- So, during a recession,
the general consensus among your average investor out there
is sell, sell, sell.
And if there's one thing that I've learned
about the average retail investor out there,
they tend to do exactly the wrong thing
at any given point in time.
So, rather than looking at
what the average investor is doing,
which is going into a mad frenzy for cash,
I thought it would be interesting to, instead,
look at what billionaires are doing right now
as far as investing in the stock market.
Now, the main problem with your average investor right now
is that they are selling
and trying to cash-out of the stock market
either because they need cash
for their day-to-day lives,
which is more understandable,
which causes them to want to get out of the market
due to the uncertainty.
And if there's one thing you have to know
about the stock market,
it's that money is made by buying low and selling high.
You don't make money in the stock market by selling low,
which is what millions of people are doing right now,
evidenced by the stock market crash
that we have seen.
So, the question is,
what exactly are these billionaires
doing right now with their money?
Well, I called a couple of them up on the phone
and unfortunately they were busy.
But it's a good thing we have social media
as well as regulatory filings
to take a peek into their personal financial lives.
So we're gonna be looking at three billionaires
who have purchased five stocks in the last month
and talk about what they purchased these shares for
and what is going on with this underlying company
they have purchased.
Also, one last thing I wanna mention here, guys.
Webull is ending their two-free stock promotion
at the end of this month.
So, if you sign up for Webull right now,
and fund a brokerage account,
they're gonna give you two completely free stocks
just for signing up with that account.
That's gonna be the top link
down in the description below.
You guys have a couple of days left to do that
if you wanna get those two free stocks
before that promotion ends.
And full transparency, guys,
I am affiliated with Webull
so I may earn a small commission if you use that link.
That being said,
let's get into billionaire number-one
and talk about what stocks were purchased.
All right, so, first of all on our list,
we have billionaire Mark Cuban.
Now, Mark Cuban is not a hedge fund manager.
He is not a CEO of some publicly-traded company
that is required to disclose their holdings.
But, instead, Mark Cuban voluntarily shared
two stocks he purchased
in an interview with CNBC earlier this month.
So the first stock Mark Cuban mentioned
that he purchased is Twitter,
which is a stock he has been a long-term investor in.
And he said he had purchased shares on that Thursday,
which, according to the interview, would be March 12th.
Now, we have no idea what he paid for those shares.
But on March 12th, Twitter stock closed at 26.78 per share.
And this is a stock that was previously trading
around $40 per share back in February.
Now, according to Mark Cuban,
he said he does not know what is going to happen or when,
but he thinks, long-term,
Twitter investors should make out okay.
Now, the main reason we're seeing social media stocks
selling off is due to advertising budgets.
Investors are fearful that businesses and companies
will spend less money on advertising
which is the bread and butter
for the social media companies.
So, as a result, Twitter stock sold off
from around $40 per share,
right now trading at around 25 per share.
Now, there's one other stock
that Mark Cuban mentioned in that interview
that he had purchased that week,
and that is Live Nation.
If you're not familiar with this company,
this is one of the largest companies out there
in the entertainment industry.
A lot of event ticketing is run through Live Nation.
And so as a result, because of the closure
of events and limits to public gathering,
Live Nation has absolutely tanked.
Now, during the timeframe when Mark Cuban
could have purchased shares,
Live Nation was trading anywhere from $35 per share
to $50 per share.
So, we have no idea what Mark Cuban's average cost is
on this investment.
But we know he stepped up to the plate
and said he had purchased shares of Live Nation.
And, as far as the stock goes,
right now, they're about 50% off
where they were at back in February
because of the sell-off related to the virus
and the mass-closing of public events.
And overall, in this interview,
one thing that Mark Cuban highlighted
is that people should not be focused on the short-term.
He said they should step back and take a look
at the longer path of stocks.
Rather than just looking at
what has happened over the last couple of weeks.
And understand that people make money over the long-term
by investing in the stock market.
Also, if you guys are enjoying this video so far,
before we get into the second billionaire,
please go ahead and drop a Like
(cork popping out of bottle) on this video
for the YouTube algorithm,
it certainly helps me out.
It allows this video to get shared with more people.
That being said, our second billionaire on the list
is none of other than Warren Buffet.
And he made one large investment in the month of March.
And based on where the stock is at right now,
I don't know if Warren Buffet regrets this or not,
I'll wait for him to call me back later in the day,
he can let me know.
But Warren Buffet scooped up shares
of Delta Airlines in the month of March.
Now, it's important to understand
that Warren Buffet invests
through his publicly-traded holdings company
known as Berkshire Hathaway.
And at the end of 2019, they had over $125 billion in cash
ready to be deployed, ready to be invested.
Warren Buffet decided to load up
on shares of Delta Airlines,
meaning he now owns more than 10%
of the four major airlines,
being Delta, United, American, and Southwest.
Now, as far as his timing here,
well, the stock is down quite a bit
from where Warren Buffet purchased.
He purchased about 976,000 shares
according to a regulatory filing,
at a cost-basis of $46.40
per share.
Now, as of making this video,
Delta Airlines is down to 22 bucks a share.
So, in the course of just about three weeks,
Buffet is down about 50% on this investment.
