"It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price."- Warren Buffett
This quote highlights Buffett’s belief that long-term success comes from owning high-quality businesses, even if they’re not a bargain. A great business can compound value for decades, whereas a mediocre one often disappoints despite a low entry price.
Focus on buying excellence, not just cheapness.
Market Wrap
OPEC, Tariffs, and a Titan’s Exit Hit Stocks
Warren Buffett Announces Retirement as CEO of Berkshire Hathaway:
Warren Buffett announced he will step down as CEO of Berkshire Hathaway at the end of 2025, naming Vice Chairman Greg Abel as his successor. The news surprised investors and some board members, leading to a 5.5% drop in Berkshire’s Class B shares amid concerns about the company's future leadership. Buffett will remain as Chairman, but his retirement marks the end of an iconic 60-year era that helped define modern value investing.
President Trump Proposes 100% Tariff on Foreign Films:
President Trump announced a 100% tariff on foreign-produced movies, aiming to bolster domestic film production. This move raised concerns about potential trade retaliations and increased costs for U.S. media companies, leading to declines in entertainment stocks such as Netflix and Paramount Global.
Treasury Secretary Defends Tariff Policies Amid Investor Concerns:
At the Milken Institute Global Conference, Treasury Secretary Scott Bessent defended the administration's tariff strategies, asserting they would usher in a "Golden Age" of economic prosperity. Despite his optimism, business leaders expressed apprehension about the tariffs' potential to disrupt investment decisions and harm the U.S.'s global economic standing.
ISM Services Index Rises:
The Institute for Supply Management reported that its services index increased to 51.6 in April from 50.8 in March, indicating expansion in the services sector. The rise was driven by gains in new orders, employment, and prices.
OPEC+ Increases Oil Production:
OPEC+ announced an agreement to accelerate oil production increases, raising concerns about a potential oversupply in the global market. This decision led to a decline in oil prices, with U.S. crude oil falling to a four-year low, impacting energy stocks and contributing to the broader market downturn.
Berkshire Hathaway Inc. shares fell 5% after the company announced that Warren Buffett would step down as CEO by the end of the year, with Vice Chairman Greg Abel set to succeed him. Investors expressed concerns about the leadership transition and its potential impact on the conglomerate's future performance.
Netflix Inc. shares dropped in response to the 100% tariff on foreign-made films announced by President Trump. The policy change sparked fears of higher content acquisition costs and potential limitations on international offerings.
Palantir Technologies Inc. shares plunged 9% after-market, despite reporting better-than-expected Q1 revenue and raising its full-year forecast. The decline was attributed to investor concerns over the company's valuation and future growth prospects.
Walt Disney Co. shares declined approximately 2% after President Trump announced a 100% tariff on foreign-produced movies. The new tariff policy raised concerns about increased costs and potential disruptions in Disney's international film operations.
Ford Motor Co. shares fell after the automaker reported a two-thirds drop in first-quarter profit and withdrew its full-year guidance. The company cited a projected $1.5 billion hit to operating earnings from new U.S. tariffs and ongoing losses in its electric vehicle division, leading to increased investor concerns.
Skechers USA Inc. shares surged 24.3% following news of a $9 billion buyout deal by private equity firm 3G Capital. The announcement boosted investor confidence in the footwear company's valuation and strategic direction.
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