Why Warren Buffett Is Raising Cash: Market 'Euphoria' In Final Stage | Bill Smead

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Bill Smead, Chairman of Smead Capital Management, discusses the late stages of market euphoria.
*This video was recorded on May 9, 2024
Bill's previous interview with me: • Brace For 'Ultimate Re...
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0:00 - Intro
0:50 - Berkshire Hathaway and cash
4:33 - Markets entering new era
19:20 - Passive investing
22:20 - Valuations and investing
30:55 - Energy sector
36:45 - Inflation and monetary policy
40:46 - Financials sector
#investing #stocks #economy

[@TheDavidLinReport]

Brain.fm is the best focus music I’ve ever tried - get 30 days free here: brain.fm/davidlin Are we in the late stages of market euphoria? Comment below on what you think will happen next, and don't forget to subscribe! FOLLOW SMEAD CAPITAL: Website: smeadcap.com/ Twitter (@SmeadCap): twitter.com/SmeadCap

[@user-bv4px3rt8k]

You could listen a bit more bro

[@Lukky_Luke]

Buffets holding of cash: 2017: 116 Billion 2018: 112 billion 2019: 128 billion 2020: 138 billion 2021: 147 billion 2022: 128,5 billion 2023: 168 billion 2024: 200 billion and now this is a big story, why??

[@benitabussell5053]

I'm mostly in cash and waiting for this market to re-level on the reality of our situation. Or are there any ways I can avoid a crunch and maximize my savings of $350k?

[@RickWatson-xu6gw]

from my study, 90% of the time in an election year, the stock market stays positive for quite a long time. 2024 is no exemption, but it is better to be guided, ideally by a well experienced and licensed advisor

[@BenTodd-fl8nv]

Agreed. I use KZbin for research but rely on an investment adviser for major decisions due to the market's instability. By consistently restructuring and diversifying my portfolio and expenses, I've made over $3 million in gains over nearly a decade.

[@Theresaa12]

That's impressive ! I could really use the expertise of your mentor . Who is yours?

[@BenTodd-fl8nv]

*Sharon Lynne Hart* is the licensed advisor I use. Just search the name. You’d find necessary details to work with to set up an appointment.

[@HenryKatty]

Great video, David! The first $100,000 invested was amazing. But when you hit $300,000 it’s like smashing the glass ceiling! I cried!

[@soniajames-tn4mp]

I completely agree with you! My first 100k took a long time and wasn't that special to be honest with you. Once I hit 300K that is the game changer in my opinion. At this point my money is basically making me a pretty good yearly salary. When I go to sleep at night I know my money is making decent money with the help of my FA!

[@rapp-in1mz]

Nice. People often underestimate financial advisors' importance. Over 50 years of data reveal that those who work with advisors typically earn more than those who go it alone. I've been fortunate to work with one for 13 years, resulting in a $1 million portfolio, largely from early investments in AI and other growth stocks.

[@HenryKatty]

I've been considering but haven't been proactive. Can you recommend your advisor? Could really use some assistance...

[@soniajames-tn4mp]

'Angela Lynn Schilling" is the licensed advisor I use. Just research the name. You’d find necessary details to work with to set up an appointment!

[@HenryKatty]

I looked up her name online and found her page. I emailed and made an appointment to talk with her. Thanks for the tip!

[@userjoe4321]

A generation of new investors is going to learn the hard way.

[@kkiissssiikk]

😂/😢

[@tlee7653]

David, I’m to the point where a miss very few of your excellent interviews. And they’re getting better. This one is one of the best.

[@sharktoothdiver]

I have to agree as I was thinking the same thing. I was laughing as well and hitting pause and going back to listen again so many times during the interview. Lots of good interviews, but this one was the best. This guy has some history and will probably be right on his predictions. I love these seasoned guys who have lived through several bear markets.

[@jetflyresq]

Bill Smead is always one of the best guests to interview. Fascinating.

[@huwhitecavebeast1972]

Except he is quite wrong about the sea lions. He should just stick to economics.

