Buffett Buys GOOGL as the Market Turns Defensive

Fresh news and strategies for traders. SPY Trader episode #1430. Market consolidation is defensive, fueled by weak Q4 GDP estimates (due to the government shutdown) and reduced Fed rate cut probability, causing intense rotation from Technology into Utilities and Healthcare. Warren Buffett's $4.9 billion stake in Alphabet (GOOGL) provides a strong countercatalyst in the tech space. Investors are advised to maintain a defensive posture via UTIL and XLV, while treating GOOGL as a selective buy based on its strong value endorsement.

Episode Transcript

(00:00):
Welcome back to Spy Trader , the only podcast that delivers your financial insights faster than inflation .
I'm your host , Barry Cashflow , and it's 5 am on Tuesday , November 18th , 2025 , Pacific .
We've got a lot to unpack this morning as the market continues its cautious consolidation ahead of some critical economic reports .

(00:22):
The overall vibe is defensive , folks .
We are seeing major rotation out of growth and into safety .
Broad indices are struggling .
The S&P 500 is fading slightly and the Dow Jones is under pressure , largely dragged down by weakness in the Financials and Energy sectors .
The Nasdaq is mixed and volatile , trying to hold onto recent gains but clearly struggling with profittaking .

(00:47):
Now , for the biggest news driving sentiment this morning .
Alphabet , ticker GOOGL , shares jumped over 3% yesterday .
Why ?
Because the legendary value investor Warren Buffett’s Berkshire Hathaway disclosed a substantial 4.9 billion stake in the company .
That’s a massive vote of confidence , especially right before the expected release of their Gemini 3 AI model .

On the macro front , we got confirmation of a major headwind (01:14):
the recent 43day government shutdown , while over , is estimated to slash Q4 2025 GDP growth by 1.5 percentage points .
That brings our projected growth rate down to a sluggish 1.0% to 1.5% .

(01:35):
Investors are worried about the economy , and they are also worried about interest rates .
Cautious commentary from the Fed has caused the probability of a December rate cut to decline significantly , now sitting around 41% to 46% .
This ‘ higherforlonger ’ rate narrative is making tech investors nervous .

(01:56):
This brings us right into our analysis of the sector rotation .
The selling pressure in Technology is intense .
The XLK ETF is down 1.57% or lower as investors flee high valuations .
Where are they going ?
They are flocking to safety .
Utilities , represented by UTIL , is the strongest gainer , up 0.88% .

(02:19):
Health Care , XLV , is also showing relative strength .
This is the clearest sign yet that investors are preparing for an economic slowdown and prioritizing stable , noncyclical , dividendpaying companies .

Our main insight here is twofold (02:33):
First , defensive stocks are the place to be until we get clarity on Q4 growth and Fed policy .
Second , while the broad tech sector is correcting , specific companies with strong catalysts , like Alphabet , can break away from the pack .
So , what’s the trade for today ?
We're maintaining a defensive posture but keeping a few highconviction growth plays on a short leash .

(02:59):
First , for defensive positioning , consider increasing your allocation to the Utilities Select Sector SPDR Fund ( UTIL ) .
This ETF is the market leader right now , offering stability and predictable cash flows .
Second , if you need income and resilience , the Health Care Select Sector SPDR Fund ( XLV ) is holding up very well and belongs in your portfolio .

(03:26):
Third , for selective growth , despite the broader tech pullback , the Berkshire Hathaway endorsement makes Alphabet ( GOOGL ) a strong hold or selective buy .
That 4.9 billion investment says a lot about its longterm value .
Finally , keep an eye on risk mitigation .
With the economy slowing and rate paths uncertain , maintain your core bond allocation using broad funds like the Vanguard Total Bond Market ETF ( BND ) to hedge against equity volatility .

(03:58):
That’s all for this morning’s Spy Trader .
Stay safe out there , and I’ll catch you on the next bell !