It is difficult for an ongoing business (or an investor) to go bankrupt without debt.
- Manlobbi
Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
No. of Recommendations: 7
Early days but fear is rising. VIX hit highest level this year today.
S&P 500 back to Aug 2024.
S&P 500 down 14% from peak on 19th February 2025.
I imagine Buffett is holding firm but watching with interest…
Thank you Jim for your ‘I’m out’ post mid March. That along with Buffett’s move to cash was very helpful personally!
No. of Recommendations: 7
Thank you Jim for your ‘I’m out’ post mid March. That along with Buffett’s move to cash was very helpful personally!
Me too, but it was coincidence so I won't take credit for prescience. It wasn't a bearish market signal that prompted me to exit, though perhaps synchronicity. (A didn't cause B, B didn't cause A, rather A and B were both caused by an unseen effect C...)
C stands for Chaos, perhaps? Coalitionlessness? Confrontation? Cold war?
Jim
No. of Recommendations: 3
Berkshire down 3.34% pre market is interesting. The YTD flight to the safety of Berkshire happened.
Sell Berkshire, with its relative tariff resilience and cash position, is a sign of growing fear. VIX now up 125% YTD.
We may only be 10% into the kind of disruption that would cause Buffett to phone his broker.
The counter tariff measures from Canada and now China is shaking confidence. Next up EU. Then we have Q2 reporting seriously weakened numbers later in the year. It could be an interesting summer and autumn.
I’m going to spend the next week reading financial statements and making sure I have the latest information on my investments. I might start to think about a mechanical approach to allocating cash. Research to build conviction.
What are your signs to get back into equities? Buffett buying would be an early sign. Defensive Berkshire down 50% would be interesting. Seems quite unlikely. But then again, when you consider how complex a challenge, it will be for companies to perform the kind of miracles being asked of them to bring manufacturing back to America. It does look like a policy mistake from above. The distribution will be incredible. And that’s just one of the problems the world now faces. Uncertainty creates fear and it looks grim for the foreseeable.
Keeping the vision of the late Charlie Munger, pulling his car over to phone his broker and going all in on Wells Fargo for DJCO at $9 per share, having patiently waited in cash for multiple years.
No. of Recommendations: 4
I placed a bet on 2/10/2025 that the S&P500 would hit big trouble within the next six months by buying 8/15/2025 put options strike 420. SPY was 603 and VIX was 15.8 at initiation. Sometimes called 'disaster puts'.
Below is a snippet from my Schwab account yesterday at close:
XSP 08/15/2025 420.00 P
Price $4.285 Price Change +101.17%
The +100% in one day is essentially due to the rise in VIX ('essentially' stuck in there to avoid pedantry). Quite impressive.
No, I'm not gloating, I didn't buy that many contracts, darn it!
I wasn't hedging my portfolio, I'm mostly out of the S&P, this was a side bet.
It says "XSP" and not "SPY" because I bought XSP options, which are S&P500 index options. Essentially the same behavior would be seen for SPY options.
Now to decide when to start selling them.
