Thierry from arvy
CFA, Co-Founder & CIO of arvy, Quality Investing
Berkshire Hathaway is starting a breakout as the summer rotation out of tech into value begins, and its record cash pile was a loaded gun waiting for this moment. After two years going sideways, the chart is coiled at the top of a five-year run. Rotation is a healthy breather before the next leg: value leads through October while tech rests, then both push together toward the S&P 500 at 10,000 and Nasdaq 100 at 40,000 by 2028. x.comÂ
Berkshire Hathaway is a hedge for a tech-heavy portfolio against a tech correction, an oil shock or an inflation spike. It offers defensive exposure to insurance, energy and rails, a cash pile of over $350 billion that makes it an optionality machine, and a culture of discipline and compounding that should outlast Buffett. Possible bad surprises from the Iran conflict make that protection worth having during inevitable rotations. x.comÂ
Berkshire Hathaway benefits from a flight to low-beta quality stocks that are not burdening themselves with AI debt. Its shares are up 10% in October, while three of its largest holdings, Apple, Coca-Cola and Chevron, have been surging. Boring pays. x.comÂ
Berkshire Hathaway will be remembered as a dinosaur because the age of value investing is gone. By the end of 2027, 20 other companies will be bigger than Berkshire. Per Kalshi, it now holds more cash than at any point in its history. x.comÂ
Berkshire Hathaway is an attractive hedge against speculative holdings because its fortress balance sheet gives it optionality either way. If markets do well, it cruises with existing assets and collects yield on its cash. If markets drop, it can buy the dip like no other. x.com x.com x.com x.comÂ
Berkshire Hathaway is hard to call expensive: about $400B of cash and $300B of stocks mean a roughly $1T valuation pays only about $300B for the railroad, energy, insurance and operating businesses. Its insurance float is a massively underestimated source of cheap capital, and the cash is a call option on future chaos, letting it write huge checks when markets panic. Greg Abel understands its culture. Whitney Tilson, quoted via @kejca, expects it to beat the S&P 500 over five years. x.com x.com … Show more
Berkshire Hathaway risks another five years of returns decimated by big tech, which is too strong. Greg Abel should study Jensen Huang every day, or it will come at great cost to shareholders. Berkshire is more than an insurance company now, and missing Google and Amazon, which it has acknowledged as mistakes, was bad in the long run, not just the short run. x.com x.com x.comÂ
Berkshire Hathaway is not a company to bet against after a strong Q2. Investment gains nearly tripled year over year, from $6.36B to $16B, net income more than doubled, and buybacks jumped from under $300M last quarter to $4.5B. x.com x.comÂ
JPMorgan Chase and Berkshire Hathaway are the preferred ways to diversify away from speculative tech, thanks to their fortress balance sheets and relentless execution. x.comÂ
A mix of Marvell, Broadcom, Amazon and other Big Tech is likely to outperform Berkshire Hathaway with relatively low risk in the years ahead, extending Berkshire's heavy underperformance versus a basket of Big Tech. x.comÂ
Berkshire Hathaway's return to net stock buying makes bearishness hard to justify. It beat earnings, repurchased $4.5B of its own shares and was a net buyer of about $20B in stocks, ending 14 straight quarters of net selling. x.comÂ
