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Billionaires Dumping Stocks

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A 90% drop in equities _is_ mental.

If that happened we wouldn't recognise society. A 90% drop in equities would be the last thing you'd worry about.

If they did drop 90% with all other factors remaining the same it would represent a great buying opportunity - 40% divi yield! :D

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A 90% drop in equities _is_ mental.

If that happened we wouldn't recognise society. A 90% drop in equities would be the last thing you'd worry about.

Indeed.. and the article is full of exaggeration - for example, Berkshire simply rotate stocks from PG etc into something else, such as healthcare, TV Media.

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The article is a leader on to something else for you to buy (a book or news letter, or a moneyweek subscription or wot not). Warren Buffet doesn't expect equities to crash 90%, he didn't sell for that reason.

Edited by out2lunch

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A 90% drop in equities _is_ mental.

If that happened we wouldn't recognise society. A 90% drop in equities would be the last thing you'd worry about.

One of the reasons I'm happy to invested in equities. If I ever lost 90%, I'd probably be more worried about fighting off the cannibal chav army trying to steal my beans.

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The article is a leader on to something else for you to buy (a book or news letter, or a moneyweek subscription or wot not). Warren Buffet doesn't expect equities to crash 90%, he didn't sell for that reason.

Have you got a link to Warren Buffet selling shares?

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Have you got a link to Warren Buffet selling shares?

We need the latest 13F SEC filing. As there is no link to it from that article, and there are usually other articles on the latest 13F SEC filing from the other media houses (Reuters, WSJ, FT etc) they maybe using older information.

Red flags were raised when you click on the videos and you get some hard sell to buy something from another website.

I have found another article 3 days old on John Paulsons 13F SEC filing with 5 stock picks which contradicts the OP article. Sure we hear the reporter say they disposed of some stocks, but do we get the full story?

http://www.marketwatch.com/story/john-paulsons-5-new-stock-picks-2013-06-11

Edited by out2lunch

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The latest SEC filing I can find from the SEC is from March 2013. Someone has created a website with the top investors portfolios and link to the latest SEC filings. If he has sold anything, the reason be, it won't be because stocks are going to fall 90%.

http://relationalstocks.com/instshow.php?op=port&id=1

Maybe one could create a screen shot of it, and compare with the next SEC filing so you get a full picture rather than a narrow view that has been tinted by someone else.

Edited by out2lunch

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Well equities may "crash" 90% but over what timescale. Without a time scale its meaningless.

Also they WON'T crash in a straight line. You won't see a share chart with a straight line downwards. When have you ever seen that? Even on a 1 minute share chart. The loss will be traded over a period of time.

You regularly get predictions like this on the media which only deals in extremes, because its newsworthy or to sell something. For example EURUSD will crash to parity to the $, well it might but it will take a considerable time to get there.

For example a pundit on CNBC this afternoon was saying this afternoon they were looking at the 92.54 area for Dollar/Yen (as it has a strong/support area at that level) and that is a comment I can agree on as I can see it on the charts myself and its an achievable target.

To think Warren Buffet believes this crap isn''t realistic. When it comes to trading you have to put aside these ludicrous fantasies.

Anyway I thought the bond bubble was about to burst and equities were still historically cheap?

Edited by Secure Tenant

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Circuit breakers.

Circuit breakers will prevent the market price quickly falling by 90%, but it won't prevent the price falling, per-se.

For most large corporates (I strongly suspect) such a drop in share price would alter their credit score - which, in turn would affect their cost of borrowing... which, in turn would likely render them bankrupt. I am confident that banks would step in, assisted by central banks, underwritten by governments, before that happened.

30-40%, however... That's entirely possible - IMHO. During the 1930s, the US market was up-and-down by ~50% 'like-a-yo-yo' - and I expect equity markets this decade to behave similarly. In the 1930s, the peeks were (approximately) the pre-crash market levels - which, once reached, were quickly followed by sharply falling prices... until after WWII, when a new economic environment was established. I see no reason that we should not expect comparable volatility now - until the global economy, in our age, finds a new credible basis for optimism.

