TOGETHER WITH  | Good day. According to Future Forum, can you guess what percentage of the global workforce feels burned out? a. 22%, b. 32%, c. 42%. Follow the wave 🌊 below for the answer. Today's finance & investing topics are: - Takeaways from Warren Buffett's annual shareholder letter
- How long might tech be left in the dark?
- Tips to prevent burnout
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INVESTING Takeaways from Buffett's Annual Shareholder Letter | | | | Warren Buffett and Berkshire Hathaway (BH) are old school in a myriad of ways, and the Oracle of Omaha's annual letter is just another tradition we've all come to appreciate in its 6-decade-long history. BH released its annual letter to shareholders a little over a week ago now, and per usual, the insights we can glean from Buffett's investing craftsmanship are both obvious and pertinent to the times we find ourselves in now. The main takeaways - Pick businesses, not stocks: One of Warren Buffett's claims to fame is his view on stock picking. Buffett and Berkshire pick businesses with a winning profile, not simply a stock based on its market outlook. In his own words, he says that "Our goal in both forms of ownership is to make meaningful investments in businesses with both long-lasting favorable economic characteristics and trustworthy managers."
- Don't be too nearsighted: Warren Buffett has never been a fan of short-term market moves, acknowledging the pettiness of quarterly earnings reports. Sure, cyclical earnings and projections are interesting and helpful when navigating current markets, but they don't tell us much about the long-term viability of a company. This is a persistent theme throughout Buffett's investing philosophy.
- Efficient markets theory: Economic and market-related theories are just that, theories. While markets are thought to be efficient, the reality is that it is constantly in flux. Buffett nods to this in his letter, saying "It's crucial to understand that stocks often trade at truly foolish prices, both high and low. "Efficient" markets exist only in textbooks." No matter what stock we're eyeing, the truth is that it may never be properly priced, and it's not our job to price stocks, but to pick good businesses as investments and to stick with them.
- Predictions are meaningless: Buffett calls market expectations a "disgusting practice" and a type of "bold accounting" that should be done away with. He believes that beating expectations are often nothing more than toying with the numbers to move investor sentiment. In truth, quarter-over-quarter economic and market conditions are highly variable, and letting earnings "beats" or "misses" sway the outlook on a business is the work of a trader, not an investor.
- Keep an investing safety net: One of Berkshire's calling cards is its dry powder and the fact that they're able to deploy cash at almost any time when an opportunity arises. While it might at times make sense to go all in, there's also something to be said for holding back.
Take this related lesson on this topic and earn Dibs 🟡 while you're at it: | | | |
MARKET OUTLOOK How Long Will Tech Be Left In The Dark? | | | | The stock market sounds like one uniform organism, but in reality, it's a complex system made up of countless different sectors. With so many unique parts, it's impossible for all of them to win at once, even in the best of conditions. Tech is a prime example of this. The technology sector has been on a blazing run for over a decade now and continues to consume larger swaths of the market. Over the last year though, that prosperous run has been interrupted, and some are speculating that this might be the new norm. Factors at hand - Recap: Tech has had a blessed few years. Between Dec 27th, 2019 and Dec 31st, 2021, the tech-focused Nasdaq Composite Index rose by 73.7%. During that same time, Apple jumped 145%, Meta 61%, Google 114%, Microsoft 112%, and countless other tech-related stocks climbed similarly.
- Interest rates: But that was then. Those euphoric conditions and low rates gave way to inflation that had to be curtailed, leading the Fed to embark on some unprecedented rate hikes, moving the Federal Funds Rate by 1600% in one year from 0% to 4.25%. Those rate hikes have stifled the market as it's now more expensive to invest in things like research & development.
- Consequences: The ramifications of climbing rates rang true in 2022 as those same tech stocks fell precipitously. And the market gave us a fake-out rally to start the year as investors hoped for lower inflation and slowing rate hikes, but recent data has indicated otherwise.
