Ending
Warren Buffett signs off amid AI hype jitters. But as the Berkshire chief reminds us, resilience is part of the package when it comes to a long-term investing strategy.
It’s the end of an era. Warren Buffett delivered his final letter to Berkshire Hathaway ($BRK.B) shareholders on Monday.
‘I will no longer be writing Berkshire’s annual report or talking endlessly at the annual meeting. As the British would say, I’m going quiet,’ he said.
Buffet’s not walking away entirely. He’s keeping hold of his Class A shares until investors are comfortable with Greg Abel as CEO. But he’s speeding up plans to give away his fortune, converting 1,800 Class A shares into 2.7 million Class B shares – worth around US$1.35B – for his kids’ (aged 72, 70 and 67) charitable foundations.
For decades, the Oracle of Omaha’s wisdom has steadied markets through storms. As he ‘goes quiet,’ investors are losing a rare voice of reason… just when confidence feels shaky again.
‘The Big Short’ investor Michael Burry’s US$1.1B bet against Nvidia ($NVDA) and Palantir ($PLTR) sparked fears of an AI bubble and sent Wall Street’s biggest names lower last week. It was the Nasdaq's worst trading week since April… until the AI trade came roaring back on Monday.
Burry estimates that hyperscalers will understate depreciation by US$176B in the next two years. Many market pros aren't too worried. State Street’s Anna Paglia is one of them: she told CNBC it was ‘too early’ to bet against the AI trade.
Still, some are looking beyond Nvidia when it comes to the AI realm. SoftBank, for instance, sold its entire stake in Nvidia for US$5.8B to fund its commitments to OpenAI and Stargate. The move sent $NVDA down 3% on Tuesday.
Whether it’s Buffett bowing out or AI momentum cooling, it feels like changes are everywhere this week. Another one in Washington might finally bring relief: after weeks of gridlock, the Senate passed a deal to end the longest U.S. government shutdown in history.
Markets tend to wobble as leadership changes and narratives shift, but endings often set the stage for the next rally. Maybe Buffett puts it best in his parting message:
‘Our stock price will move capriciously, occasionally falling 50% or so as has happened three times in 60 years under present management. Don’t despair; America will come back and so will Berkshire shares.’
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