No. of Recommendations: 2
should one not avoid, or put into the "too hard" pile, those organizations that might not survive a destabilizing leader?
To clarify, personally I was thinking of the US government (and by extension everything dependent on its functioning), not Berkshire. The entire US economy is now in the "too hard" pile for me. (as always, often a euphemism for too unpredictable or too risky or beyond the pale)
Yes, I know you were referring to the current US government and my point is only that it's hard to reconcile Berkshire sitting at an all time high with the extreme concerns that you and others have raised in this thread. Mr. Market is a collection of global market participants of all political persuasions and takes all risks into account. Mr. Market obviously knows that Berkshire doesn't exist in a vaccum and its fortunes are inextricably linked with the US economy. If it were true that US government and economy have materially taken a turn for the worse to the point where the US economy is "too risky or too unpredictable or beyond the pale", one would think Mr. Market would recognize this and assign a much lower price to Berkshire.
Same applies to the index. After gaining 26.29% in 2023 and 25.02% in 2024, YTD it's down 3.51% only! For all the sound and fury we hear about markets falling, not much has actually happened. Just a minor lowering of multiple on forward looking earnings where estimates have come down from 290 or so to 270. It's still a very rich 21 forward PE. Mr. Market certainly seems sanguine in sharp contrast to the mood in this thread.
Mr. Buffett also said in his annual letter, which was published after the current administration took office, that he will continue to invest in US businesses and that the US is still the best place to invest or something to that effect. Are we saying he just said it, but doesn't really mean it?
Time will tell who is right and who is wrong. Above is just an alternative perspective to those contemplating extreme actions! Maybe it's just minor turbulence and the plane will land. You are not going to crash and die!
Zooming out and looking at the big picture, everyone knows the US fiscal situation is on an unsustainable path. There are severe imbalances in trade between nations. Wealth inequality is serious issue in the US, but also globally. It's folly to think that business as usual can continue indefinitely in the face of these serious problems. One way or another these issues will get resolved, historically via different types of conflicts. Trade wars is actually a good way to go, if the alternative is actual wars.
