Today we discuss the Final Warren Buffett Annual Letter as his recent shareholder letter has just released. We talk about Buffett Indicator’s warning of market overvaluation, and Berkshire Hathaway’s rising cash reserves as a sign of potential caution in the markets. We also share on the increasing prevalence of subscription-based business models, frustrations over companies charging both upfront and recurring fees for services and the decline in customer service quality. Today we discuss...
- Big tech companies like Google have transitioned from offering free services to charging for storage and other features.
- Some businesses push ineffective customer service to frustrate users into giving up on disputes.
- AI-driven customer service is currently ineffective but may be the only long-term solution.
- The Buffett Indicator suggests the stock market is highly overvalued.
- Berkshire Hathaway’s cash holdings are at their highest level in decades, signaling Buffett's cautious stance.
- Buffett has been selling off major holdings like Apple and Bank of America.
- An imminent crash isn't certain, but current valuations suggest a major correction could happen eventually.
- The new administration brings uncertainties, disruptions, and a mix of good and bad outcomes.
- Markets remain expensive, even with a potential 30% drop, which would still not bring valuations to historical lows.
- Unlike past bubbles in tech (2000) and housing (2008), current market conditions do not show excessive leverage or structural financial weaknesses.
- The markets may stay flat for several years as a form of correction rather than experiencing a sharp crash.
- Warren Buffett’s long-term strategy emphasizes holding cash to remain opportunistic rather than out of fear.
- Market volatility is increasing, particularly in crypto, but recent overall movements remain relatively mild.
- Investors should recognize that percentage declines translate into significant dollar losses as portfolios grow.
- Buffett’s Berkshire Hathaway has maintained strong financial performance, particularly in insurance, despite market challenges.
- Buffett's past standards for measuring success (10-year rolling average) are no longer being met, raising questions about future performance.
- While historically successful, Buffett’s recent decisions and investment strategy face growing hurdles.
"Cash is not trash... Cash is King" - Kirk Chisholm
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Today's Guest: Kirk Chisholm
Kirk Chisholm is a Wealth Manager and Principal at Innovative Advisory Group, an independent Registered Investment Advisor located in Lexington, MA. He has been providing wealth management services to individuals, executives, entrepreneurs, and their families since 1999. He is an outside the box thinker, risk manager, inflation expert, blogger, podcaster, and all-around interesting guy. Kirk is dedicated to developing lasting relationships with all of his clients and their families. One of the benefits of working with Kirk is his patience, empathy, and his ability to provide clear and easy-to-understand explanations to complex financial topics.
Kirk developed a unique philosophy for the wealth management industry called Risk Management First. The medical field has a similar way of thinking of “first do no harm”. This philosophy focuses on risk management for clients in all aspects of their lives in ways the industry does not address. Risk management does not stop with investments. It also requires working closely with other professionals to address areas of their financial lives not currently being met.
In 2008, Kirk co-founded Innovative Advisory Group to address the needs not being addressed by the wealth management industry. It started with specializing in alternative assets held in retirement accounts (i.e. self directed IRAs/401ks). Then the company expanded into the specialization of college funding (i.e. planning, strategy, and paying the least possible for a high quality education), Risk Management First, exit planning for business owners, advanced planning (estate, tax, etc), and providing practice management and leadership training to other financial advisors, accountants and attorneys.
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Today's Panelists
- Kirk Chisholm | Innovative Wealth
- Douglas Heagren | Mergent College Advisors