Miguel Ferreir (WizDayTrader)
Aug 5, 20232 min
Updated: Aug 7, 2023
Trade Ideas: Here's why we took profits
I'm sure Warren Buffett is an excellent person. This trade is purely technical and not personal. And we are getting aggressive, a client of mine opened a short of $10 Million against $BRK.B on Friday.
Please be sure to read the disclaimer on our site before moving forward, comment below and follow us on social media (FaceBook, Instagram, and twitter)!
In a most recent Bloomberg article by Katherine Chiglinsky it is stated the 'Warren Buffett’s Berkshire Hathaway Inc. has amassed $158 billion of domestic infrastructure assets, a feat the billionaire investor said underscored the conglomerate’s stature as an industrial powerhouse which he only expects to grow.'
“Many people perceive Berkshire as a large and somewhat strange collection of financial assets,” Buffett said. “In truth, Berkshire owns and operates more U.S.-based infrastructure assets -- classified on our balance sheet as property, plant and equipment -- than are owned and operated by any other American corporation.”
“We think about Berkshire as kind of a tollbooth on the American economy,” Jim Shanahan, an analyst at Edward Jones, said in a phone interview. “There’s broad exposure here across the U.S. economy.”
If your a trader, investor or pretty much anybody in America you know who The Oracle of Omaha is and the impact that he has had on America. He is widely considered one of the best investors of all time with a stunning track record of returns. So my trade idea is not betting against on any of that, I am in awe of Buffet and his ability to consistently generate excellent return for his clients. I am approaching this trade idea purely on a technical basis as we are seeing resistance occur in Berkshire Hathaway Class A & B shares ($BRK.A/$BRK.B) after a return of 35.33% since the October lows.
Below, is the daily chart of Berkshire Hathaway Class B shares, $BRK.B and have an amazing run and now we are coming into resistance!
You can see (the white line in the RSI - bottom of chart) is diverging negatively while we are making new highs. This looks similar to what happened before Apple collapsed recently, and Apple is one of Berkshire's biggest holdings!
So what's the trade?
It's a very simple trade, below $362 in $BRK.B and we can be short all day long! It's that simple and we don't have to complicate things.
Have great weekend and don't forget to...
Trade Confidently!
Essex's Trading Quote of the Day (QotD)
"Five to one means I'm risking one dollar to make five. What five to one does is allow you have to a hit ratio of 20%. I can actually be a complete imbecile. I can be wrong 80% of the time, and I am still not going to lose."
~ Paul Tudor Jones