Yesterday's market gremlins stayed at home as the volatility that one might have expected after the markets' historic two-day weather closure failed to materialize. In fact, the Dow Jones Industrial Average (INDEX: ^DJI ) and the broader S&P 500 (INDEX: ^GSPC ) ended yesterday essentially unchanged (the magnitude of change was less than 0.1%).
The macro view
Warren Buffett is adding to his "bet" on a housing recovery, as Berkshire Hathaway (NYSE: BRK-B ) will become the majority owner of a chain of franchised real-estate agencies in cooperation with another value-oriented investor: Brookfield Asset Management (NYSE: BAM ) . The network will operate under the name of Berkshire Hathaway Home Services. Although Brookfield is contributing a network of 53,000 real-estate agents acquired from Prudential Financial (without the rights to the Prudential name), Berkshire Hathaway Home Services is already the country's second-largest full-service residential brokerage firm.
Armed with what is, for all intent and purposes, an infinite time horizon and an optimistic outlook regarding the long-term economic prospects of the U.S., this type of bet is right in Buffett's wheelhouse.
The micro view
According to an SEC filing, experienced activist investor Carl Icahn has taken a 10% economic stake in Netflix (Nasdaq: NFLX ) , most of which was acquired in the past week. In the filing, Icahn suggests that "Netflix may hold significant strategic value for a variety of significantly larger companies." The market's response was unambiguous, as investors sent the shares up 14% yesterday -- rightly so, in my opinion, as Icahn has an excellent nose for value.
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