Berkshire Hathaway now owns almost 10% of Lennar. The stock popped. Retail traders think this means something about housing.
It does not.
Warren Buffett did not wake up and decide homebuilders were undervalued. Greg Abel runs Berkshire now. Abel looked at a spreadsheet. The spreadsheet said buy Lennar. He bought Lennar. That is the entire story.
But you read "Berkshire" and "Buffett" in the same headline and your brain flooded with dopamine. You logged into Robinhood. You bought three shares at the top. You texted your cousin about the Oracle of Omaha seeing value where others saw fear. Your cousin does not care. Your cousin is embarrassed for you.
Lennar builds houses in Miami. Berkshire bought a stake large enough to file paperwork about it. The filing contains no wisdom. It contains numbers and dates. You will read those numbers as prophecy. You will lose money doing this.
The chart on Lennar has been going down for months. Then Berkshire filed. Then it went up. This is not analysis. This is a calendar. But retail traders will call it a signal. They will say Buffett sees the bottom. They will say housing is back. They will say Miami is undervalued at these levels despite having never been to Miami.
Berkshire owns railroads and insurance companies and a paint manufacturer. It owns so many businesses that adding a homebuilder is like adding a napkin to a landfill. The position is a rounding error. You made it your entire thesis.
Lennar was beleaguered yesterday. Today it is a Berkshire portfolio company. Tomorrow it will be beleaguered again. The house does not change. Only your perception of the house changes. You are why the house costs too much.
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