Finimize - 🍕 Buffett's piece of the pie

What’s going on here?

Warren Buffett’s Berkshire Hathaway threw itself a pizza party last quarter, buying a stake in Domino’s.

What does this mean?

According to regulatory paperwork filed Thursday, Berkshire Hathaway gobbled up more than 1.2 million shares of the pizza chain – at a price of about $550 million. That’s roughly a lunch portion by Buffett standards – which suggests the move may have been made by one of Berkshire’s top investing chiefs, rather than the Oracle himself. Nonetheless, Domino's shares initially heated up on the news. Meanwhile, Ulta Beauty was feeling chilled: Berkshire sold off nearly all of the 700,000 shares it bought in the previous quarter. And that’s a tad unusual for Buffett, who’s known for his buy-and-hold-forever strategy. So it’ll be interesting to see how long the firm hangs onto its Domino’s slice.

Why should I care?

Zooming in: Small plates.

Berkshire’s been siphoning off its heftiest holdings – namely, Apple and Bank of America – and that’s made the firm less vulnerable to negative swings in those share prices. But the selloffs have also left it sitting on a record $325 billion in cash. And sure, it’s earning some decent risk-free interest payments on that dough. But what Buffett and Berkshire are really looking for is a good stock opportunity – and the size of these latest buys suggests they’re just not finding it.

The bigger picture: Star power.

It’s useful to keep tabs on what the market’s icons are buying and selling. You might discover a new investing idea – or find they’ve spotted one of yours. For example, Pershing Square’s Bill Ackman just doubled down on his stake in Nike in the last quarter, according to a disclosure this week. And that’s an idea Theodora wrote about last month.

What’s going on here?

Retail sales in China shot up 4.8% in October, hinting that the country’s consumers might finally be bouncing back.

What does this mean?

Over the past two months, the Chinese government’s been busy: cutting interest rates, dishing out stock buyback incentives, and offering subsidies for big-ticket items like cars and appliances. And that appears to be paying off. The uptick in retail sales suggests the country's economy could be shifting toward a more balanced footing, with factories churning out goods and consumers actually spending again. Now, it’s probably too soon to pop open any bottles of bubbly: new home prices just dropped for a 16th straight month, and some big tariff threats are still looming. But with manufacturing output continuing to grow and shoppers back on their feet again, that might be enough to keep China’s 5% growth target for 2024 in view. And, hey if all else fails, the government still has more stimulus room on this runway.

Why should I care?

For markets: The big bets.

Chinese tech giants Alibaba, JD.com, and Tencent all perked higher in September, buoyed by stimulus news. But they’ve given back much of those gains as folks have grown more skeptical of the measures and more worried about the prospect of crippling new tariffs. Still, Michael “The Big Short” Burry doesn’t appear to be backing away – his latest filing reveals he doubled down on Chinese stocks in the third quarter. But there’s a caveat: he also bet against the stocks, buying some put options, just in case things turn sour.

The bigger picture: Going left, when everyone’s heading right.

US stocks might look like the best bet now, but everyone’s already on that boat – which is why they’re trading at record valuations compared to other regions. Bank of America, meanwhile, is predicting aggressive rate cuts and government stimulus in Europe and China, aimed at countering the impact of US tariffs. And those moves could be just what’s needed to flip the script and let European and Chinese stocks steal the spotlight again.