[@gianfrancobergagna4024]

Also today there are very good company undervalued li INTEL for example!

[@petergodfrey4783]

Starbucks bigger issue is their pricing. They raised prices again this past week. Paid almost $4 for a grande hot tea. I’ll still go there periodically but not like i’ve done in the past. If you bought daily, that’s $1,400 a year give or take. That’s more than I’m willing to spend. I can buy a good size box of tea for $8. Just crazy. Convenience is only worth so much.

[@miltonm9030]

That’s why I get my Senior coffee at Mcdonalds! $1. I used to buy a tall americano. After they increased price to $3, I said hell no 👎

[@ivancho5854]

Yea, but it seems to me that no one under 30 knows anymore how to brew a pot of coffee! ☕ 😐

[@kealgu]

Bill is a superstar. His fund SMVLX has a 14 year Cagr of 14.90%. Inflation adjusted cagr is 11.97%!

[@matsutendai]

So average

[@kealgu]

@@matsutendai Destroys the S&P 500 in that time frame.

[@matsutendai]

@@kealgu it’s barely higher so “destroy “ is objectively false plus my mutual fund got higher returns lol

[@kealgu]

@matsutendai 1 million invested over the 14 years SMVLX made over 8.4 million, The S&P 500 7.3 million. Let me do the math for you, that is over 1 million dollars. I am sure that's chump change for you. Lol!

[@matsutendai]

@@kealgu cool so we agree it didn’t destroy the S&Ps returns, both examples you gave are very close to just buying the index.

[@sharktoothdiver]

David, Great guest, great interview. Bring Bill back again soon. It was not only educational, but entertaining as well. Thumbs up.

[@davebrewer7170]

David sending secret market signal encoded in his hair. Go long energy. Count on oil use going up 😀. Very slick form of messaging

[@cuchulainkailen]

The "Lin Hair Poof Inflation Index". I swear by it.

[@Arteshir]

He wears a top hair toupee

[@Resmith18SR]

Hair Gel: Buy, Buy, Buy 😂😂😂

[@prolific1518]

Oil doesn't rise in a recession buddy

[@huwhitecavebeast1972]

I felt like he was channeling his inner Beethoven. I can totally see him playing piano like a madman with that hair.

[@vincentmurphy9252]

Dave - Covid was not a bear market - it was a V craze

[@25Soupy]

I was going to mention coca-cola. in 1998 it was $43 at its high and didn't hit $43 again until 2016. That's 18 years to get to all time highs again.

[@kauaifishing1365]

Microsoft took 14 years between 2000-2014

[@boggy7665]

Did they pay dividends? That's worth something.

[@ivancho5854]

​@@boggy7665 In a flat market dividends are fantastically important.

[@yellaboymike561]

So averaging down sometimes does work? 🤠

[@ivancho5854]

Wow, my comment was deleted. What the... 😐

[@maxiewex1496]

David, I liked Mr. Smead’s historical perspective and his interesting analogies. You did a good job keeping him on task. Well done!

[@Resmith18SR]

Charlie Munger says short the NASDAQ and the S&P 500 from the Other Side. 😂

[@rapatel1642]

What do u mean by short? Do u mean cash out or bet it's going to fall or both?

[@littleredhen3354]

​@@rapatel1642Short means bet against.

[@hughjanis6439]

That was the best interview I've seen in a while.

[@pongod5751]

Was really fun...guy knows his history too

[@josephpolite3007]

Keep up the good work David.👏 I’m watching from Farmington Hills, Mi😀

[@_Thoughtful_Aquarius_]

Another great interview on the David Lin Report!

[@Brendita8]

Another outstanding interview, David. Love your content! ❤

[@mikekron6968]

22:09 David Bill was CORRECT and you just moved on instead of heading his warning.... Hurd mentality is deadly sir. Thank you Bill

[@_m_K_.]

