Today is the 196th day of my dynamic post, and there has been no interruption for a day. Each one is not perfunctory, but prepared seriously.

I have set a small goal for myself, which is to write consistently for a year. If you think I am a serious person, you can join me, and I hope the content every day can help you. The world is big, and I am small. Follow me so that you can easily find me.

Quickly take a look, my dear friends. It's the end of the year and Baba has actually made a move, unbelievable. What is he doing??

Will the global economy bleed in 2025? The stock god Buffett has given his judgment. In just these few days, Buffett, holding 2 trillion in cash, has finally started to act. He first bought Domino's Pizza, and then made big moves to acquire shares of Occidental Petroleum, Sirius XM, and Verisign. There is a favorite Buffett indicator in the stock market, which is the percentage obtained by dividing the total market value of stocks by GDP. If it is greater than 100, it means that the stock market has a huge bubble. Currently, the Buffett indicator in the United States has soared to 209%, which is on par with the 1929 Great Depression, and far exceeds the 140% of the 2008 subprime mortgage crisis. It is not difficult to understand why, as of the third quarter of this year, Berkshire Hathaway has been net selling stocks for 8 consecutive quarters, and Buffett even sold off 1 trillion of his beloved Apple stock in a clearance-style sale. But the question is, why is he buying stocks again now? The stock god's year-end shopping spree definitely indicates that he has sniffed out some special signals!

If you observe carefully, you will find all the clues pointing to one target, which is oil. So why did Buffett set his sights on oil? On the surface, it seems that the key lies in the price. Since April this year, the stock price of Western Oil has plummeted by 35%, almost wiping out all the gains of the past two years. Such a decline has put the stock price of Western Oil into Buffett's striking zone, which may be an enticing buying signal. However, for the stock market, his vision is definitely not limited to the current stock price. So some people also say that Buffett is interested in the dividend yield of Western Oil. The preferred shares of Western Oil he holds can provide a dividend yield of up to 8%, and the dividend yield of Western Oil's common shares is also close to 2%. When combined, Western Oil can make Buffett earn 10% annually. In today's low interest rate environment, such a dividend yield is undoubtedly a strong moat. This argument does make sense, but does it mean we have finished explaining Buffett's investment logic here? If we dig deeper, you will find that Buffett's fundamental reason for targeting oil may be that he sees the loosening of the dominance of the petrodollar resulting in a redistribution of global economic power.

In the mid-1970s, when the Bretton Woods system collapsed, other OPEC countries signed agreements to settle international oil transactions in US dollars. Since then, the US dollar has been tied to oil, and without US dollars, oil cannot be purchased. This is called the petrodollar. Saudi Arabia trades its loyalty to the petrodollar in exchange for US security, and the income from oil exports is mainly used to purchase US Treasury bonds after deducting import expenditures. Therefore, the petrodollar not only provides the US with low-cost financing but also plays a crucial role in preventing the collapse of the massive US Treasury bonds.
But since last year, the situation has changed. In January last year, the Saudi finance minister publicly stated that Saudi Arabia is willing to introduce other currencies in oil trade. This shows that Saudi Arabia is not willing to be held hostage by the US dollar. As a result, the dominance of the petrodollar will loosen. Of course, the problems we see are also seen by Americans. For this reason, on one hand, Trump has already taken measures to strengthen the dominance of the petrodollar before returning to the White House. On the other hand, the conflict between Russia and Ukraine has made countries realize the importance of oil and gas energy, and the impact of war on oil is obvious, such as the instability of the situation in Syria, and the uncertainty of Iran and Israel after Trump took office. All these add a lot of uncertainty to the situation next year.

Looking back at Buffett's addition of Western Oil, perhaps the old man perceived the global economic situation for next year earlier than we did. There may be many unexpected situations, which could very likely lead to a surge in oil prices. Perhaps this is the core reason for his significant purchase of Western Oil. What do you think?

Keep up with my posts every day. You will definitely gain and grow! Wish you a successful trading
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