Donald Trump and many of his supporters did pretty well in the stock market after he took back the White House. Warren Buffett, apparently, not so much.
This has led to the post-election market frenzy, notable winners (among them Trump himself), and, if trading desk chatter is to be believed, the so-called Trump race that has produced losers like Buffett. This is a summary of the effects of trade.
Buffett sold stocks such as Bank of America and, in case you haven't noticed, even market darling Apple, leaving him with more than $300 billion in cash as he said tax rates would rise and predicted stock prices would rise. and hoarding cash equivalents (T-bills). crater.
In other words, Buffett watchers told On the Money that Buffett is betting on Kamala Harris to win, which would reverse Trump's victory. There are trades in major indexes and certain stocks (among them Truth Social) that were excited about the possibility of a Trump election. He promised victory and lower taxes, including on capital gains.
Now that a Trump victory is a possibility, some traders say Omaha's famous Oracle resembles a Nebraska knucklehead. Indeed, after Wednesday's big Wall Street rally, the stock price of his holding company Berkshire Hathaway rose along with the rest of the market, but he remains parked in as many low-yielding short-term Treasuries as the Fed. Think about all the funds you had. , and had no cash in the rioting S&P.
Additionally, there are rumors in the world of trading desks that this famous value investor was actually hoarding cash in order to find value and jump on it after stock prices plummeted. What happened to the Dow's more than 1,500-point rally on Wednesday?
As for Mr. Trump, he has made a few dollars over the past few weeks on shares of the social media company Truth Social, which trades under the symbol DJT, largely because the loss-making company somehow profited under the Trump administration. This is due to speculation that they may be able to obtain the funds. The White House (stocks are up about 90% in recent weeks).
The day after his win, he made a paper profit of about $1 billion in DJT stock. He owns 53% of the company's stock, or 114 million shares, but public documents show he hasn't sold a single share. Stocks continued to trade volatile on Thursday, giving up some of their gains.
Well, I might be a little harsh on Old Man Warren and soft on Donald. It's not for nothing that they call Buffett the Oracle of Omaha. His extraordinary long-term track record of identifying undervalued stocks and companies and incorporating them into Berkshire Hathaway's portfolio has made him one of the world's richest people, with a value of approximately $140 billion. Even at age 94, he is still considered one of the greatest investors of all time.
Meanwhile, Forbes magazine reported that President Trump's net worth is currently about $8 billion, but half of that appears to be due to the rise in the value of DJT stock, the currency of the loss-making Truth social platform.Coincidentally, the day after the presidential election, President Trump announced that the value of his assets will continue to increase. It has lost tens of millions of dollars due to sluggish user growth and lack of advertising.
On the other hand, speculators aren't buying the stock just because they like the company's fundamentals as they are. They think Mr. Trump could somehow boost the company's fortunes from the White House, but given ethics rules, that's easier said than done.
As I reported, there's also a theory that Truth Social could be acquired by Tesla CEO and President Trump advisor Elon Musk to merge with the “X” platform.
Then there's talk about the so-called stock short squeeze. Short selling is betting that a stock will fall by borrowing it, selling it immediately, and replacing the borrowed money at a later date when the stock price falls.
But by manipulating buys and holds in parallel, traders can “squeeze” shorts, forcing stock prices to rise and allowing shorts to borrow at ever-higher prices and cover their losses. The greater the pressure, the higher the stock price will be.
Yes, there's a lot of wishful thinking going around about this stock, but so far it looks like Trump got this one mostly right, while the so-called Oracle didn't.
Buffett did not respond to requests for comment.
