Reference Message Network reported on April 9 according to a report on April 7 on the website of German news television channel. US President Trump's tariff policy has wiped trillions of dollars off the stock market, but he appears to be in full control. He reposted a video on "Real Social" claiming that even legendary investor Warren Buffett believed that Trump was implementing the best economic measure he had seen in over 50 years.
Berkshire Hathaway, which Buffett oversees, immediately denied it. On the contrary, Buffett had severely criticized the plan just days before Trump announced the large-scale tariffs. During an interview with CBS, he called Trump's tariffs "an act of war" and referred to America's negative experiences with tariffs in the past.
Notably, Buffett is the only super-rich person in the U.S. who has prepared for the wealth of himself and his shareholders for the current stock market crash. Among the top ten billionaires on the Bloomberg Billionaires Index, only Buffett has seen an increase in his wealth this year.
Buffett has prepared for the decline of the U.S. stock market. Last year, when the stock market surged after Trump's victory, Trump's supporters expected the promised tax cuts to bring more benefits. However, Berkshire Hathaway sold a large number of stocks and increased its cash holdings by about $130 billion. Currently, Berkshire Hathaway holds more than $330 billion in cash reserves, holding more cash than the value of tradable stocks - the latter was approximately $270 billion at the end of last year.
The most surprising thing was Berkshire Hathaway's massive sale of Apple stocks. For a long time, Buffett has criticized the overvaluation of technology stocks. It turned out that his decision was completely correct. The first batch of tariffs imposed by Trump on China hit Apple and other technology stocks particularly hard, dragging down the U.S. stock market. By contrast, Berkshire Hathaway's investment portfolio includes many stocks of companies and industries less affected by tariffs, such as insurance, railways, and energy.
However, the growth of Berkshire Hathaway's assets also owes much to its huge cash holdings, most of which are short-term U.S. Treasury bonds. Last year, their yields occasionally exceeded 5%, and recently were around 4%. Compared to the growth of the stock market in recent years, these returns seem negligible. But once stock prices plummet, they become very attractive.
Original article: https://www.toutiao.com/article/7491289813862105641/
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