House Price Crash forum > Where To Invest Next-- Buffett Sets Out Strategy

Full Version: Where To Invest Next-- Buffett Sets Out Strategy

House Price Crash forum > Investment > Investment in general

Realistbear

Mar 2 2008, 01:47 PM

http://uk.biz.yahoo.com/01032008/325/buffe...id-profits.html

Buffett faults housing crisis amid profits

NEW YORK (Reuters) - Warren Buffett concluded a highly profitable year for his Berkshire Hathaway <BRKa.N> <BRKb.N> with an admonition for lenders who fuelled the housing crisis and words of caution that Berkshire's own results might be less stellar than in 2007.

Despite an 18 percent fall in fourth-quarter profit, net income for all of 2007 rose 20 percent to $13.21 billion (6.65 billion pounds)....../

Buffett plans to still focus mainly on U.S. investments, despite the country's "many imperfections and unrelenting problems." That includes housing, where Buffett ladled blame on lenders who weakened their underwriting standards in the false belief that housing prices would go up and keep going up.

"Today, our country is experiencing widespread pain because of that erroneous belief," Buffett wrote. "As house prices fall, a huge amount of financial folly is being exposed. You only learn who has been swimming naked when the tide goes out -- and what we are witnessing at some of our largest financial institutions is an ugly sight."

.../

I think Warren is, as usual, right. Solid Multinationals and stay away from anything* that has bloated in price recently.

I am seriously considering a move into Honeywell stock and dabbling in the energy sector generally.

_______________

* Anything.

tinecu

Mar 2 2008, 01:56 PM

QUOTE (Realistbear @ Mar 2 2008, 01:47 PM)

http://uk.biz.yahoo.com/01032008/325/buffe...id-profits.html

Buffett faults housing crisis amid profits

NEW YORK (Reuters) - Warren Buffett concluded a highly profitable year for his Berkshire Hathaway <BRKa.N> <BRKb.N> with an admonition for lenders who fuelled the housing crisis and words of caution that Berkshire's own results might be less stellar than in 2007.

Despite an 18 percent fall in fourth-quarter profit, net income for all of 2007 rose 20 percent to $13.21 billion (6.65 billion pounds)....../

Buffett plans to still focus mainly on U.S. investments, despite the country's "many imperfections and unrelenting problems." That includes housing, where Buffett ladled blame on lenders who weakened their underwriting standards in the false belief that housing prices would go up and keep going up.

"Today, our country is experiencing widespread pain because of that erroneous belief," Buffett wrote. "As house prices fall, a huge amount of financial folly is being exposed. You only learn who has been swimming naked when the tide goes out -- and what we are witnessing at some of our largest financial institutions is an ugly sight."

.../

Aren't you contradiciting yourself RB?

Hasn't energy 'bloated in price recently'....
If we in the first stage of the 30 year bull market in commodities...then you snooze you loose

In difficult credit conditions there is no such thing as a Solid Multinational...they all gorge on debt.

narco

Mar 2 2008, 01:58 PM

The title is confusing and misleading. I can't see even the slightest hint regarding gold here.

Realistbear

Mar 2 2008, 02:02 PM

QUOTE (tinecu @ Mar 2 2008, 01:56 PM)

Aren't you contradiciting yourself RB?

Hasn't energy 'bloated in price recently'....
If we in the first stage of the 30 year bull market in commodities...then you snooze you loose

In difficult credit conditions there is no such thing as a Solid Multinational...they all gorge on debt.

Some has--I am thinking more on the exploration side than the oil companies per se. But not quite yet--still waiting for another big drop before getting back in. DOW should hit 11k soon and the FTSE at around 5k. Then it may be a case of sitting tight for a few years on a buy and hold approach with good value stocks. If the DOW drops to 11k that will be 3k down from the top or around 20% which sounds about right for the soliod multinationals.

Realistbear

Mar 2 2008, 02:02 PM

QUOTE (narco @ Mar 2 2008, 01:58 PM)

The title is confusing and misleading. I can't see even the slightest hint regarding gold here.

Exactly.

Bardon

Mar 2 2008, 02:03 PM

Good to see he is buying up Posco after me... Coke another good one a defensive stock and well placed to grow during the water bubble

Impartial

Mar 2 2008, 02:27 PM

QUOTE (Realistbear @ Mar 2 2008, 02:47 PM)

http://uk.biz.yahoo.com/01032008/325/buffe...id-profits.html

Buffett faults housing crisis amid profits

NEW YORK (Reuters) - Warren Buffett concluded a highly profitable year for his Berkshire Hathaway <BRKa.N> <BRKb.N> with an admonition for lenders who fuelled the housing crisis and words of caution that Berkshire's own results might be less stellar than in 2007.

Despite an 18 percent fall in fourth-quarter profit, net income for all of 2007 rose 20 percent to $13.21 billion (6.65 billion pounds)....../

Buffett plans to still focus mainly on U.S. investments, despite the country's "many imperfections and unrelenting problems." That includes housing, where Buffett ladled blame on lenders who weakened their underwriting standards in the false belief that housing prices would go up and keep going up.

"Today, our country is experiencing widespread pain because of that erroneous belief," Buffett wrote. "As house prices fall, a huge amount of financial folly is being exposed. You only learn who has been swimming naked when the tide goes out -- and what we are witnessing at some of our largest financial institutions is an ugly sight."

