I'm NOT a Warren Buffett fan, but two day's ago ...

[ph1l]

???

He's probably referring to
https://www.fool.com/investing/2024/02/23/warren-buffett-doesnt-own-bitcoin-but-his-company/

Warren Buffett Doesn't Own Bitcoin, but His Company Is Betting $1 Billion on This Crypto Stock
By Ryan Vanzo – Feb 23, 2024 at 7:10AM
KEY POINTS

• Buffett has long disliked Bitcoin, but that doesn't mean his lieutenants at Berkshire Hathaway feel the same.
• Berkshire currently has a $1 billion position in Nu Holdings, a stock that benefits from rising cryptocurrency adoption.
• Investors looking for stocks with big long-term potential should take a closer look.
• 10 stocks we like better than Nu Holdings

NYSE: NU
Nu Holdings

Market Cap
$63B

Today's Change
(0.30%) $0.04
Current Price
$13.25
Price as of July 11, 2024, 4:00 p.m. ET



Nu Holdings is a high-growth fintech stock with a strong exposure to the rise of cryptocurrencies.

Warren Buffett has made his dislike for Bitcoin known over the years. "In terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending," he said in 2018 . At the time, Bitcoin was priced at about $15,000.

Today, Bitcoin's value has soared above $50,000. Yet Buffett hasn't changed his tune. Even if someone offered him all the Bitcoin in the world for $25, Buffett said, he wouldn't take it. "Because what would I do with it?" he asked. "I'll have to sell it back to you one way or another. It isn't going to do anything."

There's an exception to every rule. Buffett doesn't like Bitcoin, but that doesn't mean his holding company, Berkshire Hathaway (BRK.A 1.06%) (BRK.B 1.21%), dislikes it.

Berkshire now has a market cap of almost $900 billion, and Buffett has many experienced advisors helping him manage its sprawling portfolio. Either he or one of his advisors, it seems, loves one stock in particular, enough to make a $1 billion bet on it. That stock is heavily exposed to the rise of cryptocurrencies, Bitcoin included.

Riding the Bitcoin wave
There's an old adage during gold rushes: Don't chase the gold, sell pickaxes -- you're sure to profit whether gold is discovered or not. This is exactly the strategy Nu Holdings (NU 0.30%) is following when it comes to profiting from crypto.

In 2013, Nu took the Latin American banking industry by storm under the name Nubank. The pitch was simple: For too long, the region's banking industry had been controlled by a handful of powerful players that used their market dominance to charge customers high fees for simple services.

Born as a digital-first bank, Nubank began offering low-cost financial products like bank accounts, credit cards, and personal loans to anyone with a smartphone or computer .

Latin America's appetite for low-cost and easy-to-use financial products proved overwhelming. In 2014, for example, the bank had almost no customers. That figure has grown every quarter since, surpassing 90 million in 2023 . Amazingly, more than half of Brazil's adult population are now Nubank customers.

Nubank has done a terrific job adding new financial products as customer growth has taken off. That way, the company benefits not just from a rising customer count, but also from those customers using an increasing number of products.

When Nubank was launched, the average customer was using only one of its products -- the only product the bank was offering at the time. Today, new customers start with an average of three financial products, a number that only grows the longer they are with Nubank .

One of those new products is Nucripto, introduced in 2022, which allows Nubank users to buy, sell, and transact in more than a dozen cryptocurrencies, Bitcoin and Ethereum included. In its first month of operation, Nucripto gained more than 1 million active users .

Nubank is still early in its crypto growth. It is rolling out its own digital currency, Nucoin, and continues to add new cryptos to the platform, including Polkadot and Avalanche .

The company still makes most of its money from other financial products like credit cards, insurance policies, and traditional investment accounts. But it has a leading position in Latin America's crypto market, with more than 1 million active users and a platform that grows stronger every quarter.

SOURCE: NU HOLDINGS.

