Is Buffett’s Cash Hoard a Market Warning?

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S&P 500 News

Berkshire Hathaway Inc Class A

Market Overview Analysis by Lance Roberts covering: S&P 500, Berkshire Hathaway Inc Class A. Read Lance Roberts's latest article on Investing.com

“One of the longest-running traditions in modern finance is that every year, one Saturday morning in late February, the world’s financial class – from professionals to mere amateurs – sit down as they have for the past 65 or so years – for an hour and read the latest Berkshire annual letter written by Warren Buffett.

“While stock prices can deviate from immediate activity, reversions to actual economic growth eventually occur. Such is because As earnings disappointed, stock prices adjusted by nearly 50% to realign valuations with weaker-than-expected current earnings and slower future earnings growth. So, while stock markets are once again detached from reality, looking at past earnings contractions suggests such deviations are not sustainable.

American investors are now more stable than in the past, think back to September 2008. Speed of communication and the wonders of technology facilitates instant worldwide paralysis, and we have come a long way since smoke signals.Berkshire’s ability to immediately respond to market seizures with both huge sums and certainty of performance may offer us an occasional large-scale opportunity.

 

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