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China will not approve current agreement to sell TikTok’s US operations – report

Global Times report

From the Global Times’ Hu Xijin:
Based on what I know, Beijing won’t approve current agreement between ByteDance, TikTok’s parent company, and Oracle, Walmart, because the agreement would endanger China’s national security, interests and dignity.
Hu is a mouthpiece for China so this is a strong hint. It was just starting to look like the US would approve it.
Beijing has decided that the US can pull the plug. They might be angling to punish US companies in response.

Happy 90th birthday to Warren Buffett

The Oracle of Omaha turns 90 today

Warren Buffett
Warren Buffet celebrates his 90th birthday today as the world’s sixth-richest man. At $82.1 billion, he’s done well for himself.
But what Jason Zweig notes in the WSJ is that the genesis of his genius was in playing the long game and starting as early as possible.
Around the age of 10, he read a book about how to make $1,000 and intuitively grasped the importance of time. In five years, $1,000 earning 10% would be worth more than $1,600; 10 years of 10% growth would turn it into nearly $2,600; in 25 years, it would amount to more than $10,800; in 50 years, it would compound to almost $117,400.
Today’s markets are as get-rich-quick as ever but the long game always wins.

Warren Buffett makes a big bet on gold

Buffett bought a stake in miner Barrick Gold

Barrick Gold Warren Buffett
Warren Buffett has famously disparaged gold but evidently he’s had a change of heart.
According to a Q2 13F filed today, The Oracle of Omaha added 20.9 million shares of Barrick Gold, which is the world’s second largest gold miner. He paid $563.5 million for the stake, which equates to $26.95 per share and his Berkshire Hathaway owns 1.2% of the company. It was the only new company he bought in the second quarter.
The shares closed at $26.99 on Friday but jumped about $1.00 in after hours trading.
Warren Buffett
This could indicate a massive change of heart from the world’s most famous investor, or one of his deputies.
His most-famous musing on gold was from back in 1998:
“(Gold) gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.”
As recently as 2018 he repeated his misgivings about gold.
“The magical metal was no match for the American mettle,” he wrote in his annual letter while comparing the returns of both since he first invested in stocks in 1944.
Now this doesn’t necessarily mean he has a new view on gold. Barrick’s cash flows with gold steady at these levels are compelling (and other miners are even more compelling).  Still, expect much more interest in the space now that Warren Buffett has given it his blessing.
Other highlights from his Q2 13F:
  • Exited Occidental Petroleum, but added to Suncor Energy
  • Cut JPMorgan stake by 62%
  • Cut Mastercard stake by 7%
  • Aside from SU, only added to STOR and KR
  • Reduced WFC, SIRI, PNC, MTB, BK
  • Exited DAL, LUV, UAL, AAL, QSR, GS, OXY
In terms of the ones he reduced. In general Buffett doesn’t sell shares unless he plans to sell out. However at times he has to sell to stay below ownership limits.
Overall, his investment mix doesn’t exactly show confidence in the economic or stock market recovery.

Oracle loses challenge to Pentagon’s $10bn cloud computing contract

A federal judge has cleared the way for the US Department of Defense to award its $10bn cloud computing contract to Amazon or Microsoft with a ruling on Friday dismissing a challenge from Oracle. Judge Eric Bruggink of the US Court of Federal Claims dismissed Oracle’s claims that the procurement process violated federal laws meant to ensure a competitive process and was marred by conflicts of interest. Because Oracle could not meet the criteria for the bid, “it cannot demonstrate prejudice as a result of other possible errors in the procurement process,” he wrote. The Pentagon named Amazon and Microsoft as finalists to win the multiyear contract in April, eliminating IBM and Oracle from consideration. It has said it expects to make a final decision by the end of the summer.

Oracle has been complaining about the way the bidding process has been conducted since last year. The company objected to the Pentagon’s decision to award the contact to a single company, rather than breaking it up among several providers, arguing that favours Amazon Web Services as the biggest player in the industry. Oracle has also alleged conflicts of interest over AWS’s hiring of two former defence department employees involved in the Joint Enterprise Defense Infrastructure (JEDI) procurement process.

 

The company previously filed a complaint with the Government Accountability Office, which was also rejected. Oracle said in a statement: “We look forward to working with the Department of Defense, the Intelligence Community, and other public sector agencies to deploy modern, secure hyperscale cloud solutions that meet their needs.” AWS, which was a defendant in the case alongside the government, said it “stands ready to support and serve what’s most important — the DoD’s mission of protecting the security of our country. The DoD deserves access to the best technology in the world and we are unwavering in our support to their mission.” “We are pleased with the determination made by the US Court of Federal Claims. This reaffirms the DoD’s position: the JEDI Cloud procurement process has been conducted as a fair, full and open competition, which the contracting officer and her team executed in compliance with the law,” said Elissa Smith, a Department of Defense spokeswoman. “DoD has an urgent need to get these critical capabilities in place to support the warfighter and we have multiple military services and Combatant Commands waiting on the availability of JEDI. Our focus continues to be on finalising the award decision.”