Berkshire Cash Hoard

WeWork Bankruptcy

Before we get to the trackers we wanted to touch a few things, first up lets look at a few Berkshire charts that we have seen floating around. This first chart shows a clear propensity to take profits and accumulate cash over the last 5 years. This tells us two things:

1. Berkshire has a tremendous amount of shares spread across multiple equities and they are merely taking a few chips off the table as these equities rise, nothing uncommon. This stands out because of the sheer increase in the dollar value of these holdings, which are an output function of the FRBs asset base increase input function. Remember the FRB balance sheet is +12% annualized over the last 25 years, about the same return as BRK.B

2. Many in media are taking this cash build as a sign there isn’t much Warren B wants to invest in at this time and a sign of over valued markets. Yes we would agree this is a sign of that, but let’s remember WB is a value investor and invests prudently over time, we would suspect a very large cash build as money gets debased over time, to then be deployed into real assets once said debasement starts to accelerate…we are not at that point, yet.

So we take this as nothing more than cannon fodder for better valuations and not a sign of an impending collapse, rather a sign of how much capital is concentrated in a very few hands, the likes of BH, Vanguard, State Street, BlackRock, etc:

The other chart for BRK we wanted to show was this one from Zerohedge:

The markets are likely looking for this to flip green again, for the next bull run, will just have to see if that transpires.

Another notable item this week is the Commercial Real Estate market, this continues to plague the regional banks and this weeks WeWork bankruptcy puts the industry further under the microscope. This overvalued pig from the start was doomed to fail, even Forbes got it right when they posted this article 4 years ago:

Link to the article is found here, Forbes WeWork IPO Article

Even TradingView posted this on X today about WeWork:

To which I aptly replied, Neumann made out quite handsomely, borrowing nearly $500m at rates less than 1% and cashing out, to only see it dead after 4 years isn’t exactly or shouldn’t be a surprise, but haters shouldn’t hate the player for playing the Wall Street game of first in first out, cashes in cashes out, because that is how the system is designed, unfortunately.