4 votes

Billionaires dumping stocks like they're going out of style (including bank stocks).

Despite the 6.5% stock market rally over the last three months, a handful of billionaires are quietly dumping their American stocks . . . and fast.

Warren Buffett, who has been a cheerleader for U.S. stocks for quite some time, is dumping shares at an alarming rate. He recently complained of “disappointing performance” in dyed-in-the-wool American companies like Johnson & Johnson, Procter & Gamble, and Kraft Foods.

In the latest filing for Buffett’s holding company Berkshire Hathaway, Buffett has been drastically reducing his exposure to stocks that depend on consumer purchasing habits. Berkshire sold roughly 19 million shares of Johnson & Johnson, and reduced his overall stake in “consumer product stocks” by 21%. Berkshire Hathaway also sold its entire stake in California-based computer parts supplier Intel.

Continue reading at: http://www.moneynews.com/Outbrain/billionaires-dump-economis...



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Mean-time-to-failure is ~ 38 years. Cataclysmic failure = 100%.

Federal Note pretending to by United States Dollar, has lost 94% of the 1913 Dollar value. Purchasing value in the village market is all but gone.

Exceptions are few are far between. Here are 3 still in the market:

  • British Pound Sterling ~ 300+ years (lost sterling silver alloy)
  • Swiss Franc ~ 130 years (list metal backing)
  • United States ~ ~ A century. Federal Reserve Note (lost silver alloy purity & weight, 1965; lost gold backing, 1933 & 1971) Pretend US Dollar note)

Central Banks Committing Chomos? 05/26/2011

Fine print: Author is not practiced in the art of banking. Did not matriculate grammar school. Spotty employment record.

Disclaimer: Mark Twain (1835-1910-To be continued) is unlicensed. His river pilot's license went delinquent in 1862. Caution advised. Daily Paul

Cyril's picture

Yup.

Yup.

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

Cyril's picture

What are stocks valued in, again ?

Gold and silver have survived millenniums.

In his latest video, Mike Maloney and contributors recall us kindly that ... EVERY SINGLE ONE OUT OF 600 fiat currencies - yes, SIX HUNDREDS of them (and starting with the letter "A" or "B") in History went to ... ZERO:

http://www.youtu.be/DyV0OfU3-FU

Fiat currencies seem to have a 100% failure rate.

WHY on earth the post-1971 US dollar WOULD BE any different ?

WHAT does that mean for today's stocks ?

Here's the answer to these two contemporary questions:

http://www.youtu.be/dv7H7iiyBsw

Point.

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

It appears there are two problems to be dealt with

The first is the rapid rise in the stock values as the dollar value plummets. This can be (and is now) foreseen and planned for as we're trying to do now.

The second is the question of what will happen when it becomes no longer viable. Will they re-monetize gold? If so, we should be converting wealth to gold. Would they install another fiat such as the SDR? If so, gold might simply be of the same value (in purchasing terms) as it is now. (Maybe plus a bit) Would they institute a digital currency that only they control? If so and depending on how they go about it, we could get screwed. Sure the back room deals will allow the big players to sell their gold for fair value but that's not likely in our levels of the game.

My best guess is still very murky but I have the feeling that only hard assets like productive businesses, rare art, land and similar things are a definite guarantee.

Thoughts?

Cyril's picture

Thoughts?

"Thoughts?"

Sure. Now a NO-BRAINER on this end.

My economic intuition tells me there really is nothing essentially flawed or (morally) "wrong" in the notion of stocks - as an appraisal for the discrete, temporal value of a company, or a group of associated individuals (e.g., sport team) or even, why not, a well-delimited set of intangible intellectual properties - e.g., patents, copyrights, you name it.

Nothing wrong at all, IMO.

But as you point out, what's essentially flawed for the long term (and 100 or so years isn't even quite THAT long of a term when speaking of corporations) ... is the reckless idea of "backing" such valuations in terms of fiat currency - much elastic, and with centralized "elasticity authority" - by very construction.

Actually : of "backing" ANYTHING in ANY fiat currency.