I think Bill is a little too long winded and historical based for David, but what he was saying is quite simple... when you overpay, who is going to rescue you when you want to take profits? So then switch to contrarian views... they hype green and want to print fake money to subsidize it, so switch to black gold (oil) and natural resources which will always be necessary to keep the economy strong.

[@ivancho5854]

Yup, and with the Boomers retiring, most of them will flood into bonds. The next decade will have far less capital to grease the wheels of finance. Demographics has ruled the markets since WW1. Demographics is the force behind the economy. All the best.

[@Tazmanian_Ninja]

The moment he said that, I felt certain it was what you timestamped in your comment (which I read, but didn't click on, as I wanted to listen to the whole interview). Indeed a powerful nugget of obviousness he threw there! 👌

[@titchglover2601]

Great interview thank you both, like the high energy from Bill.

[@michaeljacobs4546]

@ 28:00 Buffet and T. Rowe price, from the opposite ends of the investing spectrum, come to the same conclusion that there is regime change afoot in the 1968. This is priceless historical pedagogy.

[@wakethebarbarian4577]

Bill Smead is a genius! He even mentions my hometown of Astoria, Oregon! He recommended NVR many months ago and it has skyrocketed (while I shorted it 😥). His understanding of market history is very rare.

[@emuahemuah]

I hear a lot of common sense coming from Bill Smead, clear and simple, thank you for sharing sir!

[@samychafa885]

Always connected to this Channel like an addicted

[@ellianaredick6817]

David: You should get Avi Gilburt on your show. He would be a FANTASTIC interview. Very interesting views on the short medium and long term outlooks for the markets.

[@Arteshir]

Avi gets lost in his own minute tiny stuff EWA useless details...he is more of a OCD...who sees waves within waves within waves wuthin...an accountant more than anything else which offers any actionable anything fir anyone

[@terryli340]

A very interesting perspective and analysis.

[@Vivienedouglass]

Thanks Dave for always bringing experts on your show. I have a quick question and point to add. I foresee a recession lasting 2-3 years, and if inflation continues to surge, the Federal Reserve will likely raise interest rates soon. Inflation is causing various issues worldwide, such as food shortages, scarcities of diesel and heating fuel, and significant spikes in housing prices, leading to a potential financial market crash. This global downturn could have long-lasting repercussions. Given the current inflation rate of approximately 9%, my main worry is how to optimize my savings and retirement fund, which has remained stagnant at around $300,000, yielding almost no gains for quite some time.

[@kurtKking]

Numerous opportunities exist to achieve substantial profits at present, but executing high-volume and nearly flawless trades requires the expertise of real-time professionals with an ISDA Agreement. This agreement allows investors to participate in sophisticated trades, exclusive to seasoned individuals, and unavailable to amateurs. Attempting to be a high-stakes trader without an ISDA is akin to trying to win the Indy 500 riding a llama.

[@scottdavis5749]

This guy is a good one to listen to

[@user-bt9cm7ze4c]

REMEMBER, these crashes usually take a year or two to finally bottom out with many many dead cat bounces along the way. PICK your stocks and your price points way ahead of time and start slowly averaging in once they hit that point. Spread your buys out over an entire year.

[@abrahamisabella8513]

Great interview 👍!

[@wokwithjosh1473]

Bill is best. Sharp and to the point t and easy to understand

[@lucanidae100]

Keep up the great work !

[@Alpharizzchad]

When Berkshire Hathaway is dumping Apple and holding a major share of BYD China EV. You know what is coming. I want to know how much money JP Morgan and Cuti bank has in China

[@ivancho5854]

Fools. I wouldn't touch a Chinese stock. Remember what happened to Russian stocks? They're all worth zero now. 😐

[@rexmundi273]

Berkshire largest holdings are US Treasuries (3 month, 6 month)

[@ivancho5854]

My comment about BYD was deleted. Can't be critical of Ch..a here on KZbin obviously. 😐

[@ivancho5854]

@@rexmundi273 They'd get a lot more bang for the buck in a "correction" ⤵️ if they held 30 year Treasuries.

