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Ripple Effect

Cash Is Never Trash

Loading ...Addison Wiggin

August 5, 2025 • 1 minute, 54 second read


BerkshirebuffettCash

Cash Is Never Trash

When a crisis hits, investors will start to sell off their most leveraged positions first.

When that isn’t enough, they sell off the core holdings they thought they’d have forever.

And when that isn’t enough, anything that isn’t nailed down goes too.

The final stage of a market selloff is when assets that have been holding up relatively well such as gold also start to tank.

The key to coming out ahead? Lean against the markets. When stocks are soaring, raise cash. You’ll feel a lot better when the fear hits – since you’ll have less to lose.

That’s the approach that’s worked well for Berkshire Hathaway, which now holds over 30% of its investment portoflio in cash:

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Berkshire Hathaway now sits on its highest cash levels ever.

Markets haven’t liked the stock since Warren Buffett announced his retirement at the annual meeting. In the past 90 days, shares have dropped nearly 15% from all-time highs.

With a 30% cash position, however, Buffett and his successor Greg Abel, are in a position to buy up entire companies without having to issue debt.

Until they do, that cash, mostly invested in short-term Treasury bills, will earn over 4% per year, still higher than inflation.

And with market valuations well over the “Buffett indicator” for greed, measuring a stock market valued at 207.4% of GDP, a record high, the market is ripe for a strong pullback.

~ Addison

P.S. We see continued market volatility as part of President Trump’s Great Reset plan. And Trump may be willing to rattle markets again, following the rise of the TACO – Trump Always Chickens Out – mentality prevailing on Wall Street.

Stay tuned for more volatility – and make sure you have enough cash so you can sleep soundly through a big pullback – and have cash to put to work later on.

That doesn’t mean sell everything – a 30% cash position means Buffett is still 70% invested. But now’s now the time to be all-in. And you can even use put options to profit from a quick swing lower, as we’ll be doing in a trade for members of the Grey Swan Trading Fraternity later today.

As always, your reader feedback is welcome: feedback@greyswanfraternity.com (We read all emails. Thanks in advance for your contribution.)


The Ignorance of Experts

August 7, 2025 • Joel Bowman

Might it be that experts didn’t know all they claimed to know after all… that the climate is a complex phenomena largely beyond our comprehension, full of shifting dynamics, cascading interrelationships and natural feedback loops… and that maybe, just maybe, human beings are not the center of the universe we (ever so humbly) presumed we were?

A new report by the United States Department of Energy (DOE) certainly appears to suggest as much. Titled “A Critical Review of Impacts of Greenhouse Gas Emissions on the U.S. Climate,” the report was authored by a group of highly credentialed scientists, including, to the chagrin of those who seek to politicize everything up to and including the weather, the former Chief Scientific Officer of the Obama Energy Department.

The Ignorance of Experts
Confidence Games

August 7, 2025 • Addison Wiggin

So far this August, we’ve seen Powell under siege, inflation data in question, and a fresh wave of Trump tariffs — each enough to rattle investors even in isolation.

Yesterday, equities whipsawed after news broke of a 50% tariff on Indian imports, aimed at punishing Delhi’s ongoing purchases of Russian crude. By day’s end, the major indexes recovered slightly, but the tone of the market has clearly shifted.

Trump’s reciprocal tariff deadline — long advertised as a hard line — arrived at midnight last night. But not without drama.

In the final hours, Trump squeezed in one last round of changes: raising duties on India, surprising Japan with rates higher than expected, and teasing China with the possibility of similar action. Switzerland, hit hardest among U.S. allies, may cancel a major jet order in retaliation.

Confidence Games
From Two Centuries to 27 Months

August 7, 2025 • Addison Wiggin

In the past 27 months, more debt has been created in the U.S. than during the first 215 years of the Republic.

That kind of exponential move isn’t sustainable. Like tulip prices in 1637 or shares of Cisco in January 2000, it can’t last. The question isn’t whether this will collapse — it’s whether or not we get a massive market run first.

That seems to be in the cards — what Austrian Economist Ludwig von Mises called the “crack up boom.”

And it’ll be fueled by a combination of debt and the collapse of the purchasing power of the dollar. Not a company’s earnings or AI spend. That won’t be a typical bull market — it’ll be a terrifying one.

From Two Centuries to 27 Months
James Howard Kunstler: Suspicious Minds

August 6, 2025 • James Howard Kunstler

This enormous, drawn-out insurrection, composed of serial felony crimes, amounts to the greatest insult against the republic — the res publica, in Latin, the public thing — in the nation’s history. And now it is coming apart as an overwhelming majority of citizens, including now many Democrats, can’t avoid discovering what has happened in the country. Because lies are weak and the truth is sturdy and eventually truth prevails, even after an arduous struggle.

The old news media complex, the networks and the papers, are not reporting the recent disclosures by the Directors of the CIA, the FBI, and National Intel. What will it take to get their attention? Arrests and perp-walks of formerly important officials? And then, do they acknowledge and atone for their disgraceful participation in the events? Or pretend they couldn’t figure any of it out for years and years? Poor us, we didn’t know! Suddenly, it looks like many of these “legacy” news outfits are going out-of-business. They’re throwing their performers over the side like sinking ships casting off so much useless ballast.

James Howard Kunstler: Suspicious Minds