💰 5 Fact Friday: Buffett Buys The Dip

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MARKETS
1. Earnings Blowout Sends S&P To New Highs 💥

After a brief meltdown around “Liberation Day” tariffs, the S&P 500 has now chalked up its third straight record close.

We’re officially up 30% (from 4,987 to 6,469) after a 19% collapse. Charlie Bilello noted that it’s the second-fastest recovery of that magnitude in 75 years—behind only the 1982 rebound.

The key driver? Blistering Q2 earnings.

• 81% of S&P 500 companies beat earnings estimates

• Actual earnings growth: +11.8% vs. +4.9% expected

• Revenue growth of 6.3%, the strongest since Q3 2022

• On pace for the third consecutive quarter of double-digit earnings growth

Earnings aren't just icing on top for investors. They're the whole cake.

Goldman explains, “The S&P 500 has closely followed the path of earnings over time. Even with the significant expansion in the P/E ratio over the last decade, earnings and dividends still contributed three-fourths of the S&P 500’s total return.”

In other words, earnings are the primary driver of returns—and suddenly they’re firing on all cylinders. Deal-making and tariff exemptions softened the blow, but it was corporate profits that truly fueled the rally.

Now what?

With most of Q2 earnings in the rearview (just waiting on Nvidia), the market’s focus is shifting back to rate cuts.

That means the next leg of the rally may rest in Jerome Powell’s hands.

July inflation came in flat at 2.7%, pushing odds of a September cut above 90%. But there’s still plenty of time for that to change.

Any signs of a strong labor market, or another inflation spike, could lower those odds and throw a wrench in the rally before the Fed meets on September 16.

CRYPTO
2. Corporate Treasuries Are Going Crypto 💼

Crypto’s total market cap just touched an all-time high of nearly $4.2 trillion, driven by Bitcoin and Ethereum.

Bitcoin crossed $124,000 while Ethereum surged to $4,800, within 2% of its 2021 peak, before a pullback yesterday afternoon.

What’s different this time? The major driver isn’t just retail hype… it’s corporate treasuries.

First, a quick refresher:

• Bitcoin (BTC): Often called “digital gold.” It has a fixed cap of 21 million and is not controlled by any government or company, so it can never be inflated away. Think of it as a digital store of value.

• Ethereum (ETH): More function, less saving. You can think of it as “digital silver.” While it’s second fiddle in market cap, it trades Bitcoin’s simplicity for versatility. It sends faster, costs less, and is used widely in apps and services.

Together, they’re the blue-chip duo of crypto and they’re beginning to replace cash on company balance sheets.

Why Are Companies Buying?

In short, cash loses value. Apple, for example, has over $50B in cash. If inflation runs at 2%, that’s $1B of lost value every year.

Even if companies hold short-term Treasuries instead, they might earn 4%, or just ~2% after inflation.

Michael Saylor, founder of Strategy $MSTR ( ▼ 1.78% ), figured he could do better.

So back in 2020, he bet big on Bitcoin as a treasury alternative, kicking off a wave of corporate crypto accumulation. And, well, you can be the judge:

• 2020: 303%

• 2021: 60%

• 2022: (64%)

• 2023: 155%

• 2024: 121%

While cash returned a few percent at best, Saylor’s Bitcoin bet compounded at 67% per year.

So, he took it a step further:

1. Issued low-cost debt

2. Bought Bitcoin with it

3. Rinsed and repeated all the way to $75B worth of BTC

His simple play, borrowing cheaply and investing in BTC, has become a repeatable playbook.

From Bitcoin to Ethereum

Now Ethereum’s getting the same treatment.

Companies like BitMine ($3B in ETH) and SharpLink Gaming ($2B in ETH) are loading up on ETH, sometimes purchasing more in a month than the network issues in a year.

As demand outpaces supply, prices rise. As prices rise, demand from speculators follows. That’s the hype cycle. And it’s running hot.

Why It Matters

• 📈 Demand is relentless: Corporates, ETFs, and governments already own more than 16% of Bitcoin and ~4% of ETH supply.

• 🏦 Treasuries > Traders? Companies may offer steadier hands than retail, potentially stabilizing the volatility crypto is known for.

• 💸 Even with high rates: This isn’t just a low-interest-rate play. Even today, leveraged crypto purchases are performing.

This is clearly a bullish trend for Bitcoin and Ethereum.

