No. of Recommendations: 39
As we know, Warren Buffett has built up a huge cash pile. Warren has been to said by many to be one of the markets best market timers as he has a history of being roughly in sync with getting out of the market ahead of market swoons and later taking advantage of market swoons. He has done this several times going back to the 1960s.
I have been playing the part of a general contractor in recent weeks in getting a property we had been renting to paying parties since 2010 ready to go on the real estate market this spring. This is my own form of market timing as my bride and I shrink our physical income paying assets into liquid assets. For you younger folks who may have not had the experience of dealing with a dead relative's properties, the physical stuff like cars, homes, land, boats, commercial properties and the like that are not liquid can require a lot of work. This is especially true if the relative were a pack rat, did not take care of their property and the like. Yes, a lot of work. At any rate, in my acting as a general contractor, I have been working with sub-contractors for painting, granite counter tops, new flooring, HVAC replacement, pressure washing and lots of other things to be done. In Central NC where I live, our public schools in our city are 57% Hispanic origin students according to the boxes they checked on their required forms. I cite this so you can get a quick take on my community. The majority of the contractors I am using (these are folks who own their own companies) are folks who have moved to the USA from Central or South America and have US citizenship. This week these contractors are separately telling me about Spanish speaking folks they know all around the USA who are not going to work for fear of being picked up and deported. One long time contractor and a personal friend told me of his two brothers and what they are seeing. One brother is in Salinas, California and is a field hand for berry farmers. He says no one is in the fields picking berries and vegetables this week. They are all staying in their abodes because they are afraid of being picked-up by ICE. His brother in Washington state gives the same story and says the winter pruning activities for the apple orchards has ceased for the same reason. Another person who I have long worked with told me of his relatives in Illinois, Texas and Florida who are not going to Walmart or other retailers because they are afraid to leave their homes. This same person told me of three of his friends in Florida who were working in the construction industry picked up and moved back to Mexico because of their illegal status concerns. My friend says there is a problem for these three gentlemen moving back to Mexico - there are no jobs available in Mexico. This is also concerning because if a large population of folks move back to Mexico and are unemployed, this has the potential to create unrest and who knows what else in Mexico, our neighbor country to the South.
The purpose of bringing this up is to say unintended consequences could put a big hurt on the US economy and to also jack up inflation in food prices, construction costs and more. This could lead to blood in the equity streets and an opportunity to buy stocks at much cheaper prices perhaps later in 2025. Could Warren have foreseen this last year when he was raising Berkshire's enormous cash pile?
Uwharrie
