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Weekend Nuggets: (i) Buffet Slams Tax on Stock Buybacks; (ii) Fed Futures Price in 5.4% in July; (iii) Select Barron’s picks – GBTC on discount; SBGSY electric components & software; NTIOY on biofuels(iv) OPRA Beats;

News Review

BUFFET LETTER.  Warren Buffet called tax on stock buybacks promulgated by the economic illiterate and silver tongue demagogue; urged investors to shrug off the unrealized losses in portfolio, just as he did the larger unrealized gains the previous year; evangelized the alleged superiority of equities driven by the power of compounding retained earnings reinvestment in higher returning investments; noted a few big winners eclipse the losers.  For the first time will let heirs-apparent speak at the shareholder meeting, discussing the imminent transition to new management.  Also noted that his will directs no sale of his Berkshire Shares but doesn’t mention how many shares go to the will, versus other means of disposal.

BARRONS.  Barrons focused on the macroeconomic.  Barron’s survey of experts reveals everyone is confused that the most anticipated recession has yet to occur, despite the obvious warning signs.   Weighting of economy to service sector, pent up demand, strong consumer balance sheets are postulated as reasons.  The trader says that stocks are overvalued at approximately 17.5 times, although that is an opinion that may not be well-supported.  Trader says institutional investors pivoted into healthcare, and out of oil.  Select ideas from Barrons.

OPRA BEATS.  PRA reported a 32% overall revenue growth, beating street EPS estimates of $0.17 to $0.27, adjusted EBTA up 9%, to 21%.  Results were driven by PC footprint 12% search engine growth, and a whopping 55% advertising growth, reaching 324 users, 20 mm on mobile platforms.  Opera expects 1Q2023 revenue between $83 million an $85 million, and 2023 revenue of $370 million to $390 million.   Stock up almost 15% on team up with OpenAI, developer of ChatGPT.

Long a curiosity as a hidden tech value, OPRA is a Finland company that was founded in 1995.  OPRA operated one of the original, and once favored web browsers, obviously losing that market, and selling various business lines off.  It originally went public in March 2004, living through various gyrations, culminating in being taken private by private Equity firm, Golden Brick Capital Private Equity Fund I L.P. on March 11, 2016.     On July 27, 2018, OPRA issued shares in an IPO, raising about $115 million.  Since then, the company acquired YoYo Games from Playtech in January 2021, for US$10 million and launched the fintech Dify, an in-browser payment app that includes cashback service and a digital wallet.[48] Customers who use Dify get reimbursed when purchasing items from partner websites like NikeAsos, and eDreams.

  • GBTC on discount;
  • SBGSY electric components & software;
  • NTIOY on biofuels

Looking Ahead

  • Major Earnings Week of Monday February 27, 2023:  CostCo, Target, Lowes, DollarTree, Occidental Petroleum
  • Major Macro Week of of Monday February 27, 2023:  Pending U.S. Home Sales; Case Schiller, Consumer Conf., ISM, Jobs, China PMI
  • March 2, 2023:  ECB Account of Feb. 2023 Monetary Policy Meeting
  • March 16, 2023: ECB Rate Decision – expected 1/2 point to 3%, from minus 0.5 in July 2022

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