Berkshire’s Munger Strike
Berkshire Hathaway (NYSE: BRK.A) had a shareholders meeting this weekend.
And we should care because?
Agreed. No one cares about Berkshire events. I mean, the stock trades north of $420,000 per share. Do you own BRK.A? If so, why are you reading me? Am I that entertaining? (I hope so.)
Anyway, Berkshire CEO Warren Buffett was his usual self, giving shoutouts on share buybacks — which Great Ones know I typically disagree with — and trying to be as nonabrasive as possible. That’s his schtick.
Berkshire VP Charlie Munger, however… Now that is a horse of a different color. His disdain for nontraditional investments is legend … wait for it … dairy. Just check out this quote from Saturday’s annual Berkshire shareholder meeting:
Of course, I hate the bitcoin success, and I don’t welcome a currency that’s useful to kidnappers and extortionists, and so forth. Nor do I like just shoveling out a few extra billions and billions of dollars to somebody who just invented a new financial product out of thin air. So, I think I should say modestly that I think the whole damn development is disgusting and contrary to the interests of civilization. And I’ll leave the criticism to others.
This man is more passive-aggressive than anyone I’ve ever met. Bitcoin is for kidnappers and extortionists? But he’ll modestly leave criticism to others? Are you $#@*!% kidding me?
First, Mr. Munger, with all due respect, have you heard of the U.S. dollar? It’s the worldwide favorite currency of kidnappers, extortionists, drug kingpins, etc. Sure, Visa claims to be everywhere you want to be, but the dollar actually is … and it’s in more than a few places you really don’t want to be.
The dollar is more moral than bitcoin? Seriously dude. Cocaine can be found on 80% of all U.S. currency, and you’re calling out bitcoin for its role in illicit activity?
Second, “out of thin air?” Sure, bitcoin isn’t based on anything at all. But what do you think backs the U.S. dollar? We left the gold standard back in August 1971. The dollar has since been a fiat currency. It isn’t based on anything at all. It’s not even based on thin air. It has no intrinsic value at all. Nada. Zip. Zilch. The same as bitcoin.
The only reason the dollar has value is because we’ve all decided it does. Sure, the U.S. government and the U.S. economy accept the dollar, so that counts for a lot. But if you wanted to cash those dollar bills in for something tangible other than products? Nope. Nothing. (Well, maybe Charlie Munger could. He’s got connections, after all.)
I dare you to walk into any federal bank and demand something of value for your U.S. money. They’ll laugh at you.
I have said this before, and I’ll say it again … loudly for the people in the back this time, which apparently includes Charlie Munger: Things have value because enough people believe they have value.
Bitcoin has value. Right now, despite Munger’s loud protestations, that value is about $57,800 per bitcoin. That’s what the market has agreed upon. Is bitcoin volatile? Yes. But it does have value.
Still … I get it. Bitcoin and crypto investing isn’t for everyone. It’s confusing. It makes no sense. They say to only invest in things you completely understand. And we all understand how AMD’s 7-nanometer semiconductors work, right? Who doesn’t?
What’s more, bitcoin is only up 480% in the past nine months. Who has time for that risky nonsense? Charlie Munger doesn’t … that’s for sure.
But then, you’re not Charlie Munger, are you? You aren’t sitting on a veritable fortune. (If you are … how you doin’?)
And since you are not Munger and don’t have a fortune, you shouldn’t be listening to investment advice from good ol’ Charlie. The person you should listen to is Ian “The Crypto” King.
According to Ian, an estimated $24 billion could be unleashed on the crypto market. It’s a move that could send certain cryptocurrencies — especially bitcoin — soaring.
With bitcoin heading back to all-time highs, we’re already seeing this scenario begin to play out. If you want to know how you can play this next wave in crypto to potentially multiply your money 12 times in just the next 12 months … then you have to check out Next Wave Crypto Fortunes right now!
The Good: Verizon’s Yard Sale
Spring has sprung … which means it’s yard sale season! It’s time to clean out your closets, basements and garages and drag all that unwanted junk to your front yard so that other people can buy it.