A classic Buffett stock?
While Buffett avoided technology stocks for decades, he has a long history with banks. Berkshire Hathaway owns stock in Bank of America and Citigroup, for example, and it owned Wells Fargo stock for years.

In many ways, Nubank is a classic Buffett stock. The company was founded by David Velez, a former venture capitalist with experience at Sequoia Capital. Besides an experienced founder, Nubank also has a strong economic moat. Competitors will find it difficult to replicate its business model.

That's because Nubank started from a digital-first position. The rest of the industry, meanwhile, is largely stuck with a high-cost business model that requires large staffs and expensive physical branches.

Nubank can simply move faster and more efficiently than the competition, an advantage that won't disappear anytime soon. The crypto aspect is only one growth driver for the company, but that is exactly the point. Nubank offers many high-demand financial products to its growing customer base, and despite rapid growth in recent years, the company still hasn't tapped most of its potential addressable market.

Shares aren't exactly cheap given a strong run-up in 2023, but investors like Buffett know that it pays to be an early investor in stocks that can grow consistently for decades to come.

 

[Overnight]

Fucking bubbles. You know how to push my buttons Schizy.

 

[BKR88]

Email I received monday.

2024 is showing increasing parallels to 2000, right before the Tech Bubble busted. Bubbles almost always grow larger than most could anticipate, and there is always a story to seemingly justify them, as there is with AI today. When they pop, they pop violently as was seen when the Tech Bubble collapsed, leading to an 80% peak to trough loss on the Nasdaq. Imagine a 50% decline in your portfolio, let alone 80%. I believe the current bubble is quite large and dangerous, which is why we are far more conservatively positioned, taking advantage of the extremely attractive valuations in areas such as bonds, REITs, and value stocks. A very low risk 8%, is much more attractive than a potential 20% return with 50%-60% downside, especially when we are talking about retirement funds. When valuations are more attractive, absolutely it makes sense to get more aggressive.

Here are a few data points that are eerily similar to previous stock bubbles, particularly, the Tech Bubble of the late 1990s. For instance, relative to the S&P 500, the S&P 500 Momentum Index has surged to a new cycle high and is at its highest since August of 2000. The ratio of US Large Caps to US Small Caps is at its highest level since October 1999. The ratio of Growth Stocks to Value Stocks in the US is at its highest level since March 2000, the peak of the dot-com bubble. Small cap stocks are being outperformed by large caps by the most since 1998. Millennials and Gen Z are 90% invested in stocks in their 401ks, based on Vanguard's defined contribution plans. The S&P 500 made a new all-time closing high on Friday with just 43% of components above their 50-day moving average. In the past 25 years, the only other time we've seen an all-time high with less than 45% above their DMA's was December 1999. The S&P Expanded Tech Forward P/E is almost as high as it was in 2021, when interest rates were near 0%. This makes absolutely no sense whatsoever as higher interest rates, reduce valuations for long duration assets such as Tech stocks, because the opportunity cost becomes dramatically higher. Keep in mind that the Nasdaq dropped by 30% in 2022, when valuations were similar.

Here is a poignant quote from John Hussman:

"Even glamour companies of the tech bubble that prospered from a growth perspective lost value from an investment perspective. from their 1999-2000 speculative highs to their 2007 bull market peaks (entirely excluding the global financial crisis that followed), Amazon enjoyed compound annual growth approaching 40%, Microsoft enjoyed revenue growth averaging 14% annually, and Cisco Systems enjoyed revenue growth averaging 22% annually. During that same period, all of these stocks posted negative cumulative returns, with Amazon losing 5.5%, Microsoft losing 20.3% and Cisco losing 57.4%. Be careful about extrapolation once extrapolation has already produced extraordinary valuations."

