After winning the White House again, Donald Trump and many of his supporters performed well in the stock market. It appears Warren Buffett is not so much after all.
This is a recap of Market turmoil after electionsThe so-called Trump trade effect that is producing some notable winners (among them, Trump himself) and, if you can believe the trading-desk conversations, losers like Buffett.
Buffett has been selling stocks like Bank of America and even market darling Apple, in case you haven’t noticed, he has accumulated over $300 billion in cash and cash equivalents (T-bills) since he said That tax rates were going higher, and they expected stocks to rise. Ditch.
In other words, Buffett watchers say he was betting on the money. On Kamala Harris’s victoryThat would have reversed the Trump trade in major indices and some stocks (Truth Social’s shares among them) have been found to have bounced on the prospect of a Trump victory and his promises of lower taxes, including capital gains.
Some of these traders say that now that the possibility of Trump winning has turned into reality, the famous Oracle of Omaha is looking like the Knucklehead of Nebraska. Sure, shares of their holding company Berkshire Hathaway were up compared to the rest of the market after Wednesday’s massive fall on Wall Street, but sitting in low-yield, short-dated Treasuries like the Fed left all that money on the table. Think about. , and he doesn’t have cash in the roaring S&P.
What’s more, rumor in the trading-desk world has it that the famous value investor was actually hoarding cash to watch for value in equities after their steep declines. The Dow went up more than 1,500 points on Wednesday, what was the result?
As far as Trump is concerned, he’s been making a few bucks over the past few weeks on the stock of his social-media company Truth Social, which trades under. DJT symbolLargely on speculation that the money-losing organization would somehow benefit with Trump in the White House (shares have surged nearly 90% in recent weeks).
The day after his victory, he made a paper profit of almost $1 billion on his shares of DJT. He owns 53% of the stock, or 114 million shares, and public filings show he has not sold any shares. The stock continued to trade in volatile trading on Thursday as it gave up some gains.
Okay, maybe I’m being a little hard on old Warren and a little soft on Donald. They don’t call Buffett the Oracle of Omaha for nothing. Due to his exceptional long-term track record of finding undervalued stocks and companies and filling them into his Berkshire Hathaway portfolio, he is one of the richest men in the world, worth approximately $140 billion. Even at the age of 94, he is counted among the best investors of all time.
Meanwhile, Forbes says Trump’s net worth is now about $8 billion, but half of that goes into the appreciation of DJT stock, the currency of the money-losing Truth Social platform, which coincidentally announced the day after his election It continues to lose millions of dollars due to weak user growth and lack of advertising.
Meanwhile, speculators are piling money into the stock, not just because they like the company’s fundamentals; He thinks Trump can somehow lift the company’s fortunes from the White House, which is easier said than done given ethics rules.
As I’ve reported, there’s also a theory that Truth Social could be bought by Tesla chief and Trump adviser Elon Musk Merge with “X” platform,
Then there is discussion about the so-called depletion of the stock. Short selling occurs when someone bets that the stock will decline by borrowing shares, sells them immediately and pays back the borrowing if the stock declines later.
But traders can “squeeze” shorts by working together to buy and hold, forcing shares to higher prices and causing shorts to cover their borrowings at ever higher prices and incur losses. . The bigger the squeeze, the higher shares will rise.
Yes, there’s a lot of wishful thinking about this stock, but for now Trump looks like he got it mostly right, while the so-called Oracle didn’t.
Buffett did not respond to requests for comment.
