The investment legend, Warren Buffett, officially retired as of this week by relinquishing his title of Chairman of Berkshire Hathaway after stepping down from the Chief Executive Officer (CEO) role earlier on January 1. His timing could not have been more perfect as he often excels in everything that he does.
Of course, he has seen it all and it is not the “market madness” that is causing him to leave. It is as simple as his age demanding it. He turned 96 on August 30. He must have felt that ‘enough is enough’. The fact that he continued till this ripe age in itself is quite astonishing. Most people would not. Only a man of mettle like him can.
Advanced Micro Devices (AMD) reached the new all-time high yesterday and hit the market cap of a trillion dollars. I had been waiting for sometime now that how come it has not happened yet in the midst of all market craziness. It finally did!
Another feather in the cap of the “Mr. Market” gone mad! So sad!!
That, too, after having witnessed couple odd things pertaining to SpaceX (SPCX):
1) Company going public back in June so prematurely
2) Valuation of a multi-trillion-dollars and
3) Inclusion of a security in major market indices only to help decimate many portfolios in not-so-distant future.
What bigger evidence than that one would want in today’s world gone crazy, especially in “good ole’ USA” and we are not going to the highest political office in America at this time.
I have been rooting for the markets to “stop” its madness for a little over 3 years now or since the summer of 2023. Quite foolish of me! As a great economist and capitalist, John Maynard Keynes, said that the “Markets can remain irrational longer than you can remain solvent”. I have learned this lesson once again – second time and probably the last time – first after the dot com mania and secondly this time after about 25 years.
The exclusive club of trillion-dollar market cap now boasts 12 companies for its much-coveted membership with AMD being the latest entrant yesterday.
The old adage of “easy come, easy go” saying will eventually apply to these “unstable, weak or undeserving” members such as AMD, Micron (MU) and Tesla (TSLA) and most likely Eli Lilly (LLY), the odd ball in a tech-crazy world just as it kicked-out Walmart (WMT) after a ‘fling’ for brief period.
Insanity surrounding AMD is just as astounding as it sells now at the price-to-sales ratio of 24 over 18 for the market behemoth Nvidia (NVDA) and Artificial Intelligence (AI) darling for quite some time now. Oh, well, it all began with Nvidia and it would not be too surprising if it all ends with AMD and Micron creating a classic ‘top’ for the market. I am anxiously waiting for the sane heads to prevail once again in the very market, my beloved, that they have hijacked.
This is all while many great companies or rather opportunities are available at insanely low or attractive valuations including some tech companies, more specifically in the software space depicting quite a dichotomy of the market. Generally, everything is high or everything is depressed in the market given the mood of Mr. Market. However, that is not the case this time around. It is a roaring bull market for some securities while equally depressing and outright disgusting bear market for some. Extreme bipolar personality of Mr. Market at its worst is on display for some time now and that feels like an understatement.
Moral compass of institutional investor class as a whole is downright appalling driven by extreme greed and fear to the detriment of ordinary investors as well as average American who does not even invest in the market or having no slice of the proverbial American Apple pie (American Dream).
Avarice of this level comes at a huge cost for the society to say the least. No wonder Warren Buffett always lived and still lives in Nebraska, far, far away from a typical Wall Street hustle and bustle. Hence, his quote is so apt that without integrity, presence of intelligence and energy do not matter.
We must brace for and be well prepared for an ugly, very ugly aftermath of this madness of a “few” on the Wall Street. The entire society and country will suffer in a major way, just as it did in the aftermath of the Great Financial Crisis (GFC) of 2008 created by the avarice of a few.
History is about to repeat once again as it always does, only much worse, as this a mother of all bubbles surpassing of all prior ones in terms of its magnitude and vastness alike. Wishing you the best!
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