Berkshire vs The World 💰

🔍 Warren Buffet just filed Berkshire’s 13-F—Here’s the scoop. February 21, 2024 | Peel #651 Silver Banana goes to... [The MBA Tour. ]( In this issue of the Peel: - 🔍 Warren Buffet just filed Berkshire’s 13-F—Here’s the scoop. - 🤖 Chip stocks might be seeing some take profit… you buying? - 💳 Discover Financial and Capital One are getting hitched! Or are they? Market Snapshot 📸 Banana Bits 🍌 - The global financial stress index has reached its least stressed level [since C-19 showed up]( - Palo Alto Networks shares are down as much as the residents of that town wish that crime rates would be on [lower guidance for Q1]() - It takes talent to create a [new kind of insider trading](, but that’s just what Oric Pharma’s Matt Panuwat did - Corporate America hit a [new record](=) in cash held last year The MBA Tour Spotlight on Black, Hispanic, and Native MBAs The MBA Tour Spotlight on Black, Hispanic, and Native MBAs is here to give you exclusive access to top business schools from around the world all in one place! Best of all, it's FREE! 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[Sign Up Now]() Macro Monkey Says 🐒 13-F Reasons Why Here’s a challenge for you apes to kickstart this beautiful Wednesday—please identify any and all differences you see in the two images below: Trick question—they’re actually the exact same image. For decades, Wall Street’s most listened-to silver fox wasn’t our homie, Fed Chair JPow, but the combination of Warren Buffet and Charlie Munger crackin’ jokes and dropping wisdom. For the first time, however, 2024 will leave Waldorf, -I mean, *Warren, alone at this year’s Berkshire Hathaway shareholder meeting. Once again, RIP to the GOAT that is Charlie Munger, but it turns out Buffett’s still got it. What Happened? Earlier this week, Buffett and the Berkshire team filed their latest 13F—a document required by the SEC for institutional investment managers with over $100mn in AUM. Managers must disclose all of their equity holdings within their portfolio on a quarterly basis, and we just got the latest from the best to ever do it. Time to dive in. Q1 of 2024 will be the first quarter since 1978 that Buffett is flying without his co-pilot, Charlie. Unlike the Fed, however, their goal isn’t a soft landing of this plane but to keep it flying high forever. Needless to point out, Buffett’s 13F is one of the most-watched documents on Wall Street as market watchers far and wide get to see the moves made by the GOAT. [Source]() Clearly, Berkshire has done well. But over the past few years, one company has led that charge more than any other… Apple is—and has been for a long time—Berkshire’s single largest holding. In fact, it’s so large that $AAPL makes up nearly 50% of the firm’s ~$342bn publicly traded investment fund. With a fat $160bn YOLO into Apple, that gives Berkshire ~5.7% ownership in the world’s second most valuable company (after Microsoft). However, in Q4 of 2023, Buffett shocked the nation and apparently began to trim his position in Apple. Now, Buffett only sold a measly little 10mn shares, roughly the same amount that I eat for breakfast, and now has only ~905mn shares in the firm. Apple shares are down 5.7% since closing out 2023, which is ideal for Berkshire but probably has nothing to do with why Berkshire sold. When a position gets so large, it’s not uncommon for managers to reduce exposure and decrease the idiosyncratic risk. So, while it’s not immediately clear what led to Buffett’s decision to trim Apple, we don’t expect to find a note explaining 13 Reasons Why, just the 13F. What Else Happened? At $350bn, obviously, Berkshire’s portfolio isn’t limited to just the King from Cupertino. Buffett also trimmed his position in HP Inc in the last quarter as well. Considering HP is basically Apple’s little brother at this point, it’s understandable why. Positions were added in names like Occidental Petroleum, Berkshire’s latest favorite child, along with Capital One. DJ Khaled has never been as good of a hype man at any point in his career as Buffett has been with Occidental. The holding company now owns ~28% of the oil producer, with Buffett calling CEO Vicki “an extraordinary manager” for the company. The Takeaway? Perhaps the most notable aspect of Berkshire’s 13F is something we haven’t even mentioned yet—straight cash, homie. Berkshire hit a record level of cash at ~$158bn in total at the end of the quarter. The lack of allocation of a cash pile larger than the GDP of most economies could be the most notable takeaway as it suggests Buffett sees no “fat pitches” in the market now. We all know Buffett’s got patience, so he’s in no rush to deploy that capital. But we also know that if he thought it at all possible to outperform the 4.5%-5% return that cash pile is seeing, it’s gonna have to be a damn good opportunity. If even Warren Buffett doesn’t know what to do with his cash, maybe it’s okay that none of us know what the hell is going on, either. Not that we ever do know what’s going on, but maybe someday… and maybe someday, having $157bn in cash will be a problem for us too. What's Ripe 🤩 Vizio Holdings (VZIO) 📈16.3% - A lot of tech companies dream of getting bought out by Google, Amazon, or another behemoth. One company