You may not think someone else will want that busted ol’ 65 inch TV that has lines in the picture, but someone will buy it … I guarantee.
Take Verizon Communications (NYSE: VZ), for example. It just sold several dot-com era relics for $5 billion! Who would have thought that Yahoo, AOL, TechCrunch, Engadget and Flurry would be worth that much?
Private equity group Apollo Global Management just walked in and bought the entire mess. Well … almost the entire mess. Verizon will keep a 10% stake in what used to be Verizon Media. Apollo will call the new company just Yahoo. And, let’s be honest, that’s the only household name in the entire acquisition. Good luck, Apollo. You’re gonna need it.
The good part of all this? Verizon is now a lean, mean 5G wireless machine. After dropping $45 billion on new spectrum from the FCC, Verizon could use the cash from this yard sale to continue building out its nationwide 5G network.
In other words, if you’re looking for a pure play on 5G wireless and all the bells and whistles that come with it, Verizon just jumped to the top of your list.
The Bad: Road Movie To Berlin
So, you know that gigafactory that Tesla is building just outside of Berlin, Germany? Yeah, if you were counting on that adding to production anytime soon, forget about it. It ain’t opening until at least the end of January 2022.
That’s another six-month delay for those keeping track at home. And I’m pretty sure all you Tesla bulls are keeping close tabs on stuff like this.
Originally, the Berlin gigafactory was supposed to open on July 1. Tesla expanded those plans to include a battery-cell factory on site as well, and permitting issues are now holding up construction. Still, Tesla said during last week’s earnings call that it was “making progress.”
Those reassurances are falling flat today, especially after Nio, Xpeng and Li Auto announced impressive April vehicle delivery numbers. TSLA dropped nearly 3% on the news.
See … this is the problem with being at the top of an emerging market. You have to fight for every inch of growth while your competitors ride your coattails and eventually overtake you.
If Tesla wants to remain the world leader in electric vehicles, it can’t afford too many more delays like Berlin.
The Ugly: We Have The Fake Meats!
Tyson Foods (NYSE: TSN) is the Ross Perot of meatless burgers. And if you get that joke, we should be friends.
If you didn’t … here you go.
The company launched its alt-meat portfolio back in 2019 but pulled its faux patties last year due to poor reception.
In all seriousness, the blended beef/plant patties confused everyone. They weren’t exactly not-meat, but they weren’t exactly meat either.
Meat eaters didn’t want them, and neither did those seeking alternatives. Kudos to Tyson for bringing both sides together in hatred for a single product. If we’d have been allowed to have family barbeques last year, maybe the in-laws would have finally found common ground. Anyway…
As you have probably guessed from the Perot joke, Tyson is back in. The mega-meat conglomerate will launch true meatless patties this year alongside meatless bratwurst, Italian sausages and ground meat — this time made from pea protein … so, ground pea patties?
According to Tyson, it’s new alt-meat patties have 21 grams of protein per serving, which is one gram more than Beyond Meat’s patties. Tyson marketing VP David Ervin loves this one-gram advantage, saying: “Our products are plants made meatier.”
Well … I certainly hope Tyson has more up its sleeve than what Ervin is bringing to the table if it hopes to compete with Beyond Meat and Impossible Foods. Yikes.Great Ones, I hope you’re ready for an earnings bonanza this week. Holy cats, there are a lot of companies reporting this week.
I mean, just take a look at this insane list from Earnings Whispers:
So, which companies are we watching this week?
All of them. Just kidding.
I’ll also be looking for guidance out of Uber. The company saw a boom in Uber Eats revenue during the pandemic, but that is sure to slow down now that everyone is traveling out and about. Will Uber’s ride-hailing business finally make a comeback? Inquiring minds want to know.
Elsewhere, I’ll be paying close attention to Rocket Companies (NYSE: RKT) to see if home mortgages are finally slowing down with housing prices near record highs and AMC Entertainment (NYSE: AMC) for guidance on theater revenue as the pandemic winds down.
Are there companies reporting in this week’s mess that you particularly want to see covered?
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Editor, Great Stuff
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