Decoding Market Moves: What Jamie Dimon and Warren Buffett Really Mean for Your Investments

What are Jamie Dimon and Warren Buffett doing? In this episode, Wes breaks down the recent headlines about Jamie Dimon selling millions in Chase stock and Warren Buffett sitting on a massive $334 billion cash pile. 

What Jamie Dimon and Warren Buffett are doing with their money might not be the market crash warning many headlines suggest - Wes explains the likely reasons behind these moves and why financial media loves to stoke fear. 

If you've been watching the news and asking yourself, "what are Jamie Dimon and Warren Buffett doing?" and what it means for your own investment strategy, Wes will share his perspective as a financial advisor on avoiding headline panic, the dangers of holding too much cash, and developing a balanced long-term approach to your finances.

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Transcript

>> Wes Cuprill: 0:00

Hello, I'm certified financial planner Wes Cuprill. And this is Wealthwise Women, the show. That'S rewriting the narrative that personal finance in investing are just for men and just for insiders. Because whether or not the rest of my industry realizes it, the future of wealth in the United States is female. And I aim to foster that future. One episode, at a time. So join me every week as I attempt to add humor and entertainment to the otherwise snooze feest that is personal finance, addressing various topics along the way from the lens of how they affect women in particular. And if you like what you hear, be sure to subscribe to our channel and our newsletter, the link to which you can find on the screen or. In the details below. That being said, let's get to this week's episode. Hello there, and welcome to another episode. This week, I'm going to kind of go off the cuff a little bit and talk in sort of a stream of consciousness. A lot of this is prompted by a conversation that I had over, over the weekend with somebody, and I wanted to turn it into an episode because I think the topic that we discussed is very, very relevant to the show. So, for the last few years, I have coached youth hockey at a rink here in Cincinnati. I usually don't talk about what I do for a living in that setting. That's not because I don't like to. It's just one of those outside of work, I try and talk about other things. But a few of the, parents do know that I'm a financial advisor. And one of them was talking to me this weekend about how Jamie Dimon, he is the CEO of Chase, recently sold hundreds of millions of dollars of company stock. And then on top of that, he brought up how Warren Buffett's Berkshire Hathaway, that's the holding company that Warren uses to invest in other companies, recently disclosed that it has its largest stockpile of cash ever. It's about$334 billion. And throughout the conversation, I'm just trying to get to where this dad is going with this. And it was obvious he was trying to get my sense of how do I view such a thing? It can be easy to think, well, if the CEO of a big bank is selling off his own bank stock, he must think that the bank is not going to be doing well, and pretty soon the stock will crash. And if Berkshire is amassing this huge amount of cash, it must mean that they're waiting for some type of market crash in the future. They're just Playing the waiting game until they can snatch stuff up for cheap. Okay, that's certainly one way to think. But I think too often in our world we like to jump to certain conclusions, especially pessimistic ones. And I think, and again, this is always me trying to talk about a lot of the psychology with investing. And one of the recent phenomena out there is the front page effect. Too often now, every news site is guilty of this. Using front page headlines to grab attention. And they are very rarely positive. It's always bad news. And in this day and age when our own attention spans are much, much less than they used to be, we're often really only drawn in by the headline and then we don't really read any deeper. I'll admit I'm guilty of this myself, so I don't want me to think that I'm preaching anybody that, hey, you need to start reading a little bit deeper. It's a much easier way to consume information. But when it comes to things like investing, we do need to dive a little bit deeper. It can be very, very easy for any pundit in talking had to go out there and go, oh well, this person did this. So it must mean the market's crashing. Everybody likes to say that the market's crashing. Is it? I don't know, it might in the future. I don't have the crystal ball to predict when that's going to happen. But just because certain actions have been taken by those who are viewed as, as insiders doesn't mean that the market is in a bad situation, that the economy is headed towards disaster. So in the case of Diamond, I did a little bit of digging and all of this stock sale is part of a plan that has been in the works for a while. He, his family and all the various trusts that are under his family own all of this Chase stock. And they filed a document recently with the IRs that said, hey, we are in, we are insiders, we have insider information to this large corporation, but we want to sell. And I believe it was as a result of tax planning and just overall diversification. They were planning to sell a million shares of Chase stock that they own. I believe diamond, and his family owned seven and a half million shares, give or take. So this is a good chunk of their company's shares. But this was all part of a planned out strategy that they disclosed a while ago. And they ah, didn't dump the stock all at once. They're selling it in chunks. And one of the recent chunks was just sold. Could that mean that, you know, he's nefariously got some inside information and knows that two years from now things are going to drop. I don't think that's the case. Again, I don't know. I like to have a little bit more faith and optimism in the system. I purely think this might just be his way of diversifying his own holdings. I mean, heck, every financial professional believes in diversification, so that's a sound strategy. And then at the end of the day, he is in his late 60s. He could just be preparing for retirement. That is entirely possible. He's been at the helm of the bank since 2004. So this could just be part of an overall strategy. I don't think it needs to be read into as this situation that the market's crashing now. Berkshire Hathaway situation. Yes. It's unusual