The strategist — who remained broadly bearish this year even as the S&P 500 gained nearly 20% — said in a note that December could bring “near term volatility in both rates and equities” before more constructive seasonal trends as well as the so-called “January effect” support stocks next month.

The benchmark S&P 500 advanced about 9% last month — one of its best November rallies in a century — on optimism around a peak in interest rates. That has left the index in overbought territory — a technical level that is generally considered to be precursor to a selloff.

Federal Reserve officials are increasingly confident that they don’t need to keep raising interest rates to defeat inflation. But they aren’t satisfied enough to declare an end to hikes—let alone to start a discussion about lowering rates.

This leaves them on track to hold rates steady at their December meeting while maintaining public guidance that their next rate change is more likely to be an increase than a cut.

In public, especially in front of the tens of thousands of attendees at Berkshire’s annual meetings, Munger deferred to Buffett, letting the company’s chairman hog the microphone and the limelight. Munger routinely cracked up the crowd by croaking, “I have nothing to add.”

In private, Buffett, who is 93, often deferred to Munger. In 1971, Munger talked him into buying See’s Candy Shops for a price equivalent to three times the chocolate stores’ net worth—a “fancy price,” Buffett later recalled, far higher than he was accustomed to paying for businesses.

See’s would go on to generate some $2 billion in cumulative earnings for Berkshire over the coming decades.

As Buffett wrote in 2015, “This purchase ended my pursuit of ‘cigar-butt’ investments—mediocre companies at ‘bargain’ prices—and set me in pursuit of splendid businesses selling at [reasonable] prices.” He added, “Charlie had been urging this course for some years, but I was a slow learner.”

Buffett nicknamed Munger the “abominable no-man” for his ferocity in rejecting potential investments, including some that Buffett might otherwise have made. But Munger, who was fascinated by engineering and technology, also pushed the tech-phobic Buffett into big bets on BYD, a Chinese battery and electric vehicle maker, and Iscar, an Israeli machine-tool manufacturer.

RIP to a legend. "I have nothing to add."

An estimated 10% of U.S. companies—zombies, if you will—cannot cover their interest expenses with operating cash flow and have been getting by thanks to more borrowing, a Federal Reserve study found. Nowadays, of course, added borrowing is tougher to do, with higher rates. The number of corporate bankruptcy filings has risen to 324 through September, per S&P Market Intelligence, a level not seen since 2010 and the aftermath of the financial crisis.

To understand what could go right in clean-energy stocks, it’s important to see what has gone wrong. The list is not short. It starts with high interest rates. Solar and wind projects, and new electric-vehicle plants, demand heavy upfront investments that should pay off over decades. With the cost of corporate debt doubling in the past two years, from 3.2% to 6.4% for Baa-rated bonds, it’s a bad time to be taking out new loans to finance capital projects. “It was an industry whose economics rested on low rates,” says Bobby Tudor, CEO of Houston-based Artemis Energy Partners, which invests in traditional and clean-energy companies. “When you have your cost of debt effectively doubling, it sort of wipes out your equity return.”

I'm not a debt alarmist, but the chart is alarming.

Fun, brief interview with Charlie Munger.

Most people probably shouldn’t do anything other than have index funds…. That is a perfectly rational thing to do for somebody who just doesn’t want to think much about it and has no reason to think he has any advantage as a stock picker. Why should he try and pick his own stocks? He doesn’t design his own electric motors and his egg beater.

The bull case starts with the fact that today’s entry point is the best in years. Yields across the Treasury market, at about 5%, are the highest since 2007. Investment-grade corporate bonds pay an average of 6.3%, a yield not seen since mid-2009. For someone in the 24% tax bracket, a 30-year municipal with a triple-A rating yields 6.1% when its tax advantage is included. (Although junk bonds average 9%, their “spread” over Treasuries is fairly narrow, indicating they aren’t cheap.)

The particulars of the offers for refinancing later vary. Generally, buyers get the option to refinance their mortgage later if rates fall, without having to pay much of the closing costs. The closing costs on a mortgage refinance for a single-family home averaged $2,375 in 2021, according to ClosingCorp.

This should be classified as predatory lending. Absolutely do not buy a house at a mortgage rate you cannot afford to pay.

The US economy grew at the fastest pace in nearly two years last quarter on a burst of consumer spending, which will be tested in coming months.

Gross domestic product accelerated to a 4.9% annualized rate, more than double the second-quarter pace, according to the government’s preliminary estimate Thursday. The economy’s main growth engine — personal spending — jumped 4%, also the most since 2021.

So... not a recession then.