Buffett Shares Market Thoughts in a Rare Media Appearance

Warren Buffet took center stage this week with an interview with CNBC. In the rare media appearance, the Berkshire Hathaway CEO ($BRK.A) gave insights into his recent moves and his thoughts on the overall market.

This was the first time Buffett has shared his thoughts since Berkshire’s annual meeting last April.

💡 Key Takeaways from the Interview:

• 🏦 Banking Stocks: Buffett is ditching bank stocks saying, "I don’t like the banking business as much as I did before."

• 🤖 AI Revolution: Buffett mentioned that Bill Gates introduced him to AI 4-5 months ago. He claims he doesn’t understand the technology and cited, “I think this is extraordinary, but I don’t know whether it’s beneficial."
  

• 📈 Inflation & Recession: As interest rates hike north of 4.75%, Buffett warns it's a "tougher world out there," with real estate and equities in the crosshairs.
  

• 📱Apple's Appeal: Buffett expressed his admiration for Apple ($AAPL) and, in particular, the company's flagship product, the iPhone. Buffett called the iPhone an "incredibly valuable utility.” The stock continues to be Berkshire’s largest holding by far.

• 🎥 Streaming: Buffett says the streaming industry is “not really a very good business.” While Berkshire has built a stake in Paramount Global ($PARA), Buffett's outlook on the industry overall remains bearish.
  

• 🇯🇵 Doubling Down on Japan: Buffet’s betting big on Japan's trading houses, increasing stakes in Itochu, Marubeni, Mitsui, Mitsubishi, and Sumitomo to ~7.4%. Berkshire now has a substantial $15 billion stake in Japan, making it a prominent part of its international investments.

  and lastly…
  

• 🎲 Bitcoin's Roulette Run: Buffett's is not boarding the crypto bandwagon. He called Bitcoin a "gambling token" with no intrinsic value. In Buffett's book, betting on Bitcoin is like spinning a roulette wheel with the odds stacked against you.

 🎢 Crypto is Booming Again

With Buffet’s word of warning in mind, the crypto market is back on a bull run. Bitcoin passed $30,000 USD this week, marking its highest price in the past 10 months. 

Crypto brokerage Coinbase ($COIN) followed suit and was up over 10% this week while crypto-mining companies like Marathon Digital ($MARA) and Riot Blockchain ($RIOT) were up over 35%.

This comes after a weak 2022 when more than $2 trillion was wiped from the industry and bitcoin fell 62%. This year, crypto has rebounded, but still remains down from it’s peak:

• Bitcoin ($BTC) is up over 82% YTD, but down 49% from it’s peak

• Ethereum ($ETH) is up over 75% YTD, but down 51% from it’s peak

Coinbase ($COIN) was also featured on S3 Partners’ “Most Squeezable Stocks” list this week, leading the list at #1, with other crypto-related stocks (MicroStrategy, Marathon Digital, and Riot Blockchain) also on the board.

🤖 Amazon and Alibaba Join the AI Race

In a blog post this week, Amazon announced its generative AI service called "Amazon Bedrock,” which will allow users to build and scale generative AI applications. This marks their introduction into the generative AI race, competing head to head with Google and Microsoft.

This service will be offered within the Amazon Web Services (AWS) ecosystem, which is set to hit $100B in revenue this year and is the leader in the cloud infrastructure market.

Alibaba Group ($BABA), the Chinese e-commerce powerhouse, also doesn’t want to miss out on the hype. They announced their plans to integrate their new AI model “Tongyi Qianwen,” into various applications they own.

Alibaba will start by integrating Tongyi Qianwen into its Tmall Genie smart speakers and DingTalk workplace messaging platform.

Similar to Amazon, Alibaba continues to re-invest in this cloud computing business. In September 2022, they pledged to invest $1B over the next 3 years to support their cloud computing division.

Top Discussions This Week 🎙

🗞️ What else you might’ve missed:

• Goldman Sachs is reportedly interested in acquiring Subway.

• RBC experts expect a slow start to the housing market in the Spring.

• Apple’s PC shipments fall 40%, surpassing competitors.

• Snapchat hired a former Google executive to help with ad performance.

• Twitter is partnering with Etoro, allowing users to trade stocks.