[@rexmundi273]

@@ivancho5854 Well they hold those short term US Treasuries which can be converted into cash quickly. The thing with long term US Treasuries is, that you're never sure what long term interest rates will do. Before/In a recession they come down indeed.

[@glenngrowe7105]

Many good interviews here and this is among the best. Smead's knowledge of market history is awesome. His application of common sense to investing leads to good results.

[@myutube8x]

Bill was a really helpful guest David. He made understandable this complex economy, as well as how to handle it. Really great interview. Very grateful.

[@PrestonSprattCPA]

I really enjoyed this program, thank you 🙏

[@twilightbin]

Great interview!

[@johnjones-bv5df]

At last someone who has a different view along with a plan that makes sense. Great interview.

[@tomdonovan4842]

Good review

[@petefraser3013]

Great information. Thank you

[@bssb936]

Great video thanks 😊😊

[@toppersunglasses9288]

Awesome interview David

[@wordysmith]

Really interesting guest. A lot of experience and knowledge, especially enjoying his talk on t rowe price and buffet in 1969

[@catliath5384]

Great mini history, thanks.

[@maxiewex1496]

Thanks!

[@kaleoride]

Loved this interview with Saul Goodman

[@lauragraves2948]

I missed the part where he asked him about housing, what were his thoughts? I can’t find it again, I was listening and multitasking.

[@PAWANGUPTA-ey4mg]

Exciting times ahead with Revux! Just joined the presale - can't wait to see where this project goes

[@ryanmarosy2940]

Hey Mario! You think oil going higher does it look like a cup and handle on WTI?

[@wakethebarbarian4577]

David Lin does it again! A great guest!

[@PrnavCh]

Diving into Revux's whitepaper - the innovation and technology behind this project are mind-blowing!

[@milozadikwishecouldski3071]

Best in a long time

[@marcoseggi7274]

37:34 it's like talking about cancer, rates are the chemio which kills economy and inflation both, like in the cancer case less and better nutrients are the solution to starve cancer and let the body recover as in economy, a good economy is,an ethic and human centered rythm one.

[@faustinodibauda251]

Fascinating.😊

[@gimusk5667]

Nice!

[@clbrown555]

Great ,smart guest! Refreshing

[@BrisLS1]

This is a best kept secret show; should be mandatory viewing, Sunday morning and night on all 3 networks.

[@akyoutuber15]

Revux's presale is gaining momentum - early supporters, let's seize this opportunity together!

[@nasersk8511]

Presale excitement building up! Revux's project is making waves for all the right reasons.

[@cjb8993]

lol, Bill asks; "you ever see the movie Dave?". David, no. I forgot how young David is until just then.

[@MH-53E]

Let's see if anyone is paying attention. What was really big in the late 60's & early 70's that is repeating itself now, 50 years later? Three things, and those same things are here again, just as popular and accepted today. To me, that further verifies what is likely to come next...

[@HungLikeAPeanut]

If energy was correctly priced in the US we wouldn’t be driving to the grocery for the bread and milk

[@emphyrio]

🚴

[@prolific1518]

What does this even mean? US is producing more energy than it ever has. The additional capacity is the only reason energy hasn't skyrocketed worldwide.

[@syu9281]

Brilliant. Sobering interview.

[@BootsieTheGreek]

Do these guys disclose if they have short positions ? Returns will CLEARLY be higher for everyone. Retail has wayyyyy more access to the markets this stuff never existed before basically anyone can put money into the markets now my 13 yr step son is constantly asking about it and he has no idea what money or markets or anything is lol this younger generation will be full blown gambling in the markets lol

[@prolific1518]

Great way to take a lot of money from noobs

[@jonathantaylor6926]

That works both ways. People can dump positions faster than ever now. Revenues still matter btw.

[@user-yq7rr9lh9c]

@@prolific1518 Noobs like you that don't understand cycles?

[@willnitschke]

Markets are great for extracting the maximum number of dollars from the clueless.

