By Nigam Arora
To gain an edge, this is what you need to know today.
Buffett Sells Stocks
Please click here for a chart of Warren Buffett’s company Berkshire Hathaway stock (BRK.B).
Note the following:
- The Morning Capsule is about the big picture, not an individual stock. The chart of BRK.B is being used to illustrate the point.
- The chart shows BRK.B stock has pulled back from highs earlier this year.
- The chart shows BRK.B is in zone 2 (support).
- RSI on the chart shows BRK.B stock is neither overbought nor oversold.
- Warren Buffett is the most successful investor of our time. His company Berkshire Hathaway reported earnings. Here are the details:
- Berkshire Hathaway did not buy back any of its own stock. A pattern that is continuing from May 2024.
- Berkshire Hathaway’s cash holdings have reached a new record $381B, up from $344B at the end of June.
- Berkshire Hathaway bought $6.4B worth of equities in Q3. However, the company also sold $12.4B worth of equities.
- There are indications, but no formal confirmation, that Berkshire sold more Apple stock (AAPL) in Q3.
- Berkshire Hathaway’s total after tax earnings came at $30.8B, up 17% year-over-year.
- Berkshire Hathaway has $305B of Treasuries on its balance sheet.
- Warren Buffett is stepping down as CEO at the end of 2025.
- Here is what prudent investors need to think about:
- Why was Buffett a net seller of stocks?
- As BRK.B stock has come down, why did Buffett not buy his own stock?
- Why is Buffett holding so much cash?
- For answers, investors do not have to look far. Buffett himself has provided the answers.
- Stocks are very expensive right now.
- BRK.B stock itself is not inexpensive enough to buy.
- Berkshire Hathaway is holding a lot of cash, so it can capture better opportunities as they will certainly arise in the future.
- The Arora Report has continuously shared that if you do not hold enough cash you cannot capture great opportunities when they arise.
- Most investors do not have billions like Buffett and do not have deal access like Buffett. For most investors, the best way to follow what Buffett is doing is to follow the Arora Protection Band. Keep in mind the Arora Protection Band is dynamic. As such, it helps investors generate wealth and protect wealth at the same time.
- Two data center stocks are jumping. Cipher Mining (CIFR) signed a deal with Amazon (AMZN), and IREN (IREN) signed a deal with Microsoft (MSFT).
- AMZN stock is jumping on a deal with OpenAI.
- Mergers and acquisitions continue to heat up.
- Kimberly-Clark (KMB) is buying Tylenol maker Kenvue (KVUE). KVUE was previously spun off from Johnson & Johnson (JNJ).
- Precious metal miner Coeur Mining (CDE) is buying New Gold (NGD).
- In the truce in the US China trade war, for the time being, China will not add to export controls on rare earth minerals and will end investigations into U.S. semiconductor companies.
- Expect blind money to flow into the stock market today and tomorrow. Blind money is the money that flows into the stock market on the first two days of the month without any analysis irrespective of market conditions.
- ISM Manufacturing Index will be released today at 10am ET.
- As an actionable item, the sum total of the foregoing is in the Arora Protection Band, which strikes the optimum balance between various crosscurrents. Please scroll down to see the Arora Protection Band. The Arora Protection Band is one of the large number of unique edges that are available to members of The Arora Report.
Magnificent Seven Money Flows
Most portfolios are now heavily concentrated in the Mag 7 stocks. For this reason, to get ahead and get an edge, investors need to dig below the surface of the Mag 7 stocks. It is equally important to rise above the noise of daily news on the Mag 7 stocks. The best way to get an edge, dig below the surface, and rise above the noise of the daily news is to pay attention to early money flows in the Mag 7 stocks on a daily basis. When there is significant news in the Mag 7 stocks that rises above the threshold of noise and impacts your entire portfolio, it is covered in the main section above.
In the early trade, money flows are positive in Amazon (AMZN), Nvidia (NVDA), Microsoft (MSFT), Alphabet (GOOG), and Meta (META).
In the early trade, money flows are negative in Apple (AAPL) and Tesla (TSLA).
In the early trade, money flows are positive in S&P 500 ETF (SPY) and Nasdaq 100 ETF (QQQ).
Momo Crowd And Smart Money In Stocks
The momo crowd is ***(To see the locked content, please take a 30 day free trial) stocks in the early trade. Smart money is *** in the early trade.
