the bottom signal..........Buffett blows up
- Thread starter apitrader
- Start date
We have some real sharp cookies on this thread. Let's clear a few things up. Buffet has a huge derivatives trading operation. In fact, he has made a fortune in arbitrage. Also, he never uses margin, all his puts are cash secured as is all his stock purchases and put sales.
He does use leverage indirectly through the cash flows he generates on his insurance companies. But technically that is more akin to re-investing dividends then outright leverage.
And yes, the guy does hedge. For over 4 years he was short the dollar and made a king's ransom on that position. He got out of that position near the top.
He does use leverage indirectly through the cash flows he generates on his insurance companies. But technically that is more akin to re-investing dividends then outright leverage.
And yes, the guy does hedge. For over 4 years he was short the dollar and made a king's ransom on that position. He got out of that position near the top.
and that would be a hedge against what?He is running a US company traded in USD. if you ask him I doubt he would say its a hedge, more like a macro bet. he got out because the carry got worse, thats hardly how one would treat a hedge
And he was bragging about 1.65 USD to BRL few months ago so he must have lost some money when brazil tanked
It seems guys later in life, Livermore, Kerkorian, I don't know, name some more, do some stupid things when they age. Who's to say this guy isn't going to blow up. The allure of wealth must ring hollow to a guy like this. He is more vocal than ever.
I wouldn't doubt if he didn't do something stupid, and will seriously damage his reputation. Anybody watch Greenspan this week? Would anyone have guessed he would have admitted an error? Everything is in play.
And some wealthy folks are scared to death, and they haven't sold yet. Friday confused me. Up some before we air it out? We have to get those people to blow out. A lot have sold, but not as many as I thought.
Think about this. If you don't think for yourself, and most dont', if you 'do your own stuff', and some do, where do you go for advice? The Schwab commercial says', don't run. But when that fear at 7000, or 6000 comes at you, you'll sell. And maybe Buffett is under pressure we don't see. We don't get away this easily. The real pressure is only five weeks old.
I wouldn't doubt if he didn't do something stupid, and will seriously damage his reputation. Anybody watch Greenspan this week? Would anyone have guessed he would have admitted an error? Everything is in play.
And some wealthy folks are scared to death, and they haven't sold yet. Friday confused me. Up some before we air it out? We have to get those people to blow out. A lot have sold, but not as many as I thought.
Think about this. If you don't think for yourself, and most dont', if you 'do your own stuff', and some do, where do you go for advice? The Schwab commercial says', don't run. But when that fear at 7000, or 6000 comes at you, you'll sell. And maybe Buffett is under pressure we don't see. We don't get away this easily. The real pressure is only five weeks old.
we are on the other side of a big momo play(aka the credit bubble).
Most bagholders will hold on like grim death(as per usual)
It will be time not price that eventually does these people in.
The whole "buy and hold" mentality was sold during the credit bubble of 1987 to 2008.
It will take a couple of years of sideways action at the bottom for these folks to figure that out.
Quote from 1flyfisher:
Buffy has lost 10 Billion as of yesterday Oct 23 not factoring todays -312 drop.
History repeats itself for the ignorant. Funny thing about all this is how when markets tumble there are always those schmucks that say step in and BUY, stocks are cheap, there are great bargains out there, buying opportunity of a life time, You'll never see these bargains again!!!! Then the market goes down and down and down....and then down some more. Same BS was spread during the tech bubble pop. As markets went down 30-40% all you heard was, "We are close to the bottom" "There are great buys out there." >>>>LOL
Many were stepping in and snatching up all those great tech companies when the Nasdaq was down 30-40% Oracle, Cisco, etc....then the Nasdaq went down to support at 3700, then 3400, then 2800. The nasdaq bottomed at 1200ish down another 30%+ from the 40% levels where all the knife catchers where pounding the table and stepped in. All those GREAT BUYS of a lifetime in solid TECH co's Cisco's Oracles etc were cut to ribbons even further. Nasdaq from 5000 to 1000, where is it now? We didn't have half the shit going on economically and all the toxic crap we have going on now, not even close.
......Buyer Beware.....
Dow 7000 (or worse)can happen.
Keep your powder(long$$$) dry. Buy on the way up...not down.
And enjoy the outstanding trading environment.
HAPPY TRADES!
Yes, all value investors of the world were buying Nasdaq stocks at 5000. Your "If I can't assess the true value of a stock then nobody can" logic is flawed. Buffett can't blow up because thats not his style of investing. He doesn't use leverage and he picks stable, large companies.
What did occur to me, before I made the smart-ass comment, is that many here think Buffett is just like they are. He is not. Buffett is doing deals that are not straight-up stock purchases, but rather structured deals.
What also occured to my smart-assedness, is that this trade is not an exchange regulated trade, but rather OTC and is very likely given terms that are very one-sided to him on margin call ability of the counterparty. I have my suspicions that the other side of this trade is either an insurance company (he is in the business you know), or a massive pension/retirement fund that bought this trade as a hedge for a long term portfolio. Either way, I have serious doubts that he structured a derivative that would have large potential margin calls associated with it.
Step out of your box for a bit, there IS a different world out there.