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Additionally, I believe that in the past few days I read an article reporting that Berkshire had significantly cut back it's investments in Apple, but I'm unable to locate that source at this time.The billionaire Warren Buffett added two more big, American brands to Berkshire Hathaway Inc.’s investment portfolio.
Mr. Buffett’s conglomerate has purchased $8.6 billion in stock in Verizon Communications Inc., the largest U.S. mobile carrier, and $4.1 billion in Chevron Corp. according to a snapshot of investments held in the quarter ended Dec. 31.
In 2020, Chevron had its worst year since 2016, and Verizon’s fourth-quarter profit fell after it booked higher costs and gained fewer new customers than usual.
It isn’t clear whether Mr. Buffett made the decision to invest in the two firms or if the decision was made by Berkshire money managers Todd Combs and Ted Weschler. The two are expected to take over all of Berkshire’s investments once Mr. Buffett is no longer in the top job.
Berkshire adjusted some of its drugmaker investments bets. The conglomerate sold off its $136 million investment in the Covid-19 vaccine maker Pfizer Inc., while increasing stakes in the pharmaceutical brands AbbVie Inc., Merck & Co. and Bristol Myers Squibb Co.
It also continued to cut back from financial firms, selling off its remaining $93 million investment in JPMorgan Chase & Co., and whittling away at its stake in Wells Fargo & Co. by $1.4 billion.
Last year Berkshire Hathaway sold stakes in airlines, including United Airlines Holdings Inc., American Airlines Group Inc., Delta Air Lines Inc. and Southwest Airlines Co. Mr. Buffett said he thought consumer behavior regarding travel had changed for the long term.
Frenzied trading in the shares of GameStop and other companies will be the subject of what is expected to be a fiery hearing in Congress on Thursday, when US politicians get their first chance to quiz executives from the trading app Robinhood, Reddit and other players in the saga.
The House financial services committee will hold a hearing at noon in a first step to untangling the furore surrounding trading in GameStop, AMC cinemas and other companies whose share values soared to astronomical levels as small investors piled into the stocks.
Shares in GameStop, a troubled video games chain store, soared 1,600% in January, as an army of small investors, many using the trading app Robinhood, appeared to have bet that Wall Street hedge funds had overplayed their hand when betting the stock price would collapse – a practice known as short-selling. Spurred on by meme-toting members of the Reddit forum WallStreetBets, investors kept buying the shares, driving up the price and triggering huge losses for some hedge funds.
Robinhood briefly suspended trading in GameStop and other hot stocks at the end of January and sparked allegations that the hedge funds and others may have pushed Robinhood and other trading platforms to stop the rout.
Among those testifying are: Robinhood’s CEO, Vlad Tenev, Reddit’s CEO, Steve Huffman, Gabe Plotkin, founder of the Melvin Capital Management hedge fund (which was forced into a rescue after retail traders crushed its bets against GameStop), Ken Griffin, billionaire CEO of Citadel, an investment firm that executes Robinhood clients’ trades and also helped to bail out Melvin, and Keith Gill, a trader variously known online as "Roaring Kitty" and "DeepFuckingValue" and a longtime GameStop booster.
The associate director for economic policy at the Center for American Progress, said: “The GameStop drama raised quite a few public policy questions but first it’s important for members of Congress to understand how events played out.”
More broadly, he said, GameStop had highlighted many crucial issues for regulators, including the role and regulation of hedge funds, whether or how Wall Street is using social media to drive investment strategy, the “gamification” of investing by trading apps and the economic incentives at play for the trading platforms.
“What would have happened if Robinhood had failed? What would have been the knock-on effects for financial markets?” he asked. “These are huge investor protection questions.
The hearing will not be the last inquiry that the executives at the center of the controversy will face. Federal prosecutors have begun an investigation, according to the Wall Street Journal, and the Securities and Exchange Commission, the US’s top financial watchdog, is reportedly combing through social media posts for signs of potential fraud.
In the meantime, evidence has emerged that small investors were not the largest buyers of GameStop and other hot companies. According to an analysis by JP Morgan, institutional investors may have been behind much of the dramatic rise in the share price: “Although retail buying was portrayed as the main driver of the extreme price rally experienced by some stocks, the actual picture may be much more nuanced”.
Financial Literacy ??? Is this the question related to "money" as a verb or just a random thought placed in this thread?Is it me or is there something unsavory sounding to the word "money" as a verb? It makes it sound like money is something you do instead of something you earn through work.
https://learntomoney.org/With incredible support from GoFundMe backers, we created the pilot episode of a 10-part video curriculum that teaches the basics of financial literacy with a fresh voice.
It is accompanied by a curriculum website and PDF handout for classrooms. See all the pilot materials here.
https://www.troweprice.com/financial-intermediary/be/en/thinking/articles/2020/q4/global-market-outlook-managing-other-side.htmlThe financials and energy sectors could offer particularly attractive shorter‑term value opportunities in 2021, according to Giroux:
Financials: Steepening yield curves have improved net lending margins, and the reserves set aside to cover expected pandemic loan losses appear to be larger than needed, Giroux says. European banks appear especially cheap based on price/book value multiples, Thomson adds.
Energy: A broad collapse in capital spending should reduce excess oil and gas supplies, potentially supporting prices, Giroux predicts. An easing of the pandemic could boost travel in 2021, reviving demand. However, the longer‑term outlook for traditional fossil fuel producers remains challenged by renewables and regulatory pressures.
Yes. Your statement is a worthy reflection and result of one's efforts. At times there is a lot of work and effort placed towards being "lucky". Our "lucky" has kept us invested in U.S. equity and bonds since the financial melt of 2008. We've avoided, by choice; other global equity/bond markets. We have no complaints. But, things/trends change for a variety of reasons; not unlike the close watch now of the recent deterioration of favorable bond pricing. Is the current trend of rising yields a blip or what?My standard retort is, " I believe that people tend to create their own 'luck'."
On Holdings:... if you're going to take duration risk, take duration risk in your equity sleeve, not in your fixed-income sleeve. Duration risk in equities is really cheap, given how attractive utilities are priced today relative to investment-grade or Treasuries
TRP's Floating Rate Fund = PRFRXBut you can't outperform by 400 basis points a year or 300 basis points per year if you have 100 stocks. It's very, very hard to do that. You really need to be a little more concentrated.
I think what drives in many respects the multiple companies is a little bit supply and demand. So, the reason why this 13% of the S&P 500 that I call GARP, trades where it does, and it should trade higher, is that a value manager will often look and say, Well, these companies, they trade for 10% or 20% premium to the market, that’s too expensive, so I can't invest in those stocks. Growth manager says, you know what, these companies, they're only growing organically like 4% or 5% organically. I want to own companies that are growing 10% organically.
So, in many cases, there's no natural buyer for these companies. So, that depresses their valuation to a level where, again, if you think about the market, the market, typically, in non-recession years, grows earnings at 6% to 7% kind of clip, gives you a 2% dividend yield. So, for a small premium to that, which you'd able to generate, is find the companies that are growing earnings at 10% plus, maybe a little bit more dividend yield, and have much less downside risk, because there's an inefficiency. The two big market participants kind of shunned these companies a little bit. So, what happens is, over time, they just compound wealth, and in many cases, the market becomes a little bit smarter over time and says, Oh, it used to trade for 18 times earnings, but it's actually a really good company, and you should trade for 20 or 21 times or 22 times. So, you get the compounding of the earnings and the dividend and usually, like the multiple expands.
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