Monday was one of those sessions, where it was never clear if the starter’s gun ever went. Overall, market bias remained to the upside with the NASDAQ powering to a new fresh high, and the S&P 500 edging ever so close to achieving its own record.
Market Breadth | NYSE | NASDAQ |
Advancing | 1,529 | 1,846 |
Declining | 1,452 | 1,544 |
52 Week High | 91 | 136 |
52 Week Low | 11 | 14 |
Advancing | 1.55B | 1.91B |
Declining | 1.93B | 1.25B |
A Quaint Approach
In the famous novella Goodbye, Mr. Chips, written by James Hilton, the main character Mr. Chipping spent his entire adult life as a schoolteacher. From 1870 until he died at age 85 in 1933, the world evolved in ways that still reverberate to this day. Key historical events served as the backdrop in changes that shaped Mr. Chips.
His seemingly unspectacular life impacted so many during the most consequential period for all mankind.
I could not help but think about Mr. Chips yesterday when changes in the Berkshire Hathaway (BRK.B) portfolio was announced and moved the market more than any other news. Mr. Warren Buffett has an approach to the market that is rooted in things he learned long ago, including the works of the late economist Benjamin Graham. But yesterday, I had to wonder if Warren Buffett has moved down a more whimsical path.
I can understand closing his airline positions in the age of Covid-19. There may have been a time when Buffett would have leveraged near-term industry pain for long-term investment opportunities. Whatever the rationale is, the moves revealed in Buffett’s portfolio were a reminder the world continues to evolve in ways the Dow Jones Industrial Average (DOW) is not capable of measuring.
Buffett Goes on Selling Spree:
- Sold all is Occidental Petroleum = Energy -0.58%
- Sold all Goldman and big chunks of JP Morgan and PNC = Financials -1.67%
- Sold all his airline positions = Industrials -0.46%
S&P 500 Index | +0.27% | |
Communication Services XLC | +0.12% | |
Consumer Discretionary XLY | +1.29% | |
Consumer Staples XLP | +0.56% | |
Energy XLE | -0.58% | |
Financials XLF | -1.67% | |
Health Care XLV | +0.59% | |
Industrials XLI | -0.46% | |
Materials XLB | +0.45% | |
Real Estate XLRE | +0.89% | |
Technology XLK | +0.67% | |
Utilities XLU | -0.13% |
Warren Buffett is sitting on billions. While his recent performance and legendary status owe much to Apple (AAPL) as of late, you must wonder if he will venture into other names and spaces in Technology. The world has changed so rapidly this year that owning oil and airline stocks is not the stuff of new fortunes, but it reflects an era that has long passed.
Mr. Buffett is 89 years old. He is vibrant and he wants to continue to show the world his investor prowess, and that might mean an adjustment to a quaint approach in a not so quaint world.
Watching Bitcoin
Speaking of the future, there is no doubt we will not be using paper money or physical coins. But when the transition happens is anyone’s guess. What will prevail is also anyone’s guess, but I am moving closer towards adding Bitcoin to my personal portfolio. More than likely, like gold and silver, I will buy and not be a seller.
Investors should see $12,600 as a major breakout point that probably could spark a further rally toward the all-time high.
Portfolio Approach
Today’s Session
Housing Boom
Housing data crushes consensus, but it was driven by multi-family not single family.
July Housing Starts | Month to Month | Year to Year |
Single Family | +8.2% | +7.4% |
Multi-family | +56.7% | +67.8% |
Total | +22.6% | +23.4% |
July Housing Permits | Month to Month | Year to Year |
Single Family | +17.0% | +23.5% |
Multi-family | +15.5% | -0.4% |
Total | +18.8% | +9.4% |
To see the chart, click here.