Table of Contents
- 1 ‘Sage’s choice is Domino’s Pizza
- 2 Nuclear power plant, Tesla expected to benefit from Trump
- 3 Big players expanding Korea’s defense industry
- 4 What does Warren Buffett mean when he compares the stock market to baseball without strikes, and how can this analogy help investors navigate today’s volatile market conditions?
Photo = Yonhap News ‘Sage of Omaha’ Warren Buffett, Chairman of Berkshire Hathaway, said the stock market is “like baseball without strikes.” It means to let go of impatience and wait for a ‘good ball’ to come and swing the bat. There are not many investors who can trade according to his advice. It is more difficult to maintain composure in the recent stock market situation where uncertainty and volatility have increased. This is the reason why the number of investors looking for portfolios of ‘investment giants’ has increased. The 14th of this month is the day, only four times a year, when the quarterly investment stocks of American institutions are revealed. Big players lowered their proportion of big tech and focused on consumer goods, power, and China-related stocks. Graphics = Reporter Heo Rami
‘Sage’s choice is Domino’s Pizza
According to the U.S. Securities and Exchange Commission’s (SEC) 13F (quarterly investment report for institutions with $100 million or more in assets under management) disclosure on this day, Berkshire Hathaway reduced its largest holding of Apple stocks by 25% from 400 million shares in the third quarter to 300 million shares. As of today’s closing price, this amount is equivalent to $22.822 billion (approximately 31.98 trillion won). Morningstar analyst Gregory Warren said, “This is a measure that takes note of the deepening conflict between China and Taiwan, which are major production bases and sales destinations.”
It is also noticeable that cash holdings have increased. Bank of America’s proportion was lowered for four consecutive quarters, and cosmetics distributor Ulta Beauty’s stock sold 96.59% of its holdings. By increasing profit taking, Berkshire Hathaway’s cash holdings reached $325 billion (about 455.65 trillion won). It’s the highest ever.
However, Domino’s Pizza and swimming pool equipment company Pool Corporation added $549.4 million (about 770 billion won) and $152.25 million (about 213.2 billion won) respectively. Domino’s Pizza’s stake was secured up to 3.65%. On Wall Street, these are stocks that are opposed by the opinion that they will be directly hit by a recession in consumption and the view that profitability can be defended through business expansion. Domino’s Pizza’s stock price fell 16.64% in the second half of the year, while Full Corporation’s stock price rose 16.95%. In after-hours trading on the day when Berkshire Hathaway’s purchase was announced, they rose 7.62% and 5.68%, respectively.
Nuclear power plant, Tesla expected to benefit from Trump
Other local big players also revealed their own investment strategies. Scien Asset Management, led by Michael Burry, the real-life protagonist of the movie ‘The Big Short’, bet on the Chinese market. E-commerce companies JD.com, Alibaba, and Baidu each increased their stock depository receipts (ADRs) by up to two times. I also bought put options (right to purchase) to prepare for a decline in stock prices. The analysis is that the economic stimulus package announced by the People’s Bank of China last September was used as an event. These stocks, which continued to rally 28-48% in September, fell 19-27% after peaking on the 7th of last month. The Chinese government is expected to introduce additional stimulus measures.
In the second half of the year, Microsoft, Amazon, and Eli Lilly, a leading obesity treatment company, whose stock price movements were sluggish, were major disposal targets of prestigious investment companies such as Bridgewater Associates, Duquesne Family Office, and Blackrock. Instead, nuclear power company Constellation Energy and Tesla, which are considered beneficiaries of President-elect Donald Trump, filled the purchase list. Expanding nuclear power is a major pledge of the new Trump administration.
Tesla is attracting attention with CEO Elon Musk being appointed as the U.S. Secretary of Government Efficiency. Pershing Square Capital, led by ‘Little Buffett’ Bill Ackman, purchased $1.4 billion (about 1.96 trillion won) worth of Nike, whose stock price fell 29.39% this year. Nike, which is suffering from poor performance, is currently starting to improve its structure by carrying out large-scale restructuring and replacing its CEO.
Big players expanding Korea’s defense industry
The portfolio that acts as a rudder in the domestic stock market is the National Pension Service. According to the Financial Supervisory Service’s Electronic Disclosure System on the 6th, the National Pension Service increased its proportion of securities stocks, construction stocks, and shipbuilding stocks this month. The main stocks are Samsung Securities(12.94%→13.06%) and HDC Hyundai Development Company(12.14%→12.33%), STX Engine(8.25% → 8.67%), etc.
Samsung Securities’ high dividend yield, which will reach 7.7% next year, and HDC Hyundai Development Company’s reflection of its own development business performance are expected factors. STX Engine, which manufactures warship engines, is evaluated to have great potential to benefit from the expansion of the marine defense industry market. A semiconductor-based manufacturer that recently caused controversy with a paid-in capital increase worth 550 billion won and a belated ‘owl disclosure’ Isupetasis The stake was reduced from 10.05% to 9.2% on the 15th. The trading trends of ground-based defense stocks, in which large global players have increased their stake in the domestic market this year, are mixed. On the 11th, Black Rock Hyundai Rotem It was announced that the stake had been reduced from 5.37% to 4.33%. As the stock price rose 68.75% in the past six months, it started taking profits. Last March, Singapore Investment Corporation (GIC) increased its stake to 6.37%. LIG Nex1In September, U.S. investment company Artygen Partners announced that it owned a 5.02% stake. The stock price growth rate over the past six months is 48.15%, which is lower than that of Hyundai Rotem.
Reporter Lee Si-eun see@hankyung.com
Question 1: What is the significance of Warren Buffett’s comment about the stock market being like baseball without strikes and how does it relate to the current volatile market situation?
Question 2: How did Berkshire Hathaway’s investment strategy change in the recent SEC disclosure, and what might this mean for their future investment decisions?
Question 3: What are some of the notable additions and reductions in Berkshire Hathaway’s portfolio, and how do they compare to previous investment trends?
Question 4: What are some of the other notable changes in institutional investors’ portfolios, such as Michael Burry’s bet on the Chinese market and Pershing Square Capital’s purchase of Tesla stock?
Question 5: How is the National Pension Service’s portfolio changing, and what are some of the factors contributing to these changes?
Question 6: How do the investment trends of large financial players like Samsung Securities and Hyundai Rotem reflect global economic trends and market conditions?
Question 7: With the upcoming Trump administration’s focus on nuclear energy and defense spending, what opportunities do these sectors present for investors, and how might they shape institutional investment strategies in the future?
