To this thread subject let’s add how there have been times when the US economy has made a sudden move upon hearing or seeing a pronouncement or action by the government’s leadership. Example: Gerald Ford gave a speech to the Future Farmers of America convention in the fall of 1975. He made a point about Americans needing to “bite the bullet”. This set off a sudden drop in the economy as folks stopped buying cars, TVs and other US manufactured big ticket items. This all aligns with Cialdini’s book, “Influence” as Social Proof movements in the larger population. I was a twenty something when Ford made the speech and the Fortune 500 company where I was employed had layoffs two months later because a sudden drop in sales of our consumer disposable products. Just saying history shows how Newton’s Law of Actions & Reactions coupled with human instinctive Social Proof programming can quickly wallop a strong economy.

Maybe some of the quality companies I’ve been researching the last two years will drop down by 30% to the Buffet 10:1 pre-tax to market cap ratio zone. I’d sure love to get a 4% dividend and a rise back to a normal PE via purchasing at a blood in the streets valuation to snag several beautiful companies with respectable moats currently selling at slim/no margin of safety PE ratios.

One more aspect to consider - Michael Burry and others have made comments about how the system has limited size/number of exits should the regime of net positive inflows to indexes go tidal and go net negative (outflows)in a high volume manner. With active funds now having little or no funds available to swing in to scoop up bargains, even Buffett’s 400 B will not fully offset the market retrenchment.

Maybe this leads to Buffet’s last big investment opportunity set.

Interesting and potentially advantageous to us investors with cash and intestinal fortitude.

Uwharrie

Uwarrie

Berkshire Hathaway FAQ

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