that never crosses their minds? Walmart. - But that’s the reality for Vizio as the world’s largest retailer announced plans to purchase Vizio for $2.3bn in order to grow their ad business. - Ads are high-margin. Retail—especially Walmart—is not. Increasing the split of ads in their revenue mix should pad margins and already have investors pumped (WMT, +3.2%). Barclays (BCS) 📈12.2% - Like the eagle in their logo, Barclays shares soared on Tuesday. It’s not that they’re doing anything great, but they’re planning to be less garbage. - A slew of announcements came from the British-based bank, including a plan to divide the firm into 5 units that will drive $2.5bn in expense reductions. - At the same time, $12.66bn in share buybacks were announced, with all of these changes expected to be completed by 2026. What's Rotten 🤮 Chip Stocks (PHLX) 📉1.6% - Leading up to Nvidia’s earnings today, chip stocks sold off as the king is now the [most traded stock]( in the world. They’re learning the spotlight gets hot. - Analysts increased their price targets for the firm on Tuesday, with one slapping a $1,050 target on this thing. But, profit-taking could be at play. - Nvidia’s earnings could be the most significant market release of 2024 so far, so it’s no surprise to see traders getting antsy in the lead-up. We’ll find out soon… Caterpillar (CAT) 📉2.5% - A deer would smoke a caterpillar in a fight—I’m like 98% sure of that. Wall Street agrees, too, seemingly preferring Deere to Caterpillar going forward. - Shares in the latter sold off on a downgrade from Evercore analysts who (rightfully so) prefer Deere’s green machines to Caterpillar's yellow ones. Oh yeah, and earnings are falling, too. - Earnings are down for both industrial makers in 2024, but the belief is Deere is “further along in its down cycle,” according to Barrons. = Thought Banana 🤔 Capital One’s Big Discover(y) Christopher Columbus, Sir Isaac Newton, and Dean Whitter Reynolds—what do these three have in common? That’s right, they’re all responsible for some of history’s most important discoveries. Now, you might not know the third guy on that list, but as of yesterday, his discovery was valued at ~$35.3bn. And that discovery, of course, was Discover Financial Services—spun out of Sears in 1993, if you can believe it. Now, it’s getting spun back in, just somewhere else. “I Do” Late Monday evening, news broke that Discover Financial was in talks to be acquired by none other than Capital One Inc. These are two of the most dominant credit card issuers in the United States already, and as expected, the proposed merger already has the usual suspect up in arms. One of the most notable… [Source]() Senator Lizzy W and the rest of the “I couldn’t find Wall Street with a GPS” crowd are already looking to block the deal, so it clearly has a long way to go. Consolidation can lead to increased prices as a result of reduced competition, but in a market as plentiful as credit is in the United States, the threat of higher fees and rates doesn’t immediately set off alarm bells for us. The Deal If the deal gets consummated under the original terms, Discover shareholders will receive 1.0192 shares of Capital One for each Discover share they hold. That translates to a ~26% premium as of Monday’s close. Shares in Discover surged over 12.6% on the day, reflecting the market’s hype about the deal along with doubt about its actual completion. But arbitrage certainly exists for you apes enough to eat it up. Capital One stock rose on the day as well, but barely, gaining just 0.12%, after losing over 4.6% by the open from Monday’s close. Shareholders and traders alike both seem relatively pleased on both signs of the dotted line. However, we’ll be damned if the deal sails through regulatory waters without at least some risk of capsizing. If Lizzy W is already upset, I can’t even imagine how Lina “L” Khan is feeling over at the FTC. Stay tuned. 💭 The Big Question 💭: Will Discover and Capital One be allowed to merge? If so, will it go through in its current form? What other acquisitions should we be on the lookout for? Banana Brain Teaser 💡 Yesterday 🗓 In a certain medical survey, 45 percent of the people surveyed had the type A antigen in their blood and 3 percent had both the type A antigen and the type B antigen. What percent of those with the type A antigen also had the type B antigen? Answer: 6.67% Today 🕐 On a certain transatlantic crossing, 20 percent of a ship’s passengers held round-trip tickets and also took their cars aboard the ship. If 60 percent of the passengers with round-trip tickets did not take their cars aboard the ship, what percent of the ship’s passengers held round-trip tickets? Send your guesses to vyomesh@wallstreetoasis.com Wise Investor Says 🤓 “We're seeing a trend of industry consolidation across various sectors, driven by the pursuit of efficiency, cost savings, and market dominance” — Christine Lagarde How Would You Rate Today's Peel? 😁[All the bananas](=) 😐[Meh](=) 😩[Rotten AF](=) Happy Investing, David, Vyom, Jasper & Patrick [ADVERTISE]() // [WSO ALPHA](=) // [ACADEMY]() // [COURSES]( // [LEGAL](=) [Unsubscribe]( IB Oasis Corp. (aka "Wall Street Oasis") 20705 Saint Charles St Saratoga, California 95070 United States (617) 337-3353