Oct
17
Warren Buffet Has Lost His Mind!
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Could This Be It For The Oracle From Omaha?
Warren Buffet just invested $3 billion into General Electric and $5 billion into Goldman Sachs Group!
He has either lost his marbles OR he’s a genius.
I have another theory….
This could be Buffet’s attempt at ‘market philanthropy.’ A way to give confidence to the market and his cult following by saying “Hey, come back everyone! It’s OK. Look, I’m buying.”
Crazy you say?
Well, lets look at his motive, shall we?
- He cut a sweet deal with GE and Goldman to get 10% dividends etc. (Where else is he going to get 10% yield on billions of dollars ever year?)
- He owns billions in US stocks already. Fanning the “stocks are on sale” flame serves to prop up demand and prices for HIS current billions in US stock holdings.
Buffet stands to loose billions when the toilet flushes on the US economy. Wouldn’t you try to do something in his case?
He should know better. When the government prints money (and can’t pay their debts)
- The US dollar will devalue substantially
- Hyperinflation will rein
- Consumption drops
Normally, I defer to Buffet on financial matters but I have to say I think he got suckered on this one. I’m not with you on this one.
We haven’t seen enough blood on the streets to indicate the bottom is near. More pain be comin’
Here’s the story…
Berkshire’s Buffett: “I’m buying US stocks”
The Associated Press
NEW YORK - Warren Buffett has been moving his personal investments from safe U.S. treasury bonds into U.S. stocks, he wrote in an opinion piece in Friday’s New York Times.
“If prices keep looking attractive, my non-Berkshire net worth will soon be 100 per cent in United States equities,” he wrote.
The piece, titled “Buy American. I am,” reiterated one of the legendary investor’s favorite maxims: Be fearful when others are greedy; be greedy when others are fearful.
“To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions,” he wrote. “But fears regarding the long-term prosperity of the nation’s many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records five, 10 and 20 years from now.”
Since Wall Street stocks began to tumble in September, Buffett, and his investment company, Berkshire Hathaway Inc., have made large bets on U.S. companies, exacting rich dividend payments in the process. Berkshire Hathaway agreed on Oct. 1 to invest $3 billion in General Electric Co.’s preferred shares, which carry a hefty 10-per cent dividend. In late September, Berkshire Hathaway also bought $5 billion in preferred shares of Goldman Sachs Group Inc., which also pay a 10 per cent dividend. He also bought warrants to purchase another $5 billion common shares at about $115 each.
“Let me be clear on one point: I can’t predict the short-term movements of the stock market,” he wrote. “I haven’t the faintest idea as to whether stocks will be higher or lower a month - or a year - from now. What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up. So if you wait for the robins, spring will be over.”
Berkshire’s Buffett: I’m buying US stocks - Yahoo! Canada Finance.
Oct
16
Gloom, Boom and Doom Report
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This is an interview with March Faber on crisis state of the market and his predictions.
Pay attention … March Faber is editor and Publisher of the “Gloom, Boom and Doom Report” which highlights unusual investment opportunities around the world. The guiding philosophy is that, as Horace already observed, “many shall be restored that are now fallen and many shall fall that are now in honor.”
Best way make money right now?
Don’t lose money [laughing]
Play it safe.
Everybody assumes that the worst of the financial crisis is over. But that is far from being certain. And I think what has happened is that governments around the world have moved a step closer to becoming bankrupt themselves.
And that I guarantee you. The US government will go bankrupt it’s just a question of time.
Oh crap!
We Canadians do about 70% of our trade with the US. So we’re basically tied to the Titanic right now. Grab a lifejacket it’s going to be cold in the water.
Oct
15
I love being right
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Listening to the sheep tell me I was reckless and crazy for shorting the stock market for over a year - sucked.
But, have a look at what can happen when you DO NOT read the newspaper (sheep bible), watch the news and do the opposite of the sheep.
If you hold a Sheep Portfolio today…
Dow Jones October 15 2008
US stock markets down about 8.5%.
But, here’s a quick sample of how I did today.
In my portfolio I own the shares of the top 2 — Plus another that doesn’t show because it is a Canadian stock that did 14%
Top 5 Gainers
My wife’s uncle works for a company owned by Top Loser #1 - Ouch!
Oct
14
Iceland Crash Lands 77%
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Just when I thought it was safe to relocate my family to Iceland!