- Overall valuations: Although U.S. stock prices have been hammered causing overall valuations to drop, the truth is that the market is still a bit pricey, historically speaking. The S&P 500 currently trades at a forward P/E ratio of around 21.6, and although this is much lower than its peak at 35 in 2021, it's still north of its historical average.
- Growth environment: It's expensive to grow a business right now as the cost of debt has risen drastically, and tech companies that aren't yet profitable are just looking to tread water. Investors also realize that big tech that led the latest bull run may be running out of steam. These previously high-flying, innovative growth stocks are massive companies now, and prospects of explosive growth are no longer realistic.
- Going forward, markets will have to consider two things — how they process the last 14 months of trauma, and the fact that interest rates will likely remain lofty into 2024. No one can say for certain exactly how long these unfavorable conditions will continue for tech, but the fact of the matter is that companies will have to adapt, and investors will do the same.
Take this related lesson on this topic and earn Dibs 🟡 while you're at it: | | | |
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CAREER Preventing Modern Burnout | | | | With remote work already having been on the rise for years, the pandemic only accelerated the trend. Nowadays, some businesses have returned to in-office environments while others have maintained their commitment to a partial or fully distributed model. The disruption to the status quo has been great for many reasons, of course, but it also does have its drawbacks, one of which is a new kind of burnout. Working remotely can make it hard to differentiate between your life and your work, and while that boundary was only ever arbitrary anyway, it can be nice to be able to feel like you can step away from it all when you need to. And juggling all of this as a parent only adds fuel to the burnout fire, no matter where you work. Whether you're working from home, partially from home, or even fully on location, here are some tips — some obvious, some not, but all worth restating — to help avoid burnout. - Create a schedule. For some people, making a schedule itself feels like a chore that makes things even worse, but putting in the time upfront to do so can be a blissful feeling of relief at the end of the day. Whether you work on-site or at home, knowing what to expect and sticking to it can create calm and closure in your day, reducing stress and uncertainty that can result from having work bleed over into your personal time.
- Thoroughly investigate what your employer offers in terms of benefits. Benefits are a huge selling point for prospective employees now, and companies are now bringing more to the table to show they're invested in the overall wellness of their employees. For example, companies are offering more chronic health support, professional mental health coaching, financial wellness, and legal services too, and it's worth doing some digging to know the details of what your company has to offer across the board.
- Outsource. Not everyone is a manager who can outsource tasks, but almost everyone has something that they can hand off to someone else. Whether it be a menial task or a small portion of a big project, offloading can help take the top off of a mountain of work that would otherwise have been overwhelming.
- Negotiate and set boundaries. Setting sound boundaries and expectations for those in your life will help to create a level of respect for your needs that everyone deserves. Whether it's managers, subordinates, co-workers, or even family, letting everyone know what's up and when you need some time away is paramount, because your health precedes the importance of any task. On top of that, using any leverage or authority you have to negotiate your schedule and PTO can be well worth the meeting with your superiors.
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🌊 BY THE WAY | - 🔥 Answer: 42%. Burnout is still on the rise globally, with 42% of the workforce reporting it—a slight uptick (2% rise) from the previous quarter and an all-time high since May 2021, when Future Forum first started measuring employee burnout (Future Forum)
- 💼 Latest U.S. jobs report for February (CNBC)
- 🏠 Billionaire Warren Buffett still lives in a 1920s house he paid $31K for (Benzinga)
- 🔎 ICYMI. CDs are now offering 6% yields (Finny)
- 🎓 We're heading into a world where a flat-screen TV that covers your entire wall costs $100 and a 4-year degree costs $1M (MSN)
- ✨ Finny lesson of the day. Speaking of Warren B., he's not only into making great investments but clearly also:
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| Finny is a financial wellness platform. The Gist is Finny's twice-a-week (Tues & Thurs) newsletter covering personal finance, market trends and investing insights. Finny does not offer investment and stock advice. Please support our corporate sponsor — Sesame Care — as they make rewards on our platform possible! If your company is interested in sponsoring The Gist, please reach out to us. And if you have any feedback about this edition or anything else, please email us. | | | | | | | |
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