Berkshire could become a real steal, if the general market rolled over and it took Berkshire down with it. The cash would provide a real margin of safety and could go kind of unnoticed, if the baby is thrown out with the bath water. That’s what I’m hoping for anyway.

I think Peter Lynch previously said something along the lines - you want great companies, that are fairly valued on your watchlist when the market is bubbly. Then it crashes they become incredible bargains. Berkshire fits that bill.

I watched the Jeremy Grantham interview from 4 days ago and he certainly gave a compelling argument that hell is coming. Pessimists have looked silly for a very long time now. But we all remember how the atmosphere changed in 2000 and in 2007. We have to look at the evidence. A key point Grantham makes is that AI saved the day in 2022. That was the equivalent of the railroad being invented in 1929. It’s would have prevented the 1929 crash. We got that boom in 2022. There will not be another AI level breakthrough over the next few years to save the market this time. Personally I think there are too many dominos lined up now.

Extract below.

“Looking at today’s environment, Grantham assesses the Iran War’s impact on oil prices, AI, meme stocks and the “Magnificent Seven”, drawing parallels with 1970s, 1999, 2007 and the post-Covid boom. He sets out the conditions he believes typically lead to a bubble bursting and also tackles longer-term headwinds – from demographics and de-globalisation to climate damage and geopolitical risk – arguing that these are fundamentally at odds with the near-record valuations investors are currently paying.”