💰 5 Fact Friday: Inside Buffett's Latest Trades

Today's sponsor

Hey Money Maniacs,

Welcome back to another edition of 5 Fact Friday! Here are this week’s biggest stories in the world of money:

1. Investors are all-in on equities 📈

For the first time in nearly two years, global asset managers are throwing confetti and not bracing for a recession. That's right, maniacs, the mood is more "let's party" than "let's bunker down."

According to the latest from Bank of America’s Fund Manager Survey (FMS), investors are betting heavily on a soft landing.

They no longer predict a global recession as the base case scenario. Instead, their cash piles are shrinking and equity allocation is back up around its long-term average.

So, what's the takeaway for us, the savvy investors?

Don’t underestimate the power of dollar-cost averaging.

If you've been sitting on your hands, waiting for the sky to fall or for that elusive recession to hit, you've missed the boat. The market's been on a joyride without you for the last three months.

Those who've been sprinkling their cash into the market consistently over the past four years? They're the ones popping champagne now and watching their portfolios hit fresh all-time highs.

Moral of the story: Don’t try to be the smartest investor in the room. Be the most consistent. 💰

Out Of Home for the modern age with AdQuick

With AdQuick, you can now easily plan, deploy and measure campaigns just as easily as digital ads, making them a no-brainer to add to your team’s toolbox.

• AdQuick can help modernize your marketing

• Run ads in the real world as easily as you would online

• Measure billboards like you would digital ads

• Buy from 1600+ media owners in 1 place

• Make your brand stand-out in a way like nowhere else

Learn how to scale Out of Home advertising.

2. Buffett adjusts his portfolio 👀

There's no investor whose moves are more closely watched (and copied) than Warren Buffett, the grandmaster of the financial chessboard.

As an institutional investor with more than $100M in assets under management, Buffett’s Berkshire Hathaway is required to file a 13F within 45 days of the end of each quarter.

Well, Berkshire’s latest 13F just dropped—which means we get to see what the Oracle of Omaha was up to in Q4 2023.

Top Buys:

• Chevron: $2.36 billion

• Occidental Petroleum: $1.17 billion

• Sirius XM: $167 million

Top Sells:

• HP: $2.40 billion

• Apple: $1.93 billion

• D.R. Horton: $710 million

• Paramount: $450 million

Top Holdings:

• Apple: 50%

• Bank of America: 10%

• American Express: 8%

• Coca Cola: 7%

• Chevron: 5%

• See more

Overall, it looks like Buffett was a net seller in the 4th quarter.

He pared back his massive position in Apple, slashed his positions in Paramount and HP, and added to his energy bets in Chevron and Occidental Petroleum.

That leaves Buffett heavy in technology, financials, energy, and consumer staples.

3. Bitcoin rejoins the 4 comma club 🚀

Up nearly 15% in the past week, Bitcoin is back in rare air. The leading cryptocurrency is now a top 10 global asset, rocking a trillion-dollar market cap.

With its price soaring to $52,000 (and past the psychologically important level of $50,000), Bitcoin hasn't felt this loved since December 2021.

The catalyst? Bitcoin spot ETFs.

Outflows from the Grayscale Bitcoin ETF (GBTC) dragged the market down initially, due to the fund’s exorbitant fees and huge pool of previously locked-up bitcoin.

Since then, however, net inflows to Bitcoin ETFs total nearly $4 billion. For context, it took gold nearly 2 years to do the same.

James Butterfill, head of research at CoinShares, highlighted a record-breaking $651 million inflow on Tuesday. This investment created a staggering demand for 12,000 Bitcoins when the daily supply was just 900.

It’s clear: investors are betting big on Bitcoin's scarcity, especially with the halving event on the horizon. This event, a supply squeeze coded into Bitcoin's DNA, is expected to take place in April.

Historically, halvings precede significant price rallies, making the next few months a must-watch in the investing world.

Learn AI in 5 min a day.

How do you stay up-to-date with the insane pace of AI? Join The Rundown – the world’s fastest-growing AI newsletter with over 500,000+ readers learning how to become more productive using AI every morning.

1. Our team spends all day researching and talking with industry experts.

2. We send you daily updates on the latest AI news, tools, and tutorials.

3. You learn how to become 2x more productive by leveraging AI.

Sign up.

4. Inflation throws a curveball 🤨

Inflation is proving tougher to squash than Wile E. Coyote. No matter how many anvils the Fed drops, inflation just keeps coming back for more.

January's Consumer Price Index (CPI) report was a splash of cold reality, with prices climbing 0.3% for the month and 3.1% for the year. Removing volatile food and energy costs—as some economists prefer to do—the CPI was up 0.4% for the month and 3.9% for the year.

This higher-than-expected inflation reading sent the futures market into a tizzy, wiping out any dreams of a March rate cut. Now, the betting pool's eyeing June 12th for the Fed's first move, with some hopefuls whispering about May 1st.

And how did the stock market take this news?

Not well, my friends. The S&P 500 and Dow both took a 1.4% tumble, while the small-cap Russell 2000 dove 4%.

But here's a twist: No rate cut could actually be a good omen. It suggests the Fed doesn’t feel the need to stimulate the economy any further—things are humming along quite nicely as-is.

After all, we don’t want markets to get ahead of themselves. The S&P 500 is already looking expensive on a price-to-earnings basis, at its 92nd percentile historically.

Pumping any more cash into this party could lead to demand-pull inflation, undermining the Fed’s progress and turning up the heat on investor risk.

5. Mortgage rates go the wrong way 🙄

Just when we thought it was safe to browse Zillow again…

As of last Friday, the 30-year fixed mortgage rate jumped to 6.87%, up from last month’s average of 6.43%.

But don’t go rage-deleting your “Dream Home” Pinterest board. There are a few savvy moves you can make to shave 0.5% to 1.0% off your rate. Let's talk strategy.

Polish That Credit Score: Obvious? Yes, but it’s one of the only variables within your control. By boosting your credit score by just a few points, you could save hundreds of dollars per month.

Buy Points: To lower your interest rate, you can always buy points. Usually, this means paying 1% of the loan amount to reduce your rate by 0.25%. However, with lower mortgage rates coming as soon as this fall, this might not be the right time to pay up.

Relationship Banking: Banks often offer better rates to their BFFs. So shop around anywhere you have long-standing savings, checking, or investment accounts. Depending on your relationship history and account value, you may be able to negotiate a 0.25% to 1% discount.

Assume a Loan: This is the rarest beast in the mortgage jungle. Taking over someone else's loan can snag you their rate (think sub-3%). FHA and VA loans qualify, and you can find these opportunities on websites like AssumeList and Roam.

But there are two challenges.

The down payments on these loans can be much higher than normal. Plus, mortgage servicing companies don’t earn much from “assumptions.” As a result, it can be challenging (and time-consuming) to navigate through all of the red tape.

Thanks for tuning in to this week's edition! If you enjoy 5 Fact Friday, follow me on Instagram and Twitter to stay in touch.

Also, check out TheMoneyManiac.com for more resources on earning, planning, and investing!

Until next time,
Daniel

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.