Not even Warren Buffett or his right-hand man Charlie Munger can quell the crypto craze.
Bitcoin came up at
annual meeting, which has become an annual pilgrimage for value investors. An as value investors, Buffett and Munger don’t get cryptocurrencies.
“I don’t welcome a currency that’s so useful to kidnappers and extortionists and so forth,” said Munger after Buffett passed on the Bitcoin question. “I think the whole development is disgusting and contrary to the interest of civilization. And I’ll leave the criticism to others.”
If that isn’t criticism, crypto enthusiasts don’t want to see Munger really unload.
Munger’s observations, however, are having less than no impact—Bitcoin is up 3.4% to $58,938. That shouldn’t surprise anyone. Value investors, the kind that revere Buffett and Munger, aren’t the ones pouring money into Bitcoin and other cryptos.
And other cryptos is where the action really is. Ethereum, the second-largest crypto by market value with a total market capitalization of roughly $367 billion, is up another 6% Monday, cracking the $3,000 barrier.
And at least for now, cryptos have the upper hand versus value investors. Bitcoin is up about 100% in 2021 and Ethereum is up about 330%. The
Russell 1000 Value
stock index is up “just” 15%.
Don’t expect that to get Munger to change his mind.
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Buffett Talks Inflation, Robinhood, Airlines, and Taxes
Berkshire Hathaway CEO Warren Buffett said at Saturday’s virtual shareholders meeting that the U.S. is likely “seeing very substantial inflation,” with rising commodities costs and higher prices across industries. “This has been a very unusual recession,” he said, according to the Financial Times.
- Buffett’s conglomerate reported $11.7 billion in profit for the first quarter, boosted by railroad, energy, and utility operations and gains in the investment portfolio. Berkshire bought $6.6 billion of its shares in the quarter. The stock is up more than 18% this year.
- Greg Abel, long considered to be a potential successor, is likely to take over the helm of Berkshire Hathaway should anything happen to Buffett, CNBC reported.
- Buffett criticized Robinhood Markets for “taking advantage of the gambling instincts of society,” saying, “it creates its own reality for a while, and nobody tells you when the clock is going to strike 12 and it all turns to pumpkins and mice.” Robinhood plans an IPO this year.
Again, Buffett defended his sale of airline stocks last year. The move came before the industry’s federal bailout, he said, when Berkshire held positions of about 10% in
and bankruptcy was a risk. “I’m the chief risk officer of Berkshire,” Buffett said.
What’s Next: Asked about President Joe Biden’s plans to raise taxes on corporations and some inherited assets, Buffett said corporate tax rates have previously been much higher. He said when he dies, “99.7% will either go to philanthropy or the federal government. I would prefer it go to philanthropy.”
—Janet H. Cho
Nearly Two-Thirds of Americans Are Optimistic About the Future Under Biden
An ABC News/Ipsos poll says 64% of Americans are optimistic about the country’s future under President Joe Biden, while 36% are pessimistic. ABC News said Sunday that the country hasn’t been that optimistic since December 2006, when 61% of people said they liked where the country was headed.
- Biden wants Congress to pass more than $4 trillion in bills boosting infrastructure, jobs, caregiving and education and pay for it by raising taxes on the wealthy and corporations. In ABC’s poll, 52% percent of respondents said the government should spend to help the economy recover, while 47% said taxes should stay at current levels.
- The survey found that 95% of Democrats said the nation is more united, while 97% of Republicans said it is more divided. The poll of 513 adults was conducted in English and Spanish from April 30 to May 1.
- Of those polled, 51% said Biden is compromising the right amount with Republicans, 39% said he is doing too little, and 9% think he is compromising too much. Two-thirds think the Republicans are doing too little to work with Biden, while 10% said they are doing too much.
- Biden senior adviser Anita Dunn said Sunday of Biden’s infrastructure bill that the president “wants to move this package forward in a bipartisan way, if that’s possible,” adding that “his red line is inaction, that we cannot afford not to make these investments in America’s economy.”
What’s Next: Biden meets with Sen. Shelley Moore Capito (R., W.Va.) and others about the infrastructure package this week, chief of staff Ron Klain said Sunday. Biden’s infrastructure plan costs $2.3 trillion over eight years, while the Republicans proposed a $568 billion infrastructure plan.
—Janet H. Cho
India, Others to Ask Drugmakers to Share Vaccine Formulas This Week
As India’s daily new coronavirus cases topped 401,000 over the weekend, per Johns Hopkins University data, critics are asking whether the U.S. and other nations are doing enough to help fight the world’s worst Covid-19 outbreak.
- India expanded vaccinations nationwide to all adults on Saturday, but several states and territories ran out of doses. Almost 27.3 million Indians are fully vaccinated, but that’s still only 2% of the population. Deaths in a 24-hour period reached 3,689, and some say figures are underreported.
- On Sunday, the northern state of Haryana imposed a complete lockdown through May 10, with only grocery stores, pharmacies, and emergency services allowed to open. Delhi extended its lockdown through May 10, and the eastern state of Odisha is locking down for two weeks starting May 5.
The U.S., which will restrict foreign travel from India starting Tuesday, is sending more than $100 million in aid, including ingredients to make 20 million doses of
- National security adviser Jake Sullivan told ABC on Sunday that “we believe that the pharmaceutical companies should be supplying at scale and at cost to the entire world so that there is no barrier to everyone getting vaccinated.”
What’s Next: India and South Africa are leading efforts by about 60 developing nations to ask the World Trade Organization to lift intellectual property rules for vaccine production, in a proposal expected this week. AstraZeneca,
Johnson & Johnson
oppose the waiver, saying producing vaccines requires extensive technology, capacity and resources.
—Janet H. Cho
Another Big Week Ahead for Earnings and Economic Data
It’s another big week for earnings, with 130 companies on deck to report. So far, 87% of the
companies to report have beaten expectations, according to CNBC. Up next: pharmaceuticals, auto makers, and travel-related companies.
Analysts expect Pfizer revenue to surge 13%, to $13.6 billion, but EPS of 78 cents to be slightly below the same period last year, according to FactSet. Fellow Covid-19 vaccine maker
is expected to be profitable, with EPS of $2.39 on revenue of $2 billion.
which is aiming to produce all electric vehicles by 2035, is expected to report a 69% jump in first quarter profit, to $1.05 a share on revenue of $33 billion, according to FactSet.
reported better than expected results last week but said the global chip shortage will cut into planned production this year.
are also on deck this week as the hospitality industry struggles to recover from the pandemic shutdowns. Hotels got a boost last week after NYC’s mayor said the city would fully reopen in July.
What’s Next: Investors await the week’s main economic event: the U.S. jobs report for April, which comes out on Friday. The Bureau of Labor Statistics is forecast to report a gain of 975,000 nonfarm payrolls in April, and an unemployment rate of 5.8%, down from 6% in March.
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