Weekly Update from RLA Tax and Wealth Advisory

By:  Dennis Tubbergen

Look What Warren Buffett Thinks About Stocks

         At the end of this year, Warren Buffett will be stepping down as Chief Executive Officer of Berkshire Hathaway.  Seems that on his way out the door, the Oracle of Omaha is stacking up cash for his successor to figure out how to deploy.    

         In the most recent regulatory filing, Berkshire Hathaway reported that the company’s cash holdings were at an all-time high of $381.7 billion.  That’s as of the end of the third quarter of 2025.  (Source:  https://www.zerohedge.com/markets/berkshires-cash-pile-hits-record-382-billion-amid-continued-stock-sales-t-bill-purchases)

         The company’s cash holdings are up $37.6 billion for the quarter.  To put that in perspective, that breaks down to increasing cash at a rate of $420 million per day. 

         For the twelfth consecutive quarter, Berkshire sold more stocks than it bought. 

         Obviously, Mr. Buffett doesn’t see a lot of opportunity in the current market.

         If you’re managing assets, and you’re not already doing so, employing the use of exit strategies in your portfolio may be advisable.

Amazon Cuts 30,000 Jobs

         Last week, Amazon announced that the company was cutting 30,000 jobs, and that is just for starters.  (Source:  https://www.profstonge.com/p/amazon-to-replace-600000-with-ai)

         “Forbes” reported that Amazon plans to cut 600,000 jobs, replacing these human employees with robots as the company moves toward automating 75% of the company’s operations.

         Growth of the US gross domestic product currently stands at a red-hot 3.9%.  The Administration’s AI czar, David Sacks, points to AI as comprising 40% of economic growth.  With AI contributing to economic growth AND job cuts, what will be the ultimate end result?

         “The New York Times” acquired an internal Amazon plan to replace 160,000 planned hires with artificial intelligence-fortified robots by 2027.  That’s slightly more than one year from now.

         The plan suggests the elimination of 600,000 jobs by 2033.  Amazon calculates that this move will save 30 cents on every shipped product.  In terms of dollars, that is about $2 billion per month in savings.

         Professor Peter St. Onge puts this 600,000 number in perspective (see link above).  That is the entire movie and video industry in the United States, including studio employees, actors, production people, and the guy who sells you the popcorn when you visit the theatre.

         Six hundred thousand jobs also represents the total number of people employed in the legal industry.

         It’s a lot.

         And Amazon is only one company that is looking to cut its blue-collar workforce in half over the next 8 years.  Apply that outcome to all blue-collar employees and you’re talking 10 million jobs.

         Investment in artificial intelligence is $400 billion annually and rising.  That’s about 10% of all investment in the economy and is ten times what was invested in the dot-com build-out.

         The reality is that these 600,000 jobs are the tip of the proverbial iceberg.  And it’s not just manufacturing jobs that will be affected.  AI has already replaced 200,000 finance jobs, and call centers in India are closing.

         While I firmly believe AI stocks are in a massive bubble, the AI job replacement trends are real and will accelerate.  This massive level of change will create new opportunities as the Industrial Revolution taught us.  Lower-paying jobs will be replaced by higher-paying service jobs that will require a more advanced skill set.

Is a College Education Overrated?

         Maybe, at least if you are observing what one large company is offering to high school graduates.

         Palantir Technologies, with a market capitalization of more than $200 billion, is a company with extensive contracts building AI solutions; that’s according to the company’s website.

         If you are looking to work for Palantir, perhaps as a software engineer, a degree from a respected university may not land you your dream job. 

         Palantir has developed and made available a program called a “Meritocracy Fellowship” that aims to attract high school students or recent high school graduates.  The fellowship offers a “Palantir Degree” and suggests that students can “skip the debt” and “skip the indoctrination”. 

         Acceptance into the fellowship is earned “solely on merit and academic excellence”.

         On LinkedIn, Palantir wrote, “chaos has ensued on university campuses” and “admissions are based on flawed criteria”.  The four-month fellowship is “in response to the shortcomings of university admissions” and pays students accepted into the program $5,400 per month.

         The job description says that the role is in New York, New York, and the company “encourages employees to work from our offices”.

         Additionally, the company noted that “opaque admissions standards at many American universities have displaced meritocracy and excellence.”

RLA Radio

         The RLA radio program this week features an interview that I did with Mr. Kerry Lutz, founder of “The Financial Survival Network”.

         I chat with Kerry about where he thinks the financial markets go from here and get his assessment of the health of the US economy.

         The program is posted and available now by clicking on the "Podcast" tab at the top of this page.

Quote of the Week

“Good advice is something a man gives when he is too old to set a bad example.”

                                      -Francios de La Rochefoucauld