[@prolific1518]

@@user-yq7rr9lh9c the irony of this comment

[@Notaslave1961]

Fantastic hair David!!

[@Arteshir]

Rumor has it that He has many toupees

[@Resmith18SR]

We should all have toupees like David.😂

[@louis20122]

Here we go again. Crash of the lifetime over and over again.

[@tiger_would4419]

Buy silver and and water filtration before it’s too late

[@MM-qv5lf]

Just another psychic, some psychics say crash is coming, others say major bull market.

[@jackinsonpablanes760]

@@tiger_would4419 lol, we all use water filtration daily already, who drinks tap water? 😂🤣

[@calebfromcanada]

Quantitative easing's a hell of a drug!

[@michaeljacobs4546]

Yeh but what if he is right???

[@toppersunglasses9288]

Bill great job

[@NorbertNagy00]

Thank you David and Bill for this insightful discussion of what can be expected and what shaped our financial sector until now

[@banana-lakefishing6077]

Terrible advertisement….you ABSOLUTELY do not use dumb brain music

[@rohitsandhu7330]

Kudos to the team for Revux's comprehensive ecosystem. Easy 50x soon.

[@toppersunglasses9288]

What about first majestic gold?

[@computerman9580]

Can’t compare the previous bear markets with the new era of FED QE and not letting recessions to happen..

[@bdek68]

2 plus 2 still equals 4. They can’t continue QE in perpetuity and inflate their balance sheet. It causes hyperinflation, low growth, and huge divide in haves and have nots. They are in a box and we will have major pain either way. Deflation or a currency collapse

[@user-yq7rr9lh9c]

@@bdek68 We don't need QE for next few years, we have 9 trillion sitting on the sidelines buddy and that money is earning 4.5% interest.

[@jjwatt5126]

@@bdek68are you kidding? That’s exactly what the fed is going to do

[@bdek68]

@@jjwatt5126what will the result be if they go to ZIRP again? Hyperinflation, unsustainable debt, and a currency crisis. Rates are normal where they are. We dot need 0% or rates under 4-4.5

[@jjwatt5126]

@@bdek68 I half agree with you, but rates need to be much higher to be considered restrictive. A 5% funds rate is still accommodative policy.

[@SuperSavageSpirit]

Im just waiting on Dr Hanke and schiff 😭

[@cuchulainkailen]

I'm waiting for Mr. Hanky The Christmas Poo.

[@rajastatusvideo]

Presale alert: Revux is turning heads with its cool approach to decentralized finance. Jump in before it's too late!

[@Hoiza_Kiwi]

I get Bill’s logic intuitively, but any data to back it up?

[@thomasmurphy82]

This guy is awesome.

[@Divocklindsay]

Glory to God Almighty❤,So much happiness, $47k weekly returns has been life changing. AWESOME GOD I now have a house and can now afford anything for my family even with my Retirement..

[@RitaSarsh2452]

Hello how do you make such weekly?? I'm a born Christian and sometimes I feel so down of myself because of low finance but I still believe in God.

[@Divocklindsay]

All thanks to Franca Wellis, I really appreciate her efforts and transparency

[@Divocklindsay]

I remember giving her my first savings $20000 and she opened a brokerage account for me it turned out to be the best thing that ever happened to me.

[@MargaretLambert3255]

This is a definition of God's unending provisions for his people. God remains faithful to his words. I receive this for my household🙏🙏

[@Jamesharrison77597]

YES!!! That's exactly her name (Franca Wellis ) so many people have recommended highly about her and am just starting with her from Brisbane Australia.

[@fooling6373]

He likes JPM but not Google or FB?

[@Casey-rr7th]

Bill Smead = sage wisdom

[@_tushar_01]

Revux's AI-driven investment approach is what the financial world needs right now.

[@galacticfedoflight]

I agree

[@jimmy441]

Very interesting guy!

[@clarkfee4432]

Channeling Boone Pickins! This guy speaks my language!

[@stevefox6864]

Sure a lot of chat about history here !!