.../

RB, get a grip, we know you don't like gold and love the dollar - the 2 craziest ideas to have right now considering the evidence.

Buffet has not stated in any way in this article to get out of gold, if anything the evidence is racking up more than ever for the case of gold.

gold is NOT boated in price.

Errol

Mar 2 2008, 03:10 PM

Gold is not bloated in price so I'm not clear where the relevance of this article lies. Lets talk about bloated prices again when it gets to $5000 per ounce.

narrowescape

Mar 2 2008, 03:14 PM

In answer to the thread title.....

No he isn't.

InternationalRockSuperstar

Mar 2 2008, 03:18 PM

QUOTE (narco @ Mar 2 2008, 01:58 PM)

The title is confusing and misleading. I can't see even the slightest hint regarding gold here.

RB why can't you just admit that you're wrong. All this time that you're been waiting for the dollar to bounce back (as if) you must have lost a sh1t load of your savings. Just admit defeat and buy some Gold

homeless

Mar 2 2008, 03:26 PM

coca cola has been a poor investment for years now.

They missed out on the mineral water boom, by bottling tap water, then abandoning the product alltogether when word got out.

They also missed out on the energy drinks market many other companies are ahead of them in sales

in the last 5-10 years all sales growth has been in water and energy drinks, coca cola sales have continued to decline.

the future for coca cola looks even worse, schools are banning fizzy drinks from there canteens and replacing with fruit juice ect, even there biggest market california has banned all schools selling fizzy drinks.

just like mcdonalds they marketed and saturated there own products to the point they just aint cool anymore.Can only see them going down even more, no matter how many shares warren buffet holds.

forgot to add the starbucks craze too must have hit them

narco

Mar 2 2008, 03:26 PM

As Jim Rogers put it finely last week "The dollar is a terribly flawed currency"

I agree. The only potential bouce I can see on the horizon is of the dead cat variety.

Fishfinger

Mar 2 2008, 03:59 PM

QUOTE (Realistbear @ Mar 2 2008, 01:47 PM)

http://uk.biz.yahoo.com/01032008/325/buffe...id-profits.html

I think Warren is, as usual, right. Solid Multinationals and stay away from anything* that has bloated in price recently.

I am seriously considering a move into Honeywell stock and dabbling in the energy sector generally.

_______________

* Anything.

Right that's it - everything into Citigroup. Nice big multinational and it's share price is not bloated.

marceau

Mar 2 2008, 04:27 PM

Buffett has an unimaginable amount of worthless paper dollars. He knows that the dollar will keep depreciating, in fact he has publicly stated so on a number of occasions. What he is doing here is diversifying out of the dollar to preserve capital. Berkshire Hathaway will take the pain for a time, while US equities continue to fall in value, but the negative prospects will enable him to stake build without rapidly inflating share prices. Eventually, the quality companies will come good (many years before they bottom yet though, DOW fans) and he will have built a commanding position for the next run up.

People like Buffett have such huge cash piles that they are forced to operate by a completely different set of rules to 99% of investors. His strategy here is one step back, two steps forward and takes advantage of inevitable declines to avoid the usual distortion to the market his investments make. The average investor will be unable to cope with the medium term pain that Berkshire Hathaway will take on equities in order to make a long term profit and escape the effects of a nosediving dollar.

This news is:

1. Massively dollar negative.

2. As stated above, completely unrelated to gold (unless Buffett wants to buy mining stocks, in which case it's gold positive).

Realistbear

Mar 2 2008, 04:39 PM

QUOTE (narco @ Mar 2 2008, 01:58 PM)

The title is confusing and misleading. I can't see even the slightest hint regarding gold here.

Warren's silence on gold may be speaking volumes.

Buffett emphasized the non-productive aspect of gold in 1998 at Harvard: "It gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."

http://en.wikipedia.org/wiki/Warren_Buffett

tinecu

Mar 2 2008, 04:47 PM

QUOTE (Realistbear @ Mar 2 2008, 02:02 PM)

I agree the SMs will continue to tank as confidence has futher to ebb. However commodities are a now opportunity to taste the savage inflationary wave that will spread far and wide and, some time soonish, ignite a massive rebound in stocks.

Buffets calls it too soon....there's more bad news to come.

The Masked Tulip

Mar 2 2008, 05:01 PM

Honey? Bear? Goldilocks? I claim my prize!

ianbe

Mar 2 2008, 05:10 PM

QUOTE (Realistbear @ Mar 2 2008, 04:39 PM)

Warren's silence on gold may be speaking volumes.

You really must be close to running out of straws by now.

My cat coughed up a furball this morning. I think this speaks volumes about gold too.

lowrentyieldmakessense(honest!)

Mar 2 2008, 05:20 PM

QUOTE (Errol @ Mar 2 2008, 03:10 PM)

Gold is not bloated in price so I'm not clear where the relevance of this article lies. Lets talk about bloated prices again when it gets to $5000 per ounce.

$5000 may or may not be bloated - all depends on how much money they have printed

narco

Mar 2 2008, 05:34 PM

QUOTE (lowrentyieldmakessense(honest @ Mar 2 2008, 05:20 PM)

$5000 may or may not be bloated - all depends on how much money they have printed

Correct.

IF the pound and dollar completely collapses, gold goes to infinity in terms of nominal price.

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