Money Morning

The Tide Is Quickly Ebbing on This Tech Giant

Warren Buffett famously said at the height of the financial crisis that you only know who’s been swimming naked when the tide goes out.

Unfortunately for him and his shareholders at Berkshire Hathaway Inc. (BRK.A, BRK.B), it appears that one of the Sage of Omaha’s biggest holdings, International Business Machines Corp. (NYSE: IBM), has been skinny dipping for a long time.

This Bear Market Indicator Is Off the Mark

Investors are taught that bear markets can’t occur unless the Treasury yield curve inverts – that is, unless short-term interest rates are higher than long-term interest rates. 

And that can only happen if the Federal Reserve raises the Federal Funds rate, which is the short-term rate that the Fed controls.

But that measure may be off the mark this time, and here’s why…