Is smart money withdrawing from US stocks? In the week ending December 18, global investors withdrew $1.3 billion from US tech funds. Over the past three weeks, the outflow from tech funds has reached $2.5 billion.
Buffett strikes again! Berkshire Hathaway, led by Buffett, purchased shares of Occidental Petroleum, SiriusXM, and Verizon over three days on Tuesday, Wednesday, and Thursday, with a total investment exceeding $560 million. Occidental Petroleum is Berkshire's sixth-largest holding, following Apple, American Express, Bank of America, Coca-Cola, and Chevron.
The Federal Reserve announced a rate cut on Wednesday but expressed more concerns about future rate-cutting space. Since September, the Federal Reserve has lowered rates by a total of 100 basis points. Most Fed officials expect only two rate cuts in 2025.
The recent surge in US stocks is attributed to the strength of tech stocks, with high-tech sectors such as AI, artificial intelligence, and chip manufacturing showing strong growth. The current demand for AI chips is expected to remain high at least until 2030.
Recently, US stocks reached 20,000 points, leading some risk capital to cash out at high levels. Concerns over inflation and fears of a slowing US economy may also prompt some funds to exit. The decline in US stocks has also affected the cryptocurrency market. Currently, as we approach the year-end in East Asia and the US, retail investors may withdraw some funds from both the stock and cryptocurrency markets, reducing liquidity. Stock market corrections and cryptocurrency market corrections are normal at this time of year.
During this downturn, Buffett has begun to gradually buy the dip. The first reason is Trump's support for US oil; the second is that price increases are not a reason to buy, but price declines are. The investment principles of the Oracle of Omaha are clear. Therefore, in this nearly one-month period, buying on dips and holding cash for appreciation is advisable. Because Buffett is buying the dip. If we get through this winter month, spring will soon arrive.