Gold and silver COST energy to get mined. That cost BALANCES the temptations / intents for voluntary, controlled inflation.

Indeed: as with much of everything else, it'd likely be much wiser, much less risky to make those in gold or silver... Or anything else we might discover having the same friendly properties as these two guys have - portability, divisibility, scarcity, etc.

It just so happens it doesn't seem we have many others out there provided by Mother Nature.

Seriously, my rationale is:

I even find totally LOGICALLY ABSURD or UTTERLY SUSPECT that anyone would ever come with the idea of putting A THIRD ITEM in what ought to be a pair, i.e., a fiat currency intermediary somewhere - totally redundant and prone to generate (statist) friction:

1. hard or well-defined intangible asset (e.g., some patent, some book's copy rights)

2. gold (and/or silver in some supply-demand parity or not)

3. fiat currency ? USELESS - REDUNDANT - HAZARDOUS - PROVEN 100% FAILING

Two fixed points ought to be it, and that's it. How/where/when/why put a third in there ?!

Or: HOW THE HELL a third, intermediary, completely arbitrary, completely elastic valuation criterion could be ANY meaningful, in the first place ?

Can't A SINGLE FRACTION to be computed be NECESSARY and SUFFICIENT for trading purposes ?

Duh.

THAT makes absolutely NO SENSE whatsoever to me, now, if it's not for in fact confusing, stealing, biasing things on/from one end or the other (1), or (2) (plus, made out of cheap cotton to add insult to injury!)

Well, of course we know how it works : ANY fiat currency has a VERY nice property - FOR THIEVES, COUNTERFEITERS - confessed or not... as that costs (TIME + ENERGY) almost nothing to create MANY, MANY more units of it. There you have it:

WHOEVER controls the fiat tokens creation process can manipulate either or both of the two fractions forced down our throats:

(1) / (2) and (2) / (3).

Those don't want to be handcuffed by Mother Nature's Law all in a SINGLE fraction - (1) / (2).

Nah. What they want is as in their childhood I suppose:

A rigged game of Monopoly.

Q.E.D.

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

QED, so true

I hear what you're saying in what should be the currency of choice. That's all becoming more and more obvious of late.

What I was wondering was what you think the best place would be to hold value through the transition of the crash. I'm not completely convinced that the little guys won't get screwed in the short term holding gold. Granted, the long term will settle gold back to intrinsic value (good for us) but that may not happen for a while during the chaos.

Sent you a google chat invite.

Cyril's picture

Stocks vs. the gentleman's PM : the case of silver & case for it

I made the following point recently to someone complaining about silver and its relatively disappointing performance as a good store of capital value (savings) over the last two years...

"See, I don't see silver as strict investment per se. It's not about yield as with stocks where you gamble - in the strict sense, for the latter.

You complain about silver, manipulated or not, over the last 2 years, somehow disappointing and as an "eroding" investment. Granted, it could have been better, if only in support, after its promising surge of 2011.

But see, AFAIC, I don't contemplate my future within a 2 year window. That is more in the decade ballpark - at minima... So, shall we see, for silver? But let us take just the last 5 years.

Yes, let us gauge. Take the official CPI average from the Bureau of Lying Statisticians... who reports a 2.5% inflation per year, tops, thanks to the Fed policies. Or take the shadowstats equivalent, with a 5% CPI-like average instead...

Let us consider the latter, first. 5% inflation / year over 5 years = an outrageous 27.6% total, after those 5 years.

Now, silver... Say you decided to stack just $100 worth of it per year, since 2008.

In 2008, 2009... Avg. AG price = $13/oz, so you'd have got 14 ounces by 2010.

Then, 2010: at $15/oz, you got 6 more.

Then 2011: $33/oz (avg.) you got 3 ounces only, and idem in 2012, at $30/oz.

Thus, in 5 years, you spent $500 (in fiat USD) to get your 26 ounces total.

You decide to dump it all, now... At $30/oz: 30 * 29 = $870.

Then you compute: 1.276 * 500 = $638... Then 870 - 638 = $232.

And finally 638 - 500 = $138 : that's what inflation would have eaten if you hadn't stored your wealth in silver.