And that just goes to show you guys
nobody knows what is going to happen
in the short-term with the stock market,
even the most well-known and well-respected
investor out there, Warren Buffet, has no clue.
So, I went ahead and calculated these numbers here.
And based on the decline,
well, Warren Buffet is down about $24 million
in that investment of Delta Airlines.
And I'll be honest with you guys,
right now, I'm down about $14,000 myself
in my trading account
and I do update videos every single month.
I'll pop the playlist up in the corner,
of my own dividend stock portfolio.
But I can't imagine buying into a market
and in just a couple of short weeks,
being down $24 million.
So, just keep that in perspective
when you're looking at your own trading account
and getting nervous about your investing.
So, obviously, Warren Buffet is a big fan of airlines
if he owns more than 10% of the major four.
And the big reason why he buys airlines
is because of the moat,
or competitive barriers to entry,
that the airlines have.
Airlines are a very high up-front
capital investment slash low-profit margin business
because you have to spend hundreds of millions of dollars
on aircrafts as well as leasing space at airports
for your planes.
So, it's not very likely that someone
is just gonna come along,
and try to compete for space with these major airlines.
Now, as a result, because of the low profit margins
and the high upfront investment,
these airlines take on a lot of debt.
And that is what is smothering them right now,
is servicing their existing debts.
So that is why the airline stocks have sold off massively
while travel cuts are being placed.
However, these airlines have proven to be
a classic falling knife for investors,
such as Warren Buffet and even myself included.
I started buying shares of airlines
a couple of weeks ago and I am down massively
on those shares.
So, Warren Buffet is down about 50%
on his new shares of Delta.
And that's the problem with buying into a bleeding market,
is you have no idea where the bottom is.
But I personally believe, five years from now,
we're gonna look back on this date
and say, "Man, were those airline stocks cheap."
But, again, guys, that is just my personal opinion.
And that is not financial advice of any kind.
All right, and the final billionaire on our list
is a well-known hedge fund manager known as Carl Icahn.
And he is the owner of the Icahn capital hedge fund.
Now, hedge funds are mandated by the SEC
to disclose any changes in their holdings
quarterly through Form 13F.
And that gave us a peek into what Carl Icahn
has been doing with the fund's money.
And in that filing, we found out that
from March 10th to March 12th,
Icahn purchased over 11.4 million shares of Hertz Global.
This is the car rental company
that you often will see at airports or other locations
where people can rent or lease vehicles
for personal or business use.
And obviously, due to the cutdown on traveling,
this stock went into a massive selloff.
Now, this is a company Icahn
has been buying into for awhile.
And now after the purchase of these shares,
he owns 38.9% of this company.
And as far as how much he paid,
the average price per share was $7.43.
For a purchase of just over 11 million shares.
Now, as far as the stock goes,
it went from trading around $20 per share,
down to a low of $3.18,
however it is now back up to the $6 per share range.
And even as we see here,
Icahn purchased his shares at around 7.50 per share.
So, again, nobody, even these billionaires
have any idea where that stock is going in the short-term.
And then the final stock here on the list, guys,
also purchased by Carl Icahn, is Newell Brands.
Between March 9th and March 11th,
Icahn purchased just over 2.5 million shares
at a price of $13.41
per share,
which means he now has a 10.7% ownership stake
in Newell Brands.
If you're not familiar with this company,
this is a manufacturer and marketer
of a number of popular brands
here in the United States and also serving global markets.
And to name a couple of those brands,
we have Rubbermaid, we have Coleman,
they also own the Ball jars and canning supplies,
they own Crockpot as well as Calphalon.
Now, a number of those brands do fall under
those consumer staples, things like Tupperware,
that we use every single day
and we continue to purchase.
But a few of their brands are discretionary as well.
For example, people aren't exactly running
to the store to load-up on high-end cookware right now
because they don't have the extra money.
So, as a result, this stock sold off pretty massively here,
down about 50% from where it was in February.
So, clearly Carl Icahn saw this as a buying opportunity
and he loaded up on shares of this stock.
So, anyways, guys, that is gonna wrap up this video.
These are five stocks that billionaires
are buying right now.
And if we look at the overall consensus here,
they are buying stocks in battered industries,
like the airlines or social media, live events,
as well as car rentals,
and then some major brands that have really sold off
because of the worries of consumer spending.
We're seeing these billionaires
investing in these hurt areas of the economy
because some of these stocks have sold off 50% or more.
Now, obviously, guys, these stocks could fall further.
And perfect evidence of that
is Warren Buffet's purchase of Delta Airlines
and then having it fall 50% from where he purchased
in just a few short weeks.
So, nobody has any idea where the stock market is going.
But if you're paying attention
to what the billionaires are doing,
the general consensus is buying stocks
in battered industries.
Now, do keep in mind as well,
these billionaires have a lot more risk tolerance
than the average retail investor.
And so if you are concerned about
buying into stocks right now,
it's probably not for you.
Because this is a very difficult time emotionally
to be holding stocks and seeing your portfolio fall.
But if you do have greater risk tolerance,
or a long-term vision,
I see this is as a great time to take long-term positions
in high-quality companies.
Like I said earlier in the video, guys,
if you wanna grab those two free stocks from Webull,
you've got just a couple of days left
before that promotion ends.
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