Note for new members: Smart money often sells into the strength generated by momo crowd buying and buys into the weakness generated by momo crowd selling. Over a long period of time, investors come out ahead by adopting smart money’s ways. The exception is in a raging bull market – for very short term trades, consider following the momo crowd and not smart money. Smart money is an important indicator but is only one of hundreds of indicators that go into determining the Arora Protection Band and signals. Please click here and here to understand how signals are generated.
Very Very Short-Term Indicator
The Arora Report’s proprietary very, very short-term early stock market indicator is ***. This indicator, with a great track record, is popular among long term investors to stay in tune with the market and among short term traders to independently undertake quick trades.
Gold
The momo crowd is *** gold in the early trade. Smart money is *** in the early trade.
For longer-term, please see gold and silver ratings.
Oil
Due to the prospect of an oil glut, OPEC+ is changing its stance. OPEC+ is pausing output hikes next year. This is pushing the price of oil higher.
The momo crowd is *** in oil in the early trade. Smart money is *** in the early trade.
For longer-term, please see oil ratings.
Bitcoin
Bitcoin (BTC.USD) is range bound.
Markets
Interest rates and bonds are range bound.
The dollar is stronger.
Trading futures is not recommended for most investors. The purpose of providing this information is to give an indication of the premarket activity that usually guides the activity when the market opens.
S&P 500 futures are trading at 6900 as of this writing. S&P 500 futures resistance levels are 7000 and 7200 : support levels are 6780, 6500, and 6256.
DJIA futures are down 14 points.
Gold futures are at $4029, silver futures are at $48.35, and oil futures are at $61.00.
Arora Protection Band And What To Do Now
It is important for investors to look ahead and not in the rearview mirror. The proprietary Arora Protection Band from The Arora Report is very popular. The Arora Protection Band puts all of the data, all of the indicators, all of the news, all of the crosscurrents, all of the models, and all of the analysis in an analytical framework that is easily actionable by investors.
Consider continuing to hold good, very long term, existing positions. Based on individual risk preference, consider holding *** in cash, Treasury bills, short term fixed income, or allocated to short-term tactical trades; and short to medium-term hedges of ***, and short term hedges of ***. This is a good way to protect yourself and participate in the upside at the same time.
You can determine your protection bands by adding cash to hedges. The high band of the protection is appropriate for those who are older or conservative. The low band of the protection is appropriate for those who are younger or aggressive. If you do not hedge, the total cash level should be more than stated above but significantly less than cash plus hedges.
A protection band of 0% would be very bullish and would indicate full investment with 0% in cash. A protection band of 100% would be very bearish and would indicate a need for aggressive protection with cash and hedges or aggressive short selling.
It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash. When adjusting hedge levels, consider adjusting partial stop quantities for stock positions (non ETF); consider using wider stops on remaining quantities and also allowing more room for high beta stocks. High beta stocks are the ones that move more than the market.
Traditional 60/40 Portfolio
Probability based risk reward adjusted for inflation does not favor long duration strategic bond allocation at this time.
Those who want to stick to traditional 60% allocation to stocks and 40% to bonds may consider focusing on only high quality bonds and bonds of five year duration or less. Those willing to bring sophistication to their investing may consider using bond ETFs as tactical positions and not strategic positions at this time.
To take a free 30-day trial to paid services to gain access to more opportunities, please click here.
This post was just published on ZYX Buy Change Alert.
Markets can generate substantial wealth for knowledgeable investors. NOW YOU TOO CAN ALSO SPECTACULARLY SUCCEED AT MEETING YOUR GOALS WITH THE HELP OF THE ARORA REPORT. You are receiving less than 1% of the content from our paid services. …TO RECEIVE REMAINING 99%, INCLUDING MANY ATTRACTIVE INVESTMENT OPPORTUNITIES AND SIGNALS IN REAL TIME, TAKE A FREE
TRIAL TO PAID SERVICES.
The Arora Report is one of the only major global investment newsletters that does not employ a single salesperson—because it does not need to. While competitors rely on high-pressure sales tactics, The Arora Report grows purely through results, with satisfied members recommending it to their family and friends.
Join the service that investors trust the most and recommend to family and friends.
Please click here to take advantage of a FREE 30 day trial.
Nigam Arora
Nigam Arora is known for his accurate stock market calls. Nigam is a distinguished master of the macro. He is a popular columnist with over 100 million page views, an engineer, and nuclear physicist by background. Nigam has founded two Inc. 500 fastest growing companies and has been involved in over 50 entrepreneurial ventures. He is the developer of Theory ZYX of Successful Change Management and is the author of the book on Theory ZYX, as well as the developer of the ZYX Change Method for Investing.
