Buffett has made several operations recently.
▋Sell a bunch of Apple technology stocks.
▋Almost liquidated Japanese stocks.
▋Sold a bunch of bank stocks.
He began to sell out slowly in May, and recently sold a large number of stocks.
Sharp investors should be able to feel that the bubble is about to explode.
Someone asked Buffett what is the best investment at this stage?
He replied: "It's best to hold cash."
This is even the largest amount of cash held by his subsidiary Berkshire Hathaway.
The reduction in positions, such as technology and banking stocks, are very similar to his operations in 1999.
At this time, I just want to share a picture. This chart shows the performance of the United States after interest rate cuts in 2000 and 2007.
Let’s first talk about the burst of the dot-com bubble in 2000:
▋Rate cut rate: from 6.50% to 1.00%
First rate cut: January 2001
▋The last interest rate cut: June 2003
▋NASDAQ performance:
Market peak: March 10, 2000, index 5,132 points
Market bottom: March 12, 2003, index 1,253 points
"Statistical decline: -76%"
2007-2009 Global Financial Crisis:
▋Rate cut: from 5.25% to 0.00%
First rate cut: September 2007
▋The last interest rate cut: December 2008
▋NASDAQ performance:
Market peak: October 31, 2007, index 2,861 points
Market bottom: March 9, 2009, index 1,265 points
"Statistical decline: -56%"
Then in September this year, interest rates began to be cut, and they dropped by two percentage points at the beginning.
Some high-end investors have slowly retreated after smelling some clues.
Cutting interest rates means the U.S. economy is beginning to experience a recession.
At this time, Japan continued to raise interest rates to recover funds, and the stock market declined sharply.
Global markets are relatively bearish.
The U.S. interest rate cut reduces the value of the U.S. dollar, causing U.S. dollars to flow out of the U.S. to other markets.
Global markets are relatively bullish.
Therefore, various speculation/investment markets are facing positions where long and short parties have different opinions.
Of course, this picture is just a historical rule. Whether there will be a battle royale in the stock market and currency market can only be verified later.
Will Buffett win in the end again? Is the financial crisis coming again?
What do you think?
