🍋 Buffett's Mystery Stock Pick Unveiled

Why regulators want to ban derivatives from being used to wager on political elections or sports games, plus Warren Buffett's mystery stock pick.

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"If you’re not confused, you don’t understand things very well." — Charlie Munger

Good Morning! Stocks closed at records yesterday, thanks to the CPI report showing inflation easing last month. TikTok has a new billionaire bidder. Netflix will start airing some NFL games. Meme stocks fell more than 20% as the rally fizzled. Uber dropped some new products including Uber Shuttle, which will have between 14 and 55 seats. that President Biden and former President Trump have agreed to participate in two presidential debates, with the first one scheduled for June 27 on CNN.

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SQUEEZ OF THE DAY

Buffett's Mystery Stock Pick Unveiled

Warren Buffett’s Berkshire Hathaway unveiled a $6.7 billion stake in insurer Chubb, ending months of speculation about its undisclosed investment in a financial firm.

Berkshire has been building its stake since 2023 but was allowed by the SEC to keep it confidential. The conglomerate, which owns insurance companies like Geico, has been expanding its investments in the insurance sector while reducing holdings in other industries.

Chubb, one of the largest property-casualty insurers in the US, operates in 54 countries. Chubb’s CEO, Evan Greenberg, expanded the company through a 2016 merger, creating a large insurer covering various risks, including cyber attacks and marine shipping.

At Berkshire’s annual meeting, Buffett announced reducing its Apple stake to $135.4 billion for tax reasons. Berkshire’s cash reserves reached $189 billion at the end of March, with expectations to hit $200 billion by the end of the current quarter.

Takeaway: Berkshire has been keeping this purchase secret for two quarters straight, which makes total sense when you think about how many people are copying the trades he makes. Shares of Chubb jumped nearly 9% in extended trading following the news of Berkshire’s stake, proving once again that when Buffett sneezes, the market catches a cold.

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HEADLINES

Top Reads

  • Inflation pressures ease as consumer prices rise at slowest pace in 3 months (YF)

  • TikTok has a new billionaire bidder (AP)

  • Netflix strikes three-season NFL deal, will air two games this year (YF)

  • GameStop, AMC tumble more than 20% as meme stock rally fizzles (CNBC)

  • Biden and Trump agree to debates (CNN)

  • Financiers fret over 'leverage on leverage' in private credit (YF)

  • How bad bets on meme stocks led to a $1 billion wipeout (CNN)

  • Uber announces shuttle rides, features for caregivers and Costco perks (CNBC)

  • Goldman Sachs hires from rivals to expand in mid-market deals (YF)

  • Netflix ad-supported tier has 40 million monthly users (CNBC)

CAPITAL PULSE

Markets Rundown

Stocks closed at records yesterday, thanks to the CPI report showing inflation easing last month.

Movers & Shakers

  • (+) Petco ($WOOF) +28% after the pet supplies company appointed a new chairman.

  • (+) Dell Technologies ($DELL) +11% after Morgan Stanley raised its price target on the technology company.

  • (–) GameStop ($GME) -19% after the meme stock rally fizzled.

Private Dealmaking

  • SmarterDx, a cycle management company, raised $50 million

  • Chapter, a Medicare navigation platform, raised $50 million

  • Polymarket, a prediction market, raised $45 million

  • Li Industries, a battery recycling startup, raised $36 million

  • SingeInterface, a provider of SaaS, raised $30 million

  • Data Zoo, a global identity verification startup, raised $22 million

For more PE, VC & M&A deals, subscribe to our Buysiders newsletter.

BOOK OF THE DAY

Becoming Bulletproof

Becoming Bulletproof means transforming yourself into a stronger, more confident, and more powerful person. Evy Poumpouras—former Secret Service agent to three presidents and one of only five women to receive the Medal of Valor—demonstrates how we can overcome our everyday fears, have difficult conversations, know who to trust and who might not have our best interests at heart, influence situations, and prepare for the unexpected.

When you have become bulletproof, you are your best, most courageous, and most powerful version of you. Poumpouras shows us that ultimately true strength is found in the mind, not the body.

Courage involves facing our fears, but it is also about resilience, grit, and having a built-in BS detector and knowing how to use it. In Becoming Bulletproof, Poumpouras demonstrates how to heighten our natural instincts to employ all these qualities and move from fear to fearlessness.

“Your mental armor is an internal firewall against the harmful words or actions of others that might otherwise undermine or diminish you.”

DAILY VISUAL

Households Extremely Bullish on Home Prices

Home Price expectations: Mean Increase in Home Value During Next 5 Years

Source: Apollo

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DAILY ACUMEN

Identity-Based Habits

Struggling to stick to good habits? The secret might lie in shifting your focus from what you want to achieve to who you want to become. This concept, known as identity-based habits, emphasizes changing your self-perception to create lasting habits.

Instead of merely aiming to lose weight, think of yourself as a healthy person who naturally eats well and exercises. This approach contrasts with outcome-based habits, which focus on achieving specific goals without altering your core identity.

Outcome-based habits often lead to temporary changes because they don’t address the underlying beliefs and identity that drive behavior. By adopting identity-based habits, you start by defining the kind of person you want to be and then align your actions to match that identity.

This shift in mindset can make your habits stick, transforming your goals into lasting parts of your daily life. So, ask yourself: Who do you want to become? And let that vision guide your actions, one small step at a time.

ENLIGHTENMENT

Short Squeez Picks

  • 10 phrases to succeed at work

  • 8 pieces of relationship advice I’d give to my younger self

  • How to avoid a career plateau at midlife

  • How the Goldilocks rule promotes peak performance

  • When it’s better to work out in the morning or evening

MEME-A-PALOOZA

Memes of the Day

 

 

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