👉 Week in Review: Buffett's $189B Cash Pile

Happy Sunday, everyone.

You think your $20K emergency fund is big? Think again.

Below is a graph illustrating Warren Buffett’s Berkshire Hathaway’s (BRK) $189B cash pile. I want you to read that again — $189 billion dollars in cash. Billion with a B.

When asked why he doesn’t invest / deploy the money, Warren said this:

Portfolio Updates:

I don’t have any updates to share regarding the portfolio. However, I plan to deploy $20K during the month of May toward the portfolio — and I’m excited to begin purchasing new stock ideas.

Most of those ideas have been shared between this post and this post over the last few weeks. As always, I never purchase new stock ideas before telling you all first.

Week in Review — Too Long, Didn’t Read:

Amazon delivers $99B in operating cash flow, Apple authorizes a $110B share buyback program, Wall Street doesn’t know what to do with Coinbase stock, Starbucks has a PR disaster, Boeing is getting accused of killing people, Carvana rips higher, a breakdown of the jobs report, and the Fed’s not happy at all about inflation.

Key Earnings Announcements:

Amazon delivers $99B in operating cash flow, Apple authorizes a $110B share buyback program, and Wall Street doesn’t know what to do with Coinbase stock.

• Amazon (AMZN)

Key Metrics

Revenue: $143.3 billion, an increase of +13% YoY

Operating Income: $13.0 billion, an increase of +215% YoY

Profits: $10.4 billion, an increase of +228% YoY

Earnings Release Callout

“It was a good start to the year across the business, and you can see that in both our customer experience improvements and financial results. The combination of companies renewing their infrastructure modernization efforts and the appeal of AWS’s AI capabilities is reaccelerating AWS’s growth rate (now at a $100 billion annual revenue run rate).”

My Takeaway

• Apple (AAPL)

Key Metrics

Revenue: $94.8 billion, an increase of +4.5% YoY

Operating Income: $28.3 billion, an increase of +1% YoY

Profits: $24.2 billion, an increase of +2% YoY

Earnings Release Callout

“Given our confidence in Apple’s future and the value we see in our stock, our Board has authorized an additional $110 billion for share repurchases. We are also raising our quarterly dividend for the twelfth year in a row.”

My Takeaway

• Coinbase (COIN)

Key Metrics

Revenue: $1.6 billion, an increase of +115% YoY

Adj. EBITDA: $1.0 billion, an increase of +253% YoY

Profits: $1.2 billion, compared to -$79.0 million last year

Earnings Release Callout

“Additionally, we made meaningful progress against our 2024 priorities of driving revenue, utility, and regulatory clarity. Our market share in US spot and derivatives increased, we reached all-time highs on Coinbase Prime, and USDC market capitalization increased. Coinbase One adoption remains strong, and our international business was a larger contributor to our growth.”

My Takeaway

Investor Events / Global Affairs:

Starbucks has a PR disaster, Boeing is getting accused of killing people, and Carvana rips higher.

• Starbucks (SBUX) Takes a Beating

Last week, Starbucks reported weaker-than-expected earnings and revenue — with a surprising decline in same-store sales leading to an immediate -12% stock price plunge. The company slashed its forecast for fiscal 2024, anticipating continued underperformance in its cafes for several quarters. 

• Across all regions — Starbucks saw shrinking same-store sales and falling traffic, including a -4% decline in same-store sales and a -6% drop in cafe traffic. 

• The U.S. market specifically experienced a -3% decrease in same-store sales and a -7% decline in traffic, while international segments also faced challenges — particularly in China where same-store sales plunged by -11%. 

• Management expects flat to low single-digit EPS growth for fiscal 2024, down from previous forecasts of +15-20% growth.

• Another Boeing (BA) Whistleblower Dies…

Boeing is facing significant challenges with whistleblowers — as a second one has died under mysterious circumstances…

These events are part of a larger crisis within Boeing, which also reported a -$355 million revenue loss in Q1. 

Whistleblowers like Joshua Dean, who recently passed away, and John Barnett, who died a few weeks ago, raised concerns about safety flaws and alleged corporate negligence at Boeing. The company's troubles include Congressional investigations and a scathing House report in 2020 pointing to repeated failures in safety.

• Carvana (CVNA) Comes Back to Life

Carvana's shares surged +30% in after-hours trading following their record-breaking Q1 results — including +$49 million of net income compared to a -$286 million loss in the previous year.

• The company's earnings per share of 23 cents exceeded expectations.

• Revenue reached $3.06 billion — surpassing the expected $2.67 billion. 

• Carvana's gross profit per unit (GPU) stood at $6,432, and its adjusted EBITDA profit margin for the quarter reached 7.7%. 

• CEO Ernie Garcia III attributed this success to operational efficiency gains, especially in vehicle reconditioning and cost management.

• The company's restructuring efforts over the past two years — focusing on profitability rather than growth — have also contributed to its recovery. Shares had climbed +67% YTD before the Q1 results were even announced.

Major Economic Events:

A breakdown of the jobs report and the Fed meeting.

• Jobs Report & Unemployment Rate

In April, U.S. job growth reached +175,000 — falling short of the +240,000 estimated by Dow Jones. The unemployment rate rose to 3.9% — surpassing expectations of holding steady at 3.8%.

• Average hourly earnings rose +0.2% MoM and +3.9% YoY, lower than expected.

• Health care saw the most significant job creation, adding +56,000 jobs — followed by social assistance (+31,000), transportation & warehousing (+22,000), and retail (+20,000).

• Fed Chair Jerome Powell's characterization of the job market as "strong" contrasts with market sentiments of easing labor market conditions and softer wage growth — prompting discussions about potential rate cuts to address economic concerns.

• Jerome Powell’s Vibe Check

The Federal Reserve — as widely expected — decided to maintain its benchmark rate steady at a range of 5.25% to 5.5%.

• Experts now predict the first rate cut will occur in September or November, with Jerome Powell and the other Fed leadership not being satisfied with inflation’s stickiness.

• Inflation has remained stubbornly high, with consumer prices rising +3.5% YoY in March — prompting concerns about borrowing costs for consumers (including credit cards and mortgages).

• Despite hopes for rate cuts, borrowing is expected to remain expensive, with mortgage rates possibly exceeding 7% again. However, savers may benefit from higher-interest savings accounts with yields above 5% and other attractive savings options.

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Disclaimer: This is not financial advice or recommendation for any investment. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.