🍏 Buffett ditched Apple

Warren Buffett sells shares in Apple, Japan has a bad day, and inside the world of chasing tornados | [Finimize](   TOGETHER WITH     Hi {NAME}, here's what you need to know for August 6th in 3:01 minutes.   🔥 Predicting the future is nigh on impossible, but we can prepare for different outcomes. So listen to the [Finimize Podcast](, where our very own Carl sits down with abrdn's chief economist to find out how the US election could impact financial markets. [Listen in to find out more]( Today's big stories - Warren Buffett’s been on a cleaning spree, ditching nearly $90 billion in stocks in the first half of this year - One expert says this is far from the end of short selling – [Read Now]( - Japan’s stock market indexes suffered their worst day since 1987 Everything Must Go [Everything Must Go] What’s going on here? Just before markets started to tumble, Warren Buffett [had]( a serious spring clean. What does this mean? Warren Buffett’s cash pile just got a whole lot bigger, as Berkshire Hathaway cut its Apple stake by almost 50% in the second quarter. Although, that’s not necessarily personal: Apple is still Berkshire’s biggest holding, and Buffett’s conglomerate has been offloading stocks for the last seven consecutive quarters. In fact, Berkshire shed $90 billion in stocks in the first half of this year, with $75 billion of that being cut loose in the last quarter alone. So it’s not just Apple in the crosshairs: the firm also trimmed nearly 9% of its stake in Bank of America, its second-biggest holding, since mid-July. Why should I care? Zooming out: Timing is everything. Buffett timed his trades well: the all-star investor was selling shares while the S&P 500 hit a record high in mid-July. Now, there’s no telling exactly what Buffett’s thinking – but the sale could suggest that he’s pessimistic about the world’s stock markets or believes AI initiatives have challenged Apple’s supremacy. And if he expects a changed climate to reshuffle the winners and losers, it wouldn’t hurt to have more cash on hand. The bigger picture: In… and out. Buffett’s sale might’ve given you a flutter in your stomach, especially with stock markets wobbling this week. But remember, you can’t trust one investor to shape your view – and even the Oracle’s trades don’t necessarily reflect his personal outlook. One thing’s clear though: Buffett’s not afraid to hold cash. So if you’re unsure where to place your bets, you could do the same and lock in risk-free returns. And because banks usually slash rates on savings accounts before a rate cut, now could be the right time to lock in rates for longer-term cash deposits. You might also like: [Buffett, Graham, and Klarman on how to invest in a recession.]( Copy to share story: [( 🙋 [Ask a question](mailto:questions@finimize.com?body=Ask us a question: Where are you writing from? Let us know and we'll mention it when we reply.&noapp=true&subject=Everything Must Go&utm_campaign=daily-global-06-08-2024&utm_source=email) Analyst Take Short-Selling Hedge Funds Are Going Extinct – But The Strategy Still Has Life In It [Short-Selling Hedge Funds Are Going Extinct – But The Strategy Still Has Life In It]( Short sellers bet on their conviction that a particular asset’s price will fall. They [borrow shares and sell them in the market](, hoping to buy them back later at a lower price to pocket a profit from the price difference. [Dedicated short-bias hedge funds]( are investment funds that primarily focus on this short-selling strategy, aiming to profit from declining stock prices. However, a series of challenges have pushed these [hedge funds to the brink of extinction]( – and that has important implications for the market and investors. So that’s today’s Insight: [what’s happening with short sellers, and why some could stick it out](. [Read or listen to the Insight here]( Bulls have horns for a reason Change might scare some of us – but it excites plenty, too. Case in point: when financial markets start moving as quickly as they are today, many investors take the opportunity to go against the grain or seek quick turnaround trades. That’s where [leveraged and inverse ETFs]( come in. The first lets traders amplify their high-conviction trades, while the latter lets traders bet on price dips without having to “short” assets. That means you could put a bigger bet on a market move or technical signal without accessing more capital. So if you’re a risk-tolerant trader, you’ll want to [find out how to use them safely and effectively](. Our free guide with Direxion – a platform that specializes in tools for decisive investors – has the lowdown: [discover how you could use leveraged and inverse ETFs to amplify your trades](. [Read The Guide]( See Direxion's disclaimers in their guide [here](. Case Of The Mondays [Case Of The Mondays] What’s going on here? Japan’s Nikkei 225 [tumbled]( 12.4% on Monday, the index’s worst day since the “Black Monday” of 1987. What does this mean? Japan’s benchmark indexes, the Topix and the Nikkei 225, have fallen more than 20% from their all-time highs on July 11th – that’s what some call a bear market. Meanwhile, the Japanese yen strengthened to its highest level against the dollar since January, rallying around 13% from its lows last month. So companies that sell a lot of stuff abroad have been hit pretty hard in the sell-off, as their profits are weakened by the stronger yen. Why should I care? For markets: We’re all in this together, Buffett. Borrowing yen to invest in currencies and assets that offer higher returns has been popular with investors. Even Warren Buffett borrowed to help pay for his investments in Japanese trading companies. But when the yen picked up, some investors scrambled to buy the currency and sell stocks to unwind their positions – and that evacuation pushed Japan’s stock market down low, and fast. Even the legendary investor has been burned, with those five trading firms falling more than 15% on Monday. The bigger picture: This is a test of self-restraint. Now it’s true, investors could steal a deal by buying stocks during heavy sell-offs. As Buffett says, “Be greedy when others are fearful”. But that’s a seriously risky play: timing your purchase can be impossible when investors are panicking and markets are in freefall – it’s sometimes referred to as catching a falling knife. So while it’s not very Wolf of Wall Street, dollar-cost averaging – investing a fixed amount on a regular basis, regardless of share price – would be a less volatile way to build stakes while prices are low. You might also like: [Why Japan’s stocks are suddenly more volatile](. Copy to share story: [( 🙋 [Ask a question](mailto:questions@finimize.com?body=Ask us a question: Where are you writing from? Let us know and we'll mention it when we reply.&noapp=true&subject=Case Of The Mondays&utm_campaign=daily-global-06-08-2024&utm_source=email) 💬 Quote of the day "Believe you can and you're halfway there." – Theodore Roosevelt (the 26th president of the United States) [Tweet this]( Take a seat on the Summit’s main stage Thousands of retail investors tuned into our [Modern Investor Summit]( sessions last year. Eager to discover the smartest tools and savviest tricks, they piled into fireside sessions, Q&A panels, and keynote speaker slots with the likes of Jamie Dimon. Now’s your chance to secure a spot at the next one. Our [Summit]( is slated for December this year, and we’re on the lookout for speakers with big ideas and serious know-how. 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