It is really easy to see how a lost decade can once again occur for stocks, given the current valuations and the market concentration that we are seeing. It really would only take Nvidia, Apple, Amazon, Tesla, Meta, Microsoft, Costco, and Alphabet mean reverting towards more normalized valuations. I mean Costco trades at 53 times earnings and Apple is at one of its highest valuations ever, despite fairly mundane growth prospects. Mean reversion occurring doesn't seem too unlikely in our estimation, which is why we find other opportunities more attractive. Real estate seemed like a no-brainer investment in 2004-2007, only to lead to the biggest real estate crash since the Great Depression. The Nifty Fifty was the same in the 1970's. Bubbles are built on speculative behavior getting rewarded, as we have seen from valuations continuing to grow to increasingly higher levels, further away from historical averages. These are times when patience and discipline are more important than ever. In investing you have to run your own race. When a distance runner, tries to keep up with a sprinter, they are bound to tire themselves out, as that is not their game. Similarly, those that are trying to compress 40 years of investment returns, into 5 years through speculating in the bubble and using leverage through options, are unlikely to hold on to their gains when the bubble bursts.

New email from the same person.


I've been repeatedly writing about the elevated risks arising in the equity markets, due to stratospheric valuations, and the most expensive stocks having massively concentrated weightings in the indices. Over the last week, we've seen those risks on display as small cap, value, and real estate stocks have been on absolute tear, while the Tech stocks are getting hit hard. This is what's called factor rotation and while it has only been a week, I do believe it gives us a likely preview of what we would see in the next bear market. For instance, today, the Nasdaq 100 had its worst day since 2022, down 2.77%, and the Magnificent 7 were down by 3.4%. The weakness of the heavyweights caused the S&P 500 to be down by 1.4%, despite many stocks being up, largely due to the fact that Microsoft and Apple each count as about 7% of the index and they were down by quite a bit. TTCM portfolios were up, which is why I keep harping that I think we are very well prepared for the likely volatility that is coming.

Financial stocks and real estate stocks have been performing very well, with the banks posting fantastic earnings results. Real estate is rallying on the prospects of potential rate hike, as most of the selloff over the last few years has been due to the detrimental impact higher interest rates had on property valuations. Stocks such as VICI, Crown Castle, W.P. Carey, Agree Realty, Camden Properties, and MId-America are fantastic companies with strong long-term growth prospects. None of them have any material Office exposure, which is by far the most troubled area of the real estate market. Most of these companies will likely maintain and grow their dividends over the next 5-10 years, providing a stable and growing income stream for us as investors.

Over the last 5 days, small-cap stocks have had the biggest outperformance relative to large-cap stocks in history, since data was began being collected in 1978. This powerful rally is just a bit of mean reversion, as the opposite phenomenon had been occurring right up until then. This trend reversal might prove to be fleeting, or it might be the start of a major change. For those of you that remember the 2000 crash, even though the Nasdaq dropped 80% peak to trough, many value investors made fortunes because value stocks were so cheap going into that bear market. The mean reversion was powerful and lasted around 7 years. Hopefully we see a similar dynamic occur for value, but regardless I believe that we are well prepared. As always, we will keep you updated with however markets unfold from here.

 

[nitrene]

Hussman is a permabear. I've been reading his stuff for years and he has been wrong almost every time. There was a huge rotation in the Nov 2023 to Jan 2024 rally as well. What happened to the IWM since then? It went nowhere fast.

The same will happen this time. After another 10% IWM outperformance to the QQQ, IWM will collapse as it always does. And the QQQ will go up another 20%.

From the end of Oct 2023 to the end of Dec 2023 IWM was up 25% & the QQQ was up 13%. Since then IWM was unchanged up until the recent run up & the QQQ was up 20%.

 

[newwurldmn]

The AI bubble is a deep state conspiracy to make trump look bad.

the secret service is using the fed’s balance sheet along with funds from China and from other globalists to bid up AI stocks to make Joe Biden look like a good president. If trump wins in November they will then sell all their holdings and short to make the market crash and make it look like trump’s fault.

I have friends at coteau and tiger global who are part of the conspiracy.