Tuesday, May 3rd 2022

WATCH: Warren's latest shopping spree, r/WallStreetBets, inflation and bitcoin

Commentary

At the end of April, Berkshire Hathaway released their Q1 earnings report and held their annual shareholder conference in person - the first time in 2 years following a pandemic hiatus. A few key takeaways from Emily on our investment team:

Shopping Spree: In Q1 2022, Berkshire spent over $50b on stocks, the bulk of which was spent in the second half of the quarter. The most notable of these purchases were Allegheny Corporation for over $11b, Berkshire’s largest acquisition since 2016, as well as oversized positions in cash flow generating businesses like Chevron and Occidental Petroleum. The “Oracle of Omaha’s” deployment of cash indicates that even in a turbulent market, there is value to be found in certain long-term investments.

r/WallStreetBets: Berkshire re-emphasized that their best investments are long-term in nature. Likening speculation in meme stocks to gambling in a casino, Buffett admitted during the shareholder meeting that they have never made a decision based on what the market is going to do in the next couple of weeks or months. The same thing can be said for how the economy is going to react to certain events in the short and medium term. Buffett & Co. encouraged investors to put capital work when their time horizons are long while reiterating his position that timing the market is not nearly as important as time in the market.

On Inflation: Buffett noted that while Berkshire’s businesses have felt the impacts of inflation, the Treasury’s stimulus efforts during the pandemic were both necessary and responsible. In terms of how to deal with inflation, Buffett encouraged investors to invest in their own skills to create value which can’t be inflated away. He noted that “the best investment by far is anything that develops yourself, and it’s not taxed at all.” Interestingly, this echoes advice that he gave at the tail end of the Great Recession in 2009.

NGMI: While Buffett is one of the greatest investors of our time, we don’t align with him on everything said this weekend. During the shareholder meeting, Buffett reiterated his view that Bitcoin is worthless, even saying that he “wouldn’t buy all of the Bitcoin in the world for $25”; Vice Chairman Charlie Munger went as far as to call Bitcoin “stupid and evil.”. We here at Titan continue to be bullish crypto, as evidenced by our Titan Crypto offering, and it doesn’t seem like we’re alone: The recent institutional flows into crypto, the rise of DeFi and NFT technologies, and the fact that multiple countries have adopted Bitcoin as legal tender, are all signs of potential value creation from cryptocurrencies.

If you want to know more about Bitcoin, inflation, Berkshire, or anything else investment-related, make sure to leave us a question in the “Ask Titan Anything” feature in our app.

We look forward to hearing from you.

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