for Warren Buffett to hold Ono so much cash, especially since he is famous for saying that compounding interest is the eighth wonder of the world. He does not want to sit on a lot of money and loses purchasing power to inflation, let alone just lose out on any interest. One thing that he recently talked about is the fact that Berkshire isn't always knee deep in opportunities. I believe that's a direct quote. It's very rare for that to be the case. Oftentimes they're always hunting and it might just be a sparse environment for them to find companies to invest into. And I simply think that's the case. Now. He has a large cash stockpile and Berkshire Hathaway is just waiting for the next round of investments. I could be wrong. Like I said, don't have a crystal ball. And yes, there is no doubt some crony capitalism that goes on. Warren Buffett has certainly reaped his fair share, I would say, of crony capitalism. But I think at the end of the day, for him to amass a stockpile of $334 million, I think that's more just the result of being unable to find a deal that he likes that's not necessarily rooted into a possibility that the market is in a bad spot. All right, so again, what does this all mean, though, at the end of the day? What does this mean for the investor? Again, I think it just means that there is no crystal ball. We can sit there and try and read into every little action by every person within the market and the government that it could mean disaster. Markets are always going to go up and down. That's why we have a strategy in place where early on, yeah, if a mark goes up, goes down. It doesn't matter. You're trying to play the long game. I mean, Warren Buffett has always been somebody who plays the long term game. In the case of Jamie Dimon, he could very easily just be trying to diversify his own holdings. He's doing exactly what we have talked about forever. It is good to have a good diversified strategy and for those who are in or nearing retirement, this is when we then start to diversify even further. We stay in equities so that you still reap long term growth, but you are protected from potential downsides. Hey there. Before we get to the rest of the episode, I wanted to take a quick second to tell you about the Wealth Wise Women newsletter. I'll be the first to admit there is no shortage of financial publications out there and there's definitely no shortage of free information and financial advice that you can find on the Internet. But in my opinion, a lot of it misses the mark. It's either incredibly dry or it's full of industry jargon, or it just simply isn't geared towards women. That's why I decided to start the Wealthwise Women Newsletter to provide a source of information that is geared towards women. It's easy to understand without all of the industry jargon and above all, it's what I like to call info ting. And best of all, it's free. To subscribe, simply go to M. Mcwealthwisewomen.substack.com and enter your email. That's it. Again, that is M. Mcwealthwisewomin.substack.com. All right, let's get back to the episode. One thing that I do want to talk about and tie into this episode, because it's relevant to something that has come up in into other conversations, is that we often say the cash is king. But too often I think that gets warped. Cash is certainly king in business because I think it helps with operating. But when it comes to investing, cash is not always a good thing. Especially in an environment such as now, when inflation can be high, your purchasing power gets very quickly eroded. Women typically are more conservative investors than men. It's not a bad thing. And in fact a lot of statistics show that over time women are better long term investors than men. But what we need to make sure is that you are better balanced so that way you aren't losing out on too much long term growth. Cash and cash equivalents oftentimes don't even keep up with the rate of inflation. So you could be going broke, as we say, slowly. So Instead, if you have large cash holdings, now may be the time to consider trying to invest that a little bit more aggressively. Yeah, the market is at all time highs right now, but again, we don't know where it's going to go. Now might be the time to sit down and take a look at what are some good strategies if you don't want to invest it in the stock market because you think maybe it's too high, Perhaps there are other things that we can take a look at for even just the short term. It all goes back to saying we need to have a good, cohesive long term strategy that takes a look at your entire financial picture and is unique to you in your situation. And yes, you need a long term strategy that factors in the news of the world, but we need to make sure that we aren't responding to every single little bit of information that gets thrown around, especially the stock sales of a single CEO in terms of selling the stock of his own bank. It could just be this is part of his own retirement plan. Again, that's just my interpretation. So I don't know. Regardless, whatever information that you do see in headlines, if it's something that kind of rings a bell with you, dig deeper, take a look at what it truly means. I see think that there's plenty of ways to really dive deep and really understand what it is that's happening rather than being persuaded by just the headlines of the day. So I encourage you, reach out to me if you'd like to discuss this episode, discuss the psychology of investing at all. One thing we really specialize in is having that conversation, really saying, okay, what are your concerns? Let's dive deeper. I'm, not a licensed therapist by any means, but a lot of the conversations we have are helping clients really unwind and unravel their own thought processes when it comes to investing and retirement. It's helpful to have that sounding board where you might have your own questions or concerns. Just having somebody who is an expert in all those things be able to really dig deep and help assuage some of those fears is powerful. I always say, you know, you shouldn't come to me if you're just looking for market returns, but if you want somebody who can really help you talk through the emotions of investing, that's where we really find pride in the work that we do. So I encourage you, go to visit with mcc.com and book a free consultation or feel free to shoot me an email at ah, weapril moneyinclarity.com. that being said, I hope you enjoyed this week's episode, and I'll see you next week.