The market tends to be (but is not always) out in front of economic data, which may be one reason why the recent string of negative numbers has done little to undermine the rally. Beyond that, when I look at the monthly chart of Berkshire Hathaway, which I previously discussed at length in this post, I see the makings of major breakout this month. Obviously, July is young and the Buffett bulls need to follow-through on this move up and out of the massive symmetrical triangle.
With that in mind, though, it is far more difficult to be bearish on equities if Berkshire continues to break out, regardless of economic data that could easily have been lagging the tape for months.
Watch Berkshire to see if this breakout sticks, as the upside potential here is awesome and likely foreshadows the resurgence of the bull overall. A break and hold above $131,500 would be an excellent trigger.
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Hasn’t Warren publicly stated he will begin to buyback shares if the BV falls below a certain level? If there’s a floor there, prob not a good indicator of overall market, right?
I disagree with your premise. Have a look at how many firms bought back shares in (pre-crash) 2008 and then question whether there really is a “floor” due to share buyback programs.
Buffett>Clam. Its time for the new American Capitalist to claim what is owed him.
JULY 4 RALLY rolls sweet off my tongue. I think ill write about this for my kids I don’t have
Hoping that breaking out Berkshire could indicate healthier market, but it should be noted that Berkshire bottomed in March 2000, just as the Nasdaq was topping.
True, but I have argued in recent years that Berkshire has changed to more economically-sensiitve businesses and less defensive. I think it is much more tethered to the broad market now than during the dot-com bubble.
Good point–Burlington Northern, Lubrizol, etc.
Wasn’t it just this last January that all the talking heads were talking about Warren losing his touch because he underperformed the market by about 1%? Very, very short term memories!