Update from Lao Li: Stock Market Insights and Strategies
Hello, everyone. I'm Lao Li. It's been a week since I last made a video. Long time no see, and I really miss you all. I've been resting at home for a few days, and my heart is almost healed. I still have a little cough, but let's continue to battle in the stock market. I'll be with you through the ups and downs.
Recent Stock Market Activities and Account Update
During this long weekend, I was studying stocks at home and noticed that many Wall Street institutions and big players have recently sold a significant number of stocks. Many of you have been asking me whether you should sell your stocks now, and I have some time to discuss this today.
Today is Memorial Day in the United States, so there was no fluctuation in our stock market, and my account remained unchanged. Currently, my account's total assets are over $229,000. Last week, it reached over $230,000, but due to the overall recalibration of U.S. stocks last week, the account balance dropped.
In the last week, the overall return of the three major U.S. stock indexes decreased. If I remember correctly, the return of the three major indexes was around 2.5%.
Analyzing Wall Street Institutions' Stock Sales through 13F Documents
The recently released 13F document shows that many Wall Street institutions and big companies sold a large number of stocks in the first quarter of this year. Many of you are also wondering how to track these Wall Street bosses and institutions' sales records, including what stocks they added or reduced.
Only through the 13F document can we know exactly what stocks they bought and sold. However, it's important to note that the 13F report is released 45 days after the end of each quarter. For example, for the first quarter of 2025, the report will be announced after March 31st. So, we retail investors will always know later as we don't have inside news.
Let's take a look at some of the Wall Street institutions and big players and their stock sales in the first quarter of this year:
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Buffett's Berkshire Hathaway:
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Completely withdrew from the Wall Street Bank stock market, selling the remaining $1 billion of shares.
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Emptied all shares of NU (New Holdings) worth $400 million.
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Sold 7% of U.S. bank shares, equivalent to $2 billion.
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Also sold 4% of Capital One shares.
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The overall investment value of Berkshire Hathaway dropped by $80 billion, falling to $25.9 billion. The market share of the stock market decreased, and the cash reserves reached the highest level in history.
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Bailey Jaffer:
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Discounted Meili and Spotify.
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Significantly reduced the stocks of Tesla and Inuita, indicating the profit and loss of large-scale technology stocks. This makes me a bit nervous as Tesla and Inuita are my main stocks.
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The value of the US stock investment group dropped by $1.5 billion, reflecting a wide reduction in the risk of higher assets.
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Ray Dalio's Bridge Fund:
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Mainly reduced the stocks of Nvidia, Google, Meta, and App, showing a defensive adjustment.
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Significantly increased gold stocks and reduced stocks related to artificial intelligence and large-scale technology.
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Soros Fund Management Company:
- Sold small-scale stocks while buying large-scale stocks, showing a trend towards stability.
Overall, from the 13F documents of the first quarter of 2025, leading Wall Street institutions and investors, especially Berkshire Hathaway, Billy Jifford, and Qiaoshui Fund, have adopted a defensive strategy. They sold a large number of financial stocks and reduced the scope of high-speed technology stocks. These measures reflect market volatility, policy uncertainty, and the pursuit of safer and more distributed assets.
Should Retail Investors Sell Stocks?
Now, the question is whether we should also sell our stocks like these Wall Street bigwigs. Everyone knows that the U.S. stock has reached a high position again. If we sell our stocks now, the price we can get should be similar to what these Wall Street bigwigs got when they sold their stocks.
However, before making a decision, I want to correct a common mistake that many retail investors make during operation. Some of you may directly clear stocks with very small positions, but for large investment groups, they usually don't clear all stocks at once, especially those with large positions.
Also, if your capital is relatively large, say tens of thousands or even hundreds of thousands of dollars, when selling stocks, you must not go for a complete clean - out. There is a big risk of missing out on potential gains. We don't know exactly how the stock market will move in the future. Although the stock market may have rebounded recently, it may also fluctuate during the recovery process.
The Importance of Warehouse Management
When buying and selling stocks, we should use the concept of warehouse management. When buying stocks, it's a step-by-step process of splitting purchases and slowly building a position. When selling stocks, it's also a process of controlling the position. By thinking about problems from the perspective of warehouse management, the risk of your entire investment group will be greatly reduced.
Buffett or Charlie Munger once said that on the investment journey, it's not about how much you do right but about how many mistakes you make. Making fewer mistakes increases your investment tolerance, stabilizes your mentality, and makes you more determined on the investment path.
An important rule in the U.S. stock market is to stay in the market. As long as you can stay and play in the market, you have a chance to be the winner in the end. Buffett's Berkshire Hathaway has been selling stocks in the past year, but they do it in a split - sale manner, slowly reducing the position.
Outlook on the U.S. Stock Market
Last Monday, I posted a video saying that U.S. stocks were about to rebound, and last week, they indeed rebounded by about 2.5%. In the last video, I expected the return rate to be around 5% to 8% for the standard index.
I don't think the U.S. stock market will crash this time. It's just a normal and healthy adjustment. The yellow line at 5500 points is a key level, and I don't think the market will break below this support.
Recommendations for Different Investor Situations
Based on your own warehouse situation, here are some recommendations:
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If you are fully invested, especially if some of you are buying stocks with leverage, you should immediately reduce your position and sell stocks to save more cash.
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If you have some cash but a large stock position (for example, only 20% cash and over 80% stock), you can also sell some stocks to control the position.
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If you have around 30% or more cash in your entire investment group like me, then the proportion of cash is relatively sufficient. If you didn't sell stocks at the previous high point, it's okay not to sell now. You can continue to hold as the stock market may rebound in the future.
Some of you may worry about missing out on potential high - low profit. But in reality, it's difficult to sell at the highest point and buy at the lowest point. Also, frequent high - low trading may cause tax-related issues.
I believe I have explained clearly for those of you who asked whether to sell stocks now. Analyze your own situation to decide whether to sell some stocks at this stage.
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Thank you for watching. See you next time.
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