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During the weekend, Berkshire Hathaway held its annual general meeting, where legendary investors Warren Buffett and Charlie Munger shared valuable investment insights. The company announced a remarkable $35.5 billion net profit for the first fiscal quarter, with its cash reserves exceeding $130 billion. Let’s discuss some of the highlights of the meeting.
US Dollar Still King: Buffett's Confidence in Reserve Currency
Despite concerns about the debt ceiling, Warren Buffett expressed confidence in the US dollar as the reserve currency. He doesn't see any other option to replace it. This viewpoint offers an endorsement of the strength of the US dollar, despite the challenges faced by the national debt. Investors can consider ETFs that track the US dollar, such as the Invesco DB US Dollar Index Bullish Fund (UUP - Free Report) .
Apple: A Better Business Than Any Berkshire Owns
Buffett spoke highly of Apple, a company in which Berkshire Hathaway owns nearly 6%. He referred to Apple as "a better business than any we own" and expressed regret over selling some shares years ago. Recently, Apple came up with upbeat earnings result too. To follow Buffett's confidence in Apple, investors can look into ETFs that have significant allocations to the tech giant, such as the Technology Select Sector SPDR Fund (XLK - Free Report) or the Vanguard Information Technology ETF (VGT - Free Report) .
Japan: A Land of Opportunities?
Warren Buffett has shown interest in Japanese trading firms, specifically Mitsubishi Corp., Mitsui, Itochu Corp., Marubeni, and Sumitomo. He increased his stakes in each of these companies to 7.4% and pledged to continue seeking opportunities in Japan. Investors looking to follow Buffett's footsteps can consider the iShares MSCI Japan ETF (EWJ - Free Report) or the WisdomTree Japan Hedged Equity Fund (DXJ - Free Report) , which offer exposure to Japanese equities. Buffett’s recent trip to Japan showcases his interest on that country’s investment world.
Will Pain in Commercial Real Estate Go Away Once Rates Cool?
Buffett pointed out that the commercial real estate market is beginning to experience the repercussions of high borrowing rates. He explained that the market value is primarily determined by the amount one can borrow non-recourse, and the consequences of this are now surfacing. Buffett mentioned that this mindset is prevalent among prominent real estate business players, which often leads to lenders acquiring the properties. Although they may not desire the property, banks tend to adopt a "extend and pretend" approach.
Buffett emphasized that this situation has ramifications, as individuals who previously borrowed at 2.5% are now realizing that it's unsustainable at current rates. Consequently, they end up returning the property to the entity that financed its construction. With the Fed giving signals of slowing down the rate hike momentum, the commercial real estate may bounce back over the medium term.
However, investors should be cautious with their real estate investments, if you are fan of Buffett. For those interested in following Buffett's cautious stance, they can short the segment with products like ProShares UltraShort Real Estate (SRS - Free Report) and ProShares Short Real Estate (REK - Free Report) .
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During the weekend, Berkshire Hathaway held its annual general meeting, where legendary investors Warren Buffett and Charlie Munger shared valuable investment insights. The company announced a remarkable $35.5 billion net profit for the first fiscal quarter, with its cash reserves exceeding $130 billion. Let’s discuss some of the highlights of the meeting.
US Dollar Still King: Buffett's Confidence in Reserve Currency
Despite concerns about the debt ceiling, Warren Buffett expressed confidence in the US dollar as the reserve currency. He doesn't see any other option to replace it. This viewpoint offers an endorsement of the strength of the US dollar, despite the challenges faced by the national debt. Investors can consider ETFs that track the US dollar, such as the Invesco DB US Dollar Index Bullish Fund (UUP - Free Report) .
Apple: A Better Business Than Any Berkshire Owns
Buffett spoke highly of Apple, a company in which Berkshire Hathaway owns nearly 6%. He referred to Apple as "a better business than any we own" and expressed regret over selling some shares years ago. Recently, Apple came up with upbeat earnings result too. To follow Buffett's confidence in Apple, investors can look into ETFs that have significant allocations to the tech giant, such as the Technology Select Sector SPDR Fund (XLK - Free Report) or the Vanguard Information Technology ETF (VGT - Free Report) .
Japan: A Land of Opportunities?
Warren Buffett has shown interest in Japanese trading firms, specifically Mitsubishi Corp., Mitsui, Itochu Corp., Marubeni, and Sumitomo. He increased his stakes in each of these companies to 7.4% and pledged to continue seeking opportunities in Japan. Investors looking to follow Buffett's footsteps can consider the iShares MSCI Japan ETF (EWJ - Free Report) or the WisdomTree Japan Hedged Equity Fund (DXJ - Free Report) , which offer exposure to Japanese equities. Buffett’s recent trip to Japan showcases his interest on that country’s investment world.
Will Pain in Commercial Real Estate Go Away Once Rates Cool?
Buffett pointed out that the commercial real estate market is beginning to experience the repercussions of high borrowing rates. He explained that the market value is primarily determined by the amount one can borrow non-recourse, and the consequences of this are now surfacing. Buffett mentioned that this mindset is prevalent among prominent real estate business players, which often leads to lenders acquiring the properties. Although they may not desire the property, banks tend to adopt a "extend and pretend" approach.
Buffett emphasized that this situation has ramifications, as individuals who previously borrowed at 2.5% are now realizing that it's unsustainable at current rates. Consequently, they end up returning the property to the entity that financed its construction. With the Fed giving signals of slowing down the rate hike momentum, the commercial real estate may bounce back over the medium term.
However, investors should be cautious with their real estate investments, if you are fan of Buffett. For those interested in following Buffett's cautious stance, they can short the segment with products like ProShares UltraShort Real Estate (SRS - Free Report) and ProShares Short Real Estate (REK - Free Report) .