But for the companies buying in? That’s a tougher call.

While Strategy has been a huge success, not every imitator has been rewarded by public markets.

Their performance will depend on how they finance those bets and where crypto prices go from here—which no one can predict with certainty.

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STOCKS
3. Buffett Buys The Dip In Healthcare 🏥

Warren Buffett may be stepping down as Berkshire Hathaway’s CEO, but his playbook is alive and well.

In Q2, Berkshire’s biggest purchase was UnitedHealth Group $UNH ( ▲ 11.98% ). The $1.6 billion stake, more than 5 million shares, now ranks as Berkshire’s 18th-largest position.

That’s a bold bet. UnitedHealth is down 57% from its 2024 peak and is the worst-performing stock in the Dow this year. It’s also facing:

• A DOJ investigation into Medicare billing practices

• A $2.9B cyberattack impact

• A CEO resignation

• Soaring medical costs in Medicare Advantage

• And public blowback over prescription denials

Despite the noise, this may be the ultimate Buffett-style bargain.

Here’s what he (or his lieutenants) likely saw:

• Valuation reset: At ~12x earnings, $UNH is trading near decade lows

• Massive scale: UnitedHealth is the 5th largest company in the world by revenue

• Reliable cash engine: Optum, the tech-enabled care division, already generates half of all operating income thanks to its strong margins

• Recovery potential: A return to its $630 high would mean 130% upside from today’s price

Buffett wasn’t alone. Michael Burry and David Tepper also bought in last quarter. And insiders including the new CEO and CFO collectively scooped up tens of millions in stock, signaling confidence in a rebound.

Whether or not Buffett made the call personally, the move fits his mantra: “Be fearful when others are greedy, and greedy when others are fearful.”

And right now, there’s no shortage of fear priced into UnitedHealth.

STOCKS
4. Amazon Puts Grocery Rivals on Ice 🥶

Jeff Bezos famouly said, “Your margin is my opportunity.”

While he may no longer be CEO, that mindset still defines Amazon. The behemoth’s latest target? Groceries.

Armed with Whole Foods, Amazon Fresh, and a delivery network you probably already use, Amazon just made grocery delivery cheaper and more conveient.

This week, the company expanded same-day delivery of fresh groceries to over 1,000 cities.

• Free delivery on orders over $25 for Prime members

  • $2.99 for smaller orders

  • $12.99 for non-members

• That $25 threshold? $10 less than Walmart’s minimum, and the lowest among major competitors

Why it matters:

• 🛒 Groceries are the holy grail of retail. They make up 43% of U.S. retail sales, but just 15% are currently sold online.

• 📦 Amazon wants it all. Customers can now bundle produce with electronics and household goods—all delivered same day.

• 💥 Collateral damage: Instacart dropped 11% on the news. DoorDash, Walmart, Kroger, and Albertson’s also took a hit.

At the same time, Amazon $AMZN ( ▲ 0.02% ) is slashing prices across Amazon Fresh. Store checks show staples from strawberries to soda regularly undercut local rivals, with no Prime membership needed.

But this play isn’t just about food.

More grocery orders mean higher shopping frequency, better data, and hyper-personalized offers. That powers Amazon’s high-margin ad business.

The company doesn’t need groceries to be profitable—it just needs them to drive the flywheel.

And thanks to its scale, army of over 1 million robots, and even drone delivery service, Amazon can squeeze where others can’t.

The result? We may be one step closer toward making the weekly supermarket trip a thing of the past.

STOCKS
5. Guess That Stock 🕵️‍♂️

This rocket maker just hit 60 successful launches, has NASA on speed dial, and is quietly gunning for a slice of SpaceX’s orbit.

Can you guess the stock?

1. Now headquartered in Long Beach, this aerospace upstart was originally founded in New Zealand by a self-taught engineer.

2. Its 660-lb payload rocket launches more frequently than any in its class and has delivered 200+ satellites to orbit.

3. The company has landed over $500M in U.S. government contracts from agencies like NASA and the Pentagon.

4. After a 700% rally in the last 12 months, the stock just crossed a $20B market cap. That’s still a fraction of SpaceX’s estimated $400B, but the credibility gap is narrowing.

5. Its next big move? Neutron, a 25,000-lb payload semi-reusable rocket designed to compete directly with SpaceX’s Falcon 9.

Got a guess? Tap here for the answer → 

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