🤑💸 Buffett Has Been UNLOADING Cash
Hello friends,
I hope you are doing well. Before we get into today’s newsletter, I wanted to take a moment to tell you how I’ve been feeling personally.
As you may (or not) know, I’ve been posting regular content on Tik Tok, YouTube, and Instagram for over 2.5 years now all with little to zero breaks. Honestly, I’m feeling a bit burnt out from it all - and I plan to take a vacation in a few weeks to recharge.
I do want to share with you that I find making content on money-related topics to be very fulfilling. Of course, there are multiple pressures that come with the job of creating content. The pressure to come up with ideas, the pressure to make engaging content, the pressure to stay relevant, all in order to keep the channels growing and to continue serving you.
It’s because of you that we are able to do this job and get compensated for it (mostly from brands for now). So I wanted to say thank you and that we will continue to evolve and get better at creating content that educates, entertains, and hopefully inspires you to take some action in your lives.
If you have any suggestions on where to go on a solo vacation, let me know by replying directly to this e-mail. Any comments on the newsletter are welcome too. I hope you have the most wonderful Wednesday and weekend.
- Humphrey, Rickie & Tim
In the Markets
Featured Story
Warren Buffett has been trigger-happy with the capital in his holding company Berkshire Hathaway. Several purchases and sales were made public on Monday in Berkshire’s recent 13F filing. The 13F is a form that institutional investors managing more than $100M are required by regulators to fill out which discloses the size and market values of their equity holdings at the end of the most recent quarter.
The recent filing showed that Berkshire bought 3.9M more shares of AAPL 0.00%↑ , making their stake worth $125B at the end of June and 40% of Berkshire’s total stock portfolio. Berkshire also bet big on U.S. oil, purchasing 22M shares of Occidental Petroleum OXY 0.00%↑ and 2.3M shares of Chevron CVX 0.00%↑ . They added to their stakes in Ally Financial ALLY 0.00%↑ and Paramount PARA 0.00%↑ .
Berkshire did not open any new positions but they did close out their stakes in Verizon VZ 0.00%↑ and Royalty Pharma RPRX 0.00%↑ while trimming their holdings in General Motors GM 0.00%↑ , U.S. Bancorp USB 0.00%↑ , and Kroger KR 0.00%↑ .
Berkshire’s five biggest holdings at the end of June were Apple, Bank of America BAC 0.00%↑ , Coca-Cola KO 0.00%↑ , Chevron, and American Express AXP 0.00%↑ , making up ~69% of Berkshire’s portfolio.
Warren Buffett has a reputation for being one of the most successful investors of all time and while he does not personally pick all of the company’s stock investments, investors closely watch what Berkshire chooses to buy and sell to draw as many insights as they can.
Throughout 2021, Buffett and Berkshire Hathaway largely stuck to sitting on their cash and repurchasing their own shares. As recently as February, Buffett lamented the lack of good buying opportunities to explain why Berkshire was mostly investing in their own stock. But given the recent market volatility in the back half of Q1 and Q2, Berkshire has been putting their cash to work, with particular favor for the energy sector following Russia's invasion of Ukraine which sent oil prices surging; moves that investors and analysts say reflect Buffett’s potential view that inflation in energy prices will remain elevated for some time.
While, for 90% of the population, a simple index fund that tracks the market will be safe and sufficient, it is always interesting to see what the best investors are buying and selling to gain some sort of insight as to what they think of the state of the economy.
Weekly News Roundup
Grocery Prices in July Had Largest Price Increase since 1979 (MarketWatch)
The price of food at home rose 13.1% year over year from last July, marking the largest price increase for groceries since 1979. While inflation seems to have peaked with July’s 8.5% coming in lower than 9.1% in June, the decline is being carried by lower prices in energy. Consumers are getting a break at the gas pump but not at the grocery store.
RH: Egg prices are up 38%, butter is up 26% and coffee rose by over 20% compared to a year ago. How wild is that?
TC: Hopefully food prices and home/rent prices will fall over the months to come. While it was amazing news to see inflation come down a bit, the “sticky” parts of inflation have yet to peak.
Berkshire Hathaway Keeps Spending Through Volatile Markets (WSJ)
Filings show Berkshire bought 3.9M shares of Apple making up roughly 40% of their stock portfolio ($125B stake in Apple). Berkshire also doubled down on its energy investments purchasing 22M shares of Occidental Petroleum and 2.3M shares of Chevron, betting big on U.S. oil. Additionally, they added to their stake in Ally Financial and Paramount while closing out stakes in Verizon and Royalty Pharma.
HY: Warren’s getting up there in age, not afraid to invest through thick and thin. We can all take a lesson from him and Berkshire — to keep investing.
OPEC Cuts Oil-Demand Forecasts as Economic Growth Slows (WSJ)
OPEC sees little need to increase output as they expect global oil demand will be weaker than expected this year and next as economic growth slows. The oil cartel expects global GDP to grow 3.1%, down from the 3.5% they forecasted last month. OPEC also cut its growth forecast for the U.S. economy to 1.8% from 3%. Forecasts for the next two years see ~100M barrels a day globally, down 260k barrels.
HY: Let’s go! Prices at the pump are still high though 🪦
Charts of the Week
Even though the S&P 500 grew sales by 15%, close to double its trend growth, most of that was driven by the Energy sector’s +77% YoY sales growth. After adjusting for inflation and excluding Energy, that 15.1% sales growth becomes just 0.9%.
In Case You Missed It
Check out my free Finance Tracking Template on Google Sheets here.
In the future, we’ll have a Notion Financial Tracking Template as well.
Also, be on the lookout for more “IRL” (in real life) content on YouTube.