Comment by buybuybuy

1 day ago

Should we all buy stock in Nvidia now? It’s not like Peter Thiel is Warren Buffet or anything. And Warren Buffett is buying Alphabet.

14 comments

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TheAlchemist  1 day ago

Warren Buffett is buying Alphabet out of neceessity - he already sold most of what he could sell and has way too much cash on hand - he just need to buy 'something' - Alphabet seems like the least overvalued big stock out there.

  • drumhead  1 day ago

    Berkshire is sitting on nearly $350 billion in cash. One of the ratio's that Buffet uses to measure overvaluation, Wilshire 2000 Market Cap as a % of GDP is at an all time, 220%. Its usually a good indicator of a market top. He's making a few small investments, but he's just waiting until there's more of sell off before heading back in. He's under no pressure to buy anything.

  • scarmig  1 day ago

    Is he required to buy stock? AFAIK he could just as well hold cash or bonds, and if he believes a bubble pop is imminent (within the next couple months), that would be a responsible move.

    • Deegy  1 day ago

      Not required of course. This move to finally move some of his cash horde into equities could be a result of the US governments recent announcement that they're ending their quantitative tightening policy. This likely signals a move back to a period of quantitative easing which could cause assets to continue to inflate while the value of the dollar continues to erode.

      Basically he could just be trying to protect the value of his dollars by putting them into a very stable company that also has exposure to the upside of AI.

      2 replies →

    • pojzon  1 day ago

      Thing is, people dont know what will happen if this bubble bursts.

      Its so big that it could take with it whole global market.

      There is no safe asset you can turn into in such a case, digital money would literally mean nothing when whole financial system collapses.

      4 replies →

Ekaros  16 hours ago

Always also calmly analyse what is the upside left. Especially if the stock has such huge valuation like Nvidia. My guess is probably not at this point.