(an item that'd have cost $500 in 2008 would cost $638 today, and $232 would be the extra left from storing value in silver, prior to using its purchasing power later on)

Still, disappointing, silver? Well, depends, certainly not over the last 5 years or more, past the Hunt brothers story of 1980.

And here is the sweet spot: would you believe what the BLS says with 2.5% inflation / year... You're even more of a winner, at 13% inflation "only" since 2008:

500 * 1.13 = 565, and 870 - 565 = $305."

(an item that'd have cost $500 in 2008 would cost $565 today, and $305 would be the extra left from storing value in silver)

Hence, bottom line questions:

do you see any clue of an inverted slope for long term silver?

If you don't, then you can see immediately the only reasonable thing to do, not to become "rich", but at least escape the banksters' large scale theft.

Could you say the same about putting your fiat dollars in stocks... for an overall yield expected 5 years later?

AFAIC, I am really NOT sure anyone could... EVER.

'Makes sense?

Enjoy re-doing this friendly 12 year old Math for yourself... Say, since 2000...

:)

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

ecorob's picture

Remember the United and American Airlines...

"put" options the week before 9/11?

A "put" means you are betting that something will go down and when it does, you make money.

Last week, ONE investor placed 100,000 "put" options totaling 11 million dollars against the stock market financials ETF (stock ticker XLF).

http://www.abovetopsecret.com/forum/thread924403/pg3

ONE person has 11 million bucks to wager? That is seriously one rich dude with insider knowledge to risk all that.

hmmmmm?

its 'cos I owe ya, my young friend...
Rockin' the FREE world in Tennessee since 1957!
9/11 Truth.

Perhaps DTCC would have a record of such a transaction.

They have be recording most all inter-bank transactions in the US for abut 4 decades. They probably have tabs on just about everyone getting paid through our US banking system.

Example: Who got the money? Where? When? How much? Why?

What might you do with that kind of insider information?

Disclaimer: Mark Twain (1835-1910-To be continued) is unlicensed. His river pilot's license went delinquent in 1862. Caution advised. Daily Paul

Be serious? One US company Clears $2 quadrillion (cleans?)

Ironically, the most common place that company stashes $2 quadrillion is in their footnotes. Here is an example:
$2 Quadrillion footnote about 55 Water Street flooding DTCC 12/01/2012

Monetary footnote world record: Why did Guinness Book miss the most quantitative bookie of them all? Why are folks so oblivious about where their paper-money goes to hide?

Disclaimer: Mark Twain (1835-1910-To be continued) is unlicensed. His river pilot's license went delinquent in 1862. Caution advised. Daily Paul

Cyril's picture

Stocks don't mean much.

Stocks don't mean much. The DJIA has been crashing for 10 years already anyway - in purchasing power as compared to the only real monetary store of value: gold.

That simple, basic homework has been done already; help yourself to see the assessment:

http://www.youtu.be/dv7H7iiyBsw

Thus, this is nothing new. The sole efficient artifice that hides this reality from your average man is the sustained, soaring since 2008, injection of Monopoly money into the system.

The Fed claims the prices inflation is below 2 something percents, while it is enough to go out for groceries to see it is likely at 8% or more. More relevant and useful economic indicators:

* how many Americans get new, real jobs
* how many have really paid income, profit, housing taxes over 2012
* how many retire
* how many go on disability
* how many depend on SNAP

The first 2 shrink while all the latter keep expanding.

The US is merely following the European pattern - with an extra tremendous wars spending for more than 2 decades now.

Thank Bush, thank Clinton, thank idiot Bush son, thank Obama following and accelerating the globalist leeches' plan.

Grinding Down America.

America becoming Sweden, with just a genuine ugly touch to it.

We can but only watch. Although we ought to keep denouncing this infamy, and try resist.

Peace.

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

I think this article is kind of late,,,Berkshire Hathaway's

form 13f-hr came out on 2.14.13 for the quarter ending 12.31.12: http://www.sec.gov/Archives/edgar/data/1067983/0001193125130...