The beleaguered Icelandic stock exchange plummeted by 77 per cent yesterday, following a three-day suspension of trading.
The OMX Iceland 15 Index fell by 2,326.2 to 678.4 - the lowest since April 1996. The fall in shares contrasted sharply with a strong performance by European and Asian shares for the second consecutive day. The Icelandic index has lost 89 per cent of its value this year, making it the worst performing stock exchange globally.
Shares in six financial companies, including the now-government controlled Kaupthing, Landsbanki and Glitnir, remained suspended, as Iceland has been hit hard by the global financial crisis. Iceland has been forced to ask for help from Russia and the IMF to save its beleaguered economy. Trading in Icelandic shares was suspended on 9 October after the OMX Iceland lost 30 per cent of their value in nine days.
Icelandic stock market crashes on reopening - Business News, Business - The Independent
Oct
12
“Inflationary Holocaust”
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Man, its hard being a contrarian when you are surrounded by sheep, isn’t it?
Jim Rogers retired billionaire hedge fund manager, financial guru, world adventurer (2 times over) and hardcore contrarian … ( and my personal hero) says…
“…they [referring to governments] are unleashing an inflationary Holocaust”
Give up on any fantasy that there is a ’soft landing’ or this will be a short correction or a ‘rebound.’ This is going to hurt like hell … for sheep.
Hey, the truth hurts, folks. Suck it up, walk it off and dry your tears, ok?
Rogers believes:
- Bailouts are delaying the inevitable - world market crash
- The faster we let things crash the faster the markets will correct, recover and return to normal
- “Let ‘em go bankrupt!”
- Hyperinflation is coming
When you watch this video you can tell the anchors DO NOT like what Jim Rogers has to say.
HINT: Ah… when a billionaire financial talks you may want to just shut up and listen.
“Everything is being liquidated. Everything!”
“In a period like this you need to own the things where the fundamentals have not been impaired.”
The journalists then probe him to get specific on what equities he’s going to buy when
“I don’t think I’m I want to buy equities when the market caves in. I don’t think equities are going to come out on top.
Normally when you have a PANIC you buy the things where the fundamentals have been unimpaired and they will lead the market coming out.
Morgan Stanley is not going to be unaffected by this. So I’m buying commodities. Commodities are the only thing I know unimpaired with supply and demand terribly out of balance.”
What is Jim Rogers Rogers Buying?
What is Jim doing with his money and capital in his monster fund right now?
Buying more…
- Agricultural commodities (I’ll discuss which ones in a another post)
- Japanese Yen
- Swiss Franc
He is very bullish on Asian markets.
Oct
10
Dead Cat Bounce
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In general, I hate buzz words…
Why? If you’re not careful buzz words can turn you into a … sheep!
The media spoon feeds Joe & Jane Public [read sheep] a steady diet of buzz words to so they can understand AND sound like they have an educated opinion when they’re talking to friends. [Read the news media sucks - and will turn you into a sheep]
Remember these popular buzz words?
- “Flip flopper”
- “Top Grading” or “Right Sizing” – Anyone who’s been Right Sized knows that it doesn’t feel very “Right”
- “Free Market” - OK, now I’m just cheeky. BUT in light of the US market printing money to ‘bail out’ their “Free Market” I think most rational people would agree with me.
- “Soft Landing” - I love that one - It was pure BS the moment it was uttered.
But as a “Panic Profiteer” I love to hear the words “Dead Cat Bounce.” It’s music to my ears - especially when it means I’m profiting. (This doesn’t win me friends or excite immediate family)
What’s a Dead Cat Bounce?
Definition: A dead cat bounce is a term used by traders in the finance industry to describe a pattern wherein a spectacular decline in the price of a stock is immediately followed by a moderate and temporary rise before resuming its downward movement, with the connotation that the rise was not an indication of improving circumstances in the fundamentals of the stock. It is derived from the notion that “even a dead cat will bounce if it falls from a great height”.
What does a Dead Cat Bounce look like?
Stock Market Crash Correction October 10, 2008
My Prediction For What’s Next?
My prediction is there will be a ‘bounce’ for a few days to 2 weeks at most…
BUT this is just a ‘rest area’ on the way to the bottom and I’m positioned to profit from the panic.
Waiting to read about what happened to your retirement plan in the sheep news? Are you waiting for some sort of sign to fall out of the sky? Are you going to follow the rest of the sheep right off the cliff?