Techquity
Technology Investor, Fundamental Research
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 offers the business durability that matters most, through insurance, especially reinsurance, physical infrastructure and its holdings portfolio, while lowering portfolio volatility. It is preferred over FICO, which remains a great company with mid-term upside but has mostly conquered its TAM, relies on price increases for growth, faces a worrying regulatory environment and has an unclear moat in the SaaS segment it needs for future growth. 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 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 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 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 a hedge against the market in current conditions, not a vehicle to beat it, which explains its nearly $400B in cash and treasuries. 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 is built for long-term survival rather than maximum returns, earning a Risk Shield rating of 95/100 that puts it in the top 5% of stocks globally. Growth is average and quality only slightly above average, but the balance sheet holds a record $397 billion of cash, 31% of total assets, with negative net debt, low beta and low volatility. 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
Berkshire Hathaway's recent bets show impressive mental dexterity, but they are still small dollars for a company its size. It bought Alphabet above its long-term average multiple, at more than twice its price of a year earlier, perhaps the highest multiple Berkshire has paid for an investment that size, apparently betting on good returns from roughly $200B of growing AI capex. It also bought Delta despite Buffett calling airlines a mistake after COVID. x.com x.comÂ
Berkshire Hathaway's contrarian case rests on cash and diversified businesses, but its immediately distributable cash is closer to ~$179B than $300B. A key open question is whether its insurance subsidiaries are accumulating correlated risks that could produce a simultaneous worst-case loss, though Buffett and Jain are presumably on top of it. The case still includes businesses largely outside the AI paradigm, hard assets like power and rail with rising AI demand, and poor sentiment. x.comÂ