Meanwhile this article came out 2.27..13 days after the news hit the wire

Just out of curiosity,

even if the intel is not "hot off the presses," how does that make it not worth noting?

i just checked their form 13f-hr for the quarter ending

9.30.12..http://www.sec.gov/Archives/edgar/data/1067983/000119312512470800/0001193125-12-470800-index.htm...he didn't own intel at that time either lol..the article is way behind on his intel sell...

meekandmild's picture

and the market keeps going up.

Dow
14,096.62
21.25
+0.15%
^DJI

Nasdaq
3,174.58
12.32
+0.39%
^IXIC

The bigger they are the harder they fall.

People are sensing something on the lower rungs.. us poor folks ya know... It's all economic smoke and mirrors and when the smoke turns to fire and the mirror breaks from the heat.. it's gonna be way more than 7 years bad luck!

I just hope it holds out for another 6 months. I'm almost ready. Almost!!!

Patriot Cell #345,168
I don't respond to emails or pm's.
http://www.youtube.com/watch?NR=1&feature=endscreen&v=qo8CmO...
Those who make peaceful revolution impossible will make violent revolution, inevitable.

I see Velveeta is busy downplaying downplaying downplaying

Seems to be his typical self. Probably a paid internet damage control man. :)

Patriot Cell #345,168
I don't respond to emails or pm's.
http://www.youtube.com/watch?NR=1&feature=endscreen&v=qo8CmO...
Those who make peaceful revolution impossible will make violent revolution, inevitable.

If you must see it that way,

If you must see it that way, I "downplay" because of my own experiences and because I understand the oft-used, but seldom understood truism that 'all people are self-interested'.

As for your comment, "paid internet damage control man"... I think you were making a friendly joke, so I won't blow up disproportionally in haste or fury.

No joke.. I have no proof no more than you do with any of

your previous comments but in your case I can see how that truism works, which leads me back to you being paid to downplay things on this site.. it's pretty much all I've ever seen you do.

Patriot Cell #345,168
I don't respond to emails or pm's.
http://www.youtube.com/watch?NR=1&feature=endscreen&v=qo8CmO...
Those who make peaceful revolution impossible will make violent revolution, inevitable.

I'm making the same amount

I'm making the same amount you are are, that is to say exactly NOTHING.

PDF link to Aftershock,

the book mentioned in the article, for anyone who is interested.

http://joomlaserverhost.com/misctradebooks/ProtectYourselfan...

I wouldn't take any of

I wouldn't take any of Buffet's moves too seriously. Berkshire completely flubbed and misread the market at the beginning of this depression. I speciffically remember how they massively underestimated how far GE's stock would fall..

ecorob's picture

Why would you?

He's just the richest investor in the world. What does he know?

You are way smarter than he is. (Thats why you are here and he is there.)

its 'cos I owe ya, my young friend...
Rockin' the FREE world in Tennessee since 1957!
9/11 Truth.

He got rich by being smart

He got rich by being smart and he had the very good luck to get in on the market at the very best time one could get in the market. He has made some really dumb moves recently and he won't live forever. Also, Carlos "Slim" Helu is richer.

Beyond that, do you have a point?

ecorob's picture

I made my point.

Why didn't you get in, then?

You not only do not have a point, you make no sense whatsoever commenting on other people's points.

You are a waste of time...as always!

Hasta la vista, loser!

its 'cos I owe ya, my young friend...
Rockin' the FREE world in Tennessee since 1957!
9/11 Truth.

"Why didn't you get in, then?"

Um.... Because I wasn't alive then.

ecorob's picture

I've got some news for you...

you're not alive now!

its 'cos I owe ya, my young friend...
Rockin' the FREE world in Tennessee since 1957!
9/11 Truth.

Welcome to my 'block' list.

Welcome to my 'block' list.

And Gaddafi had around $70

And Gaddafi had around $70 billion at the time of his death. Lets not fool ourselves and believe that the richest men in the world will whore their names and fortunes out to the Forbes 100 richest men list.

I agree,,i think Buffett is going senile, and

will underperform SPY for the rest of his career