Edited by A.steve

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If that happened we wouldn't recognise society. A 90% drop in equities would be the last thing you'd worry about.

Are you sure about that? The Nikkei fell by over 80% from its peak, and that did not cause Japan to cease to exist. You might argue it was less in dollar terms and it happened over a long period, but then exactly where between 80 and 90 percent is the critical point?

Speaking of which. If interest rates can fall by a factor of 10, could they also rise by a factor of 10?

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If I were looking for modern day parallels to '87's global asset price booms (and subsequent busts, or if you prefer yield mean reversions), where super-easy credit super-heated asset values...

... I'd be looking square at the bond market rather than anything in the equities world, starting with G20 government debt.

Radical stuff*, I guess - what would I know.

(* ever ask yourself why the derivatives exchanges worldwide have been making out like bandits recently while the equities exchanges are more or less uniformly withering on the vine?)

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If I were looking for modern day parallels to '87's global asset price booms (and subsequent busts, or if you prefer yield mean reversions), where super-easy credit super-heated asset values...

... I'd be looking square at the bond market rather than anything in the equities world, starting with G20 government debt.

Radical stuff*, I guess - what would I know.

(* ever ask yourself why the derivatives exchanges worldwide have been making out like bandits recently while the equities exchanges are more or less uniformly withering on the vine?)

I'd agree with that, but for far less sophisticated reasons than you. Once again, I can't follow your post through my own ignorance :/

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So billionaires are selling all their shares and moving their money to where?

A post office savings account paying a quarter of a percent maybe?

Perhaps they are hoping to jump back in when share prices fall.

But from what I understand there are only two types of investors.

Those that Know they aren't any good at market timing.

And those that don't know they are no good at market timing.

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(* ever ask yourself why the derivatives exchanges worldwide have been making out like bandits recently while the equities exchanges are more or less uniformly withering on the vine?)

Because equity markets are now accessible to the masses, they're no longer sexy?

Because the latest financial engineering (like new houses or new cars) attract a sexiness premium from those with more money than sense?

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Are you sure about that? The Nikkei fell by over 80% from its peak, and that did not cause Japan to cease to exist. You might argue it was less in dollar terms and it happened over a long period, but then exactly where between 80 and 90 percent is the critical point?

Speaking of which. If interest rates can fall by a factor of 10, could they also rise by a factor of 10?

Fristly Nikkei is calculated in a different way compared to FTSE and S&P. It is more like Dow index

Secondly, Nasdaq too fell 80%, but again that was from a 100x+ PE

Thirdly, when Nikkei was at 40000, Japanese companies were traded at a PE of 80+ while today FTSE/S&P are on 10-15x

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A 90% drop in equities _is_ mental.

If that happened we wouldn't recognise society. A 90% drop in equities would be the last thing you'd worry about.

Japan is still a functioning society despite the Nikkei going from 40,000 to 7,000 at one point. Thats not far off a 90% drop.

Ask yourself, does the average person who actually would engage in civil disorder (ie the poor) have any wealth in the first place? Much less a stock market portfolio.

They have nothing to lose. Real wealth is the roads, the factories, the hospitals and so on. Not a bunch of twats in the city of london playing about with numbers.

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Wow. He sounds a smart cookie.

He probably also knew that 7,323 was a brick wall.

Every man and his dog (and probably his goldfish) can see there's the possibility of a nasty dislocation in the bond markets.

When 50x leverage meets rising volatility someone somewhere will have their ar%e handed to them. The only real question I think is who and how big.

Edited by R K

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Japan is still a functioning society despite the Nikkei going from 40,000 to 7,000 at one point. Thats not far off a 90% drop.

Ask yourself, does the average person who actually would engage in civil disorder (ie the poor) have any wealth in the first place? Much less a stock market portfolio.

They have nothing to lose. Real wealth is the roads, the factories, the hospitals and so on. Not a bunch of twats in the city of london playing about with numbers.

Yes and the companies owning those factories and assets are trading on sensible PEs just now. Not the PE of 80 at the Nikkei's high. So maybe not bad to buy.

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  • 242 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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