because since World War II, although there have been several rounds of financial crisis and setbacks, the overall growth is indeed very strong, and American companies have not only enjoyed the local economy and technology for a long time. The various dividends of rapid development have also benefited from the global export of US dollar capital, and have enjoyed the greater dividends of the era of economic globalization. For example, nearly 70% of Buffett's current market value of holdings is concentrated in those global giants: Apple's domestic revenue in the United States is only a little over a third, and its global business is already the bulk (Europe accounts for 1/4, Greater China accounts for 1/4) The region accounts for nearly 1/5, and Japan and other Asia-Pacific regions account for about 15%); Coca-Cola's North American business only accounts for 1/3, and other international regions account for 2/3; Chevron's U.S. business accounts for 56% %, international business accounted for 44%; American Express's international business accounted for more than 20%, and Bank of America's international business accounted for 13%.
But it's worth noting that Buffett sold $2.3 billion of stock in the second quarter, spending only $6.2 billion on new stock purchases (mostly used to increase his holdings of Occidental Oil), compared to $51.1 billion in the first quarter. Buying and buying is a very obvious defense, and it even makes people feel bearish on the stock market. Buffett's operation, even if he is not bearish on the future stock market, is the default that the current stock market price is not cost-effective.
Looking at the current situation, there are 2 major characteristics of the global economic situation. First, after the United States took the lead in entering the rate hike cycle caused by the impact of the epidemic in 2020, the global economy has become more fragile, and more and more countries have reopened. Falling into recession, second, frequent geopolitical issues and intensified de-globalization have continued to impact economic development.
At of now, whether it is currency contraction or geopolitical tension, there is no possibility of a turnaround in a short period of time, which means that the global economy will still be under great pressure for a period in the future, which in turn means that these There are downside risks to the future business performance of global giants.
Buffett only invests in traditional fields that he is familiar with. He does not understand emerging fields, and it is difficult to adapt. Therefore, except for Apple, most of his holdings are in traditional fields, and he has greatly missed Amazon, Google, Microsoft, special Super growth companies such as Tesla and Nvidia. With the long-term steady growth of the U.S. economy and the increase in revenue brought about by inflation brought about by the long-term release of water, it is true that maintaining the leaders in those traditional industries can achieve stable and good returns, but the opportunity cost it misses in emerging fields is also huge.
If the stock gods are sufficiently adaptable to the times and their cognition is clear enough to spend a little more money to allocate emerging fields, then Berkshire Hathaway's market value will be much more than that, and even breaking through the trillion-dollar market value will be out of the question.
Louis Yap
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