Oct
17
Warren Buffet Has Lost His Mind!
Filed Under Stock Market
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.
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