Weekend Wall Street #32 - Futures Plans, Catalysts, Top Trades, and Short Interest Numbers
By continuing to read, you agree to the disclaimer at www.aditdayal.wix.com/disclaimer.
Good evening everyone and welcome back to the weekly newsletter. On Friday, we got the Fed’s preferred inflation economic indicator, the PCE number, and it was hotter than the market had expected. Obviously the market didn’t take this well and the S&P 500 closed the day -1%.
Buffet’s Annual Letter
This weekend, Warren Buffet’s Berkshire Hathaway released their annual letter to shareholders with some key lessons about investing.
I read through it and I am going to share some of the key lessons that we can take from it below.
He attributes his success to one secret, which seems to have been true in my trading as well:
“Our satisfactory results have been the product of about a dozen truly good decisions – that would be about one every five years – and a sometimes-forgotten advantage that favors long-term investors such as Berkshire”.
A few good decisions have covered the losses of his bad ones by a huge margin, and without those good decisions, he’d be a very average investor.
He also mentioned his view on share buybacks and he stated that when the company buys back shares at attractive prices they are beneficial to current shareholders, but if a company is overpaying for shares, the only person benefitting is the shareholders who are selling, or the investment banker who recommended buying it there.
He has put another $2.6B of his cash to to repurchasing $BRK.A shares.
The last thing was that h assured investors that Berkshire will always keep a boatload of cash, no matter whom the company is being managed under next.
To recap:
Let your big winners carry your portfolio.
Share buybacks are only beneficial to shareholders when the company does it at attractive valuations, otherwise be weary.
Always keep some cash on hand!
Let’s take a look at some upcoming catalysts for this week:
Very light week in terms of economic data. This is good because we may be able to see more smooth action.