[@ntfsntfs5282]

more guests like Bill!

[@whdndrn]

No one is questioning the hype the bubble. Question is how big or how long will it go. He is a broken record player.

[@user-yq7rr9lh9c]

Usually, 3 bubbles before it's all done, that means will last for about 20 years or more with ups and downs along the way.

[@user-yq7rr9lh9c]

We haven't even started the gen-ai bubble technically speaking because no AI IPOs yet sprouting out from everywhere so we at experimental stage.

[@ericnewman6523]

I hope we get a crazy bear market I’m ready for it this time, cash on hand!!

[@user-bt9cm7ze4c]

You always have to consider your own age and the sequence of returns. It is devastating to buy stocks at their peak right before a crash that takes years to recover if you buy in right when you retire. If you bought something like MSFT back in 2000 at age 65 you'd have almost been 80 yrs old! before you got back to EVEN!

[@montyloads]

Buffet is positioning the company to have a war chest for either...... a market correction of some significant magnitude or just simply having a war chest available that can be allocated by those that step into his shoes after he is no longer at the top.. doing so in this environment is not detrimental to the business as it is getting paid a reasonable fair amount in interest woth the cash just sitting on the sidelines

[@fooslinger]

my cash position ratio the is same as Buffet. "the time to buy is when there's blood in the streets."

[@jeffmilligan7030]

Better call Bill

[@luckyskivvy6077]

You can make a 💩 ton of money on the downside. Plus a lot faster. I can't wait.

[@user-ch9pz1uq9v]

Sqqq

[@Maximummax23]

So if big oil is paying to dispose of excess natural gas, why aren’t we building giant natural gas utilities to power SkyNet?

[@TheMeme0208]

Can consumers just boycott spending. I mean buy absolutely nothing. We should not pay mortgages or rent. Literally refuse to pay until they stop the greedflation.

[@Mochi_Forever123]

When you hear someone says “it will come in 10-15 years”. Means BS cuz no one will remember what you said in 10 days. They basically saying nothing. It has been coming for decades. Always coming but never arriving. So the people who get benefits from it can keep going.

[@gjones5153]

can't go wrong with utilities forth last 24years utilities total return has done better than the S&P 500

[@disndat1000]

As long a you measure stocks in fiat currency, you have not idea what the valuation is, since your yardstick gets shorter as you measure.

[@hbomb65]

end days are coming! be fearful, go cash, stay inside!

[@bobthebuildaa]

Old people = scared Young people = optimistic

[@sharktoothdiver]

Old people = Experienced Young people = Clueless Old people = Been through it and learned Young people = Recency bias, everything is fine. Old people = Know better and know when to play it safe. Young people = Fuck it, buy Tesla and Nvidia after it's gone up a zillion percent. Old People = Conservative and make money Young people = Buy the latest thing at any price. Old people = Patient Young people = Gotta have it now. Old people = Doing just fine in all markets. Young people = Stressed Old people = Buy low and sell high. Young people = Buy high and sell low. Old people = Buy undervalued stocks Young people = Buy bitcoin Old people = Own everything Young people = Rent everything Old people = Use cash Young people = Use credit cards Old people = Trump Young people = Biden Old people =Rich Young people = Poor Old people = Me Young people = You

[@bdek68]

That’s the point! They know a little more than you 😂

[@huwhitecavebeast1972]

Sometimes.

[@user-yq7rr9lh9c]

@@bdek68 100 years of history has shown pessimist know sht, just get rekt and miss out on best opportunities in life.

[@Jaydoggie1]

@@user-yq7rr9lh9c why would you want to buy anything now at all time high's?

[@davisutton1]

AI may well not be a legitimate development. It has already established itself as "domain narrowing." It tends to feed on its own 'information' as an input. Sure, it can replace mid-range to lower end 'copywriters' and increase productivity in that way but it may also be self-destroying at the higher level. I have already noticed how it is very effective at picking out dominant narratives so does it fail at the level of the fallacy ad populum.