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Morning Market Report: Feb. 26th, 2024

Over the weekend the WSJ/Barron's made note of Warren Buffett's dour stock market outlook as diametrically opposed to the current AI buffoonery gripping Wall Street. But really who to believe - the greatest investor of all time who is stockpiling record cash or the current crop of overpaid hustlers on Wall Street, most of whom have never been through a bear market?

"Warren Buffett’s mood is at odds with that of the broader stock market"

"The S&P 500 keeps notching fresh records and tech stocks, particularly those exposed to artificial intelligence, are on a tear. But the Sage of Omaha appears to be far more cautious—and even resigned to a lack of opportunities"

"Buffett’s lack of enthusiasm may also be a warning. After all, he once said: “Be fearful when others are greedy, and be greedy when others are fearful.” Maybe the market ought to be more fearful than it currently is"

FR: Not even one mention of Nvidia in the Berkshire annual report. How about something like, "We really like Nvidia here, up 700% in the past year".

The week ahead features more retail earnings. Costco doesn't report this week, but I wanted to show that stock's chart which is going vertical. Notice where it peaked last time in 2022 i.e. right where Berkshire Hathaway peaked (circled), which I showed last night (See also below). What is the connection between the two stocks? Clearly they both peak late in the market cycle.

In other news, the Fed's inflation metric "PCE" (Personal Consumption Expenditures) will be released on Thursday. Recall that volatility picked up markedly with CPI back on Feb. 12th. And yet since that time, the AI melt-up has accelerated. If appears that for now investors are being greedy when they should be fearful.

Long enough to buy Berkshire Hathaway on the Monday after earnings. Having totally forgotten what Buffett said over the weekend.

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