Will Buffett Make His Next Move?

FINANCE
Will Buffett Make His Next Move?

Warren Buffett’s recent moves suggest he anticipated the market selloff. In 2024, Berkshire Hathaway sold $134 billion in equities, amassing a record $334 billion in cash—more than its shrinking $272 billion stock portfolio.

The Nasdaq and S&P 500 have entered correction territory, reinforcing Buffett’s cautious stance. Armando Gonzalez of Bigdata.com noted Buffett’s warnings on inflation, tariffs, and geopolitical risks, adding that history shows Buffett sells ahead of weaker market performance.

Despite the downturn, Buffett remains patient, historically waiting for deep value opportunities. During 2008’s crisis, he invested in General Electric but avoided rushed decisions. While Berkshire has made some moderate stock buys, valuations remain high.

Analysts speculate Buffett may focus on insurance acquisitions or international investments, especially Japanese trading firms. Meanwhile, rumors suggest Berkshire may sell its HomeServices real estate unit, further expanding its cash reserves for future strategic moves.

TECH
Musk and OpenAI Head to Trial

Elon Musk and OpenAI have agreed to fast-track a trial over the AI company’s shift to a for-profit model, escalating their legal battle. A U.S. District Court judge denied Musk’s request to halt OpenAI’s transition but approved an expedited trial set for autumn.

Musk, who co-founded OpenAI with Sam Altman in 2015 before leaving to launch xAI in 2023, sued OpenAI and Altman last year, accusing them of abandoning OpenAI’s mission to develop AI for humanity rather than corporate gain. OpenAI denies the allegations, arguing Musk aims to slow down a competitor.

The lawsuit centers on OpenAI’s restructuring, which is critical for securing a $40 billion funding round. The legal fight follows Altman’s rejection of a $97.4 billion takeover bid from a Musk-led group. OpenAI maintains the transition is necessary to compete in the high-cost AI race, while Musk sees it as a betrayal of OpenAI’s founding principles.

FINANCE
Trump’s Tariffs Shake Market Confidence

Trump’s tariffs have fueled recession fears, inflation concerns, and market volatility, with the S&P 500 losing $5 trillion in just three weeks. Treasury Secretary Scott Bessent, a former hedge-fund chief, remains unfazed, emphasizing a "smooth transition" rather than a downturn.

Consumer sentiment has dropped for three consecutive months, now 22% lower than December, reflecting growing public concern. Economists warn tariffs could raise inflation as businesses pass higher costs to consumers, potentially leading to stagflation—a mix of high inflation and slow growth. JPMorgan and Evercore analysts echo these concerns, while former Treasury Secretary Larry Summers sees a 50% chance of recession due to tariff uncertainty.

Trump’s administration, including Vice President JD Vance, insists the economy remains strong, though they don’t rule out turbulence. As of Friday, the S&P 500 is down 8.17%, the Dow 7.20%, and the Nasdaq 11.76%, despite a minor rally.

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.