Buffett said short horses when cars arrive. Private credit went long horses in enterprise software

Buffett once said if you saw cars coming in 1905, you should’ve shorted horses, not picked automakers.

Private credit in 2021-2022 decided to go long horses. Specifically, enterprise software at peak valuations funded with floating rate loans. pic.twitter.com/DY3dqVYS24

— junkbondinvestor (@junkbondinvest) February 5, 2026

U.S. hedge funds have cut software stocks’ share of net exposure to just 4%, the lowest level on record.

— Special Situations 🌐 Research Newsletter (Jay) (@SpecialSitsNews) February 5, 2026

Software Stocks absolutely falling off a cliff
byu/RobertBartus inEconomyCharts

Blue Owl tried to calm the “software credit” nerves by pointing out it’s 8% of AUM — and the broader picture helps: Q4 AUM just topped $300B and they raised $17.3B of new capital, even with the sector selloff.

— Kai – Briefing Block (@briefing_block_) February 5, 2026