Yahoo Finance

So, let's start with shares of Berkshire Hathaway stock down about 7% today, uh, but it's been a name that has really outperformed the market. Here, it's up about 13% in the first quarter, while the S&P was down about 10% over that time. Now, in February, Warren Buffett revealed in his annual letter to shareholders that the company's cash pile had ballooned to over 300 billion dollars. He didn't exactly say he was worried about the market, but his actions certainly spoke louder than his, uh, words in that situation. Buffett has famously said, of course, be greedy when others are fearful. Lot of fear out there today. We were just looking at the stock chart before. Um, I, I guess, I think there was a sense, maybe, and maybe I'm just imputing this on people where it didn't exist, but you know, Buffett's sitting on cash. Market went up 20% two years in a row. What's this guy doing? Has he lost his fastball?

Here we are, three weeks later, and it's like, oh, you know, I guess he still got it.

How long have we been hearing that conversation?

Forever.

I'm biased here, too, because I'm a longtime Berkshire, uh, shareholder. And, uh, I do think that that in market moments like this, the, the typical Berkshire Hath, uh, uh, uh, buy holder becomes a Berkshire buyer. And they sit around for years just waiting for the day they can buy some. They, they look, they wait for a market down 20%, and they buy it. They've got a rule. And I think that you see that happen across the market.

And it's very clear we still have another leg down on this market. Buffett's going to move in. I mean, I'm, I'm seeing talk about people who are thinking, well, you know, three, five rate cuts, maybe we'll go into housing stocks. They were up today, right?

But you take a look at Berkshire Hathaway, and you think, yeah, I, I can remember what he did, the way he stepped up.

Stepped in.

in '08.

We were, we were all there.

And he's going to do it again here pretty quick. And those investors will look prescient here.

Remember all those great convert deals he did?

Oh, yeah, completely.

Like all the Bank of America.

Goldman Sachs, yeah.

The Goldman one was the one I really, uh, was focused on.

At the time, I was working at a short-only fund, one of the biggest in the world. And you know, they'd, every day, you'd see something in the tape that you couldn't believe, like Lehman going under, right? You'd see these things that were just amazing, but those were like, wait, he's getting what deal?

The warrants. Remember the warrants he got? And immediately, everybody, everybody started criticizing the government.

Yeah, it was crazy.

warrants they didn't get from Fannie and Freddie.

Ended up one of the biggest shareholders.

I'll just lob it in real quick. Um, I, I do think that we've heard some things from President Trump about TikTok saying the government wants a piece of this deal. And that could be one of the things holding it up because the notion that the government could be criticized for not being a part of the deal, as if the government's ever done that, doesn't really do that, unlike say, Singapore or something where they've got sovereign wealth funds that are constantly making deals. That could be an issue with TikTok as well. I do not expect Warren Buffett, however, to emerge in the TikTok bidding.

No.

If he does, if he does.

Um, all right. Uh, next up, let's take a look at, at two stocks. They've gotten hit hard by tariffs, but I think the real story here is they're basically trading at 10 year lows, and they are big consumer names that you know. And that is Nike and Disney. Let's start with Nike. Now, this stock is actually up about 6% today. Now, we had President Trump saying that Vietnam, where the footwear giant has a large manufacturing presence, was willing to eliminate tariffs to avoid some new US levies. So there's the beginning of some kind of negotiation. Jared was talking earlier about consumer discretionary being the best worst performer on the day. Nike certainly helping there. But let's also take a look at Disney. That stock is down over 5% today, one of several media companies that's gotten hit. Trump tariffs won't directly impose new costs on Hollywood, but analysts say, of course, rising costs and potential recession would lead to consumers cutting discretionary spending, media, entertainment, um, and it's going to prompt marketers, perhaps, to scale back advertising budgets. Also, here you have Disney, you know, the best of its media peers, maybe rerating towards some of those other names. And I, I just looked at these two stories, and, you know, we have the Nike news today, but you go out on the street, you say to someone, "Oh, Nike, Disney, those must be great companies." And I, I think that what's so interesting in these market moments is they're trading at 2015 levels. Like this is a broken story for a longtime shareholder, uh, and perhaps, maybe it's not underappreciated. To me, it's underappreciated in the market. These are, this is a bad situation.

Those are very good firms that you're probably going to be able to, to acquire at a cheaper price in a number of days. Look, the minimum 10% tariff that I don't think's going away is a $410 billion tax hike, essentially on consumption. A very inelegant consumption tax, but nevertheless, that's going to hit somebody who owns entertainment centers like Disney. Now, you know, Nike's lumped in with a number of different firms that moved out of China to Vietnam during Trump one, and they're getting hit now. I actually think that's what the president was out today because he, he's, he's trying, in his own way, to, to sort of pave the way towards a potential off ramp. But I do feel bad. It's not just for that company. Companies like Lululemon that are sitting there just getting shellacked because they're in Vietnam.

Yeah. Um, I also think that different companies, as it relates to Disney, right? So maybe one of the best CEOs, I think, in all of, in all of business, uh, in Bob Iger, for now. Um, but when you think about the consumer of the parks in particular, or, you know, that, the places is going to hit the US consumer, the rising inflation is going to hit them, is in discretionary spending first. Right? It's the first thing to go. So going to Disneyland or Disney World, that's, that's, I, I used to do that when my kids were little, and these are, these are expensive trips. Those things are going to pull back, guaranteed, right? That, that's going to really hurt Disney. You've also got the effects in Disney, Disney in, in Europe, Disney in, in China. Um, so Disney parks are in a rough situation here. Probably so is the notion that consumers who are subscribing to a service besides Netflix will be subscribing to ESPN, Disney, Hulu.

I mean, look, within two quarters, personal disposable income's going to go negative because of the consumption tax that's been put on the American public. I mean, there's a lot of other companies that are going to get ensnared in this, and that's just the unfortunate situation. And that doesn't even include retaliation or this, or the, the, the punitive trade taxes that Trump's put on the other 60 countries. So we'll see how this all pans out, but it's not going to be good for discretionary spending going forward.

Couple easy clean ways to see, you know, how investors think that might play out in the early going.