On February 15, we warned about liquidating U.S. stocks and advised caution regarding risks. Currently, we need to patiently wait for Buffett's move; he is often the most precise hunter, just like in 2008!
From various economic indicators, it seems that a recession in the U.S. is highly likely unavoidable, and the trade war will not stop in the short term. It's like playing Texas Hold'em; the sunk costs are too high, and both sides have already suffered trillions in economic damage, so we can only keep raising the stakes until one side wins it all. Today, Goldman Sachs' latest report predicts a very pessimistic outlook for the dollar, with a GDP growth expectation of 0 in 2025, and inflation is expected to rise significantly, with little chance of interest rate cuts.
The team has created two charts for reference. One shows the situation during the 2008 financial crisis, where the bankruptcy of Lehman Brothers was just the beginning of a formal market decline, similar to our current situation. Buffett's two moves in 2008, especially saving GE, were remarkably precise in timing the bottom. We will soon receive Berkshire's Q1 financial report, which will reveal whether Buffett has made a move.
The other chart simulates predicted trends under various recession scenarios, overlapping with significant historical financial events. It is highly likely that we are still in the early stages of a decline; do not exhaust your resources too early. It is essential to maintain good cash flow and have enough ammunition. 🧐
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