Just days after renewing his public criticism of Warren Buffett's current investment strategy and situation, the well-known short seller Doug Kass is out with a very bearish outlook for Berkshire Hathaway shares. And this time he's not just making a short-term prediction as he did last year when he bet against Berkshire's stock for several months and then covered that bet at a profit. Today on TheStreet.com, Kass asks, "Is This the End of Warren Buffett?" Based on reported Berkshire holdings as of September 30, and the stock moves since then, Kass estimates: Wells Fargo: $6.3 billion lost on 290 million shares American Express: $2.9 billion lost on 151 million shares Coca-Cola: $2.1 billion lost on 200 million shares Burlington Northern Santa Fe: $1.8 billion lost on 63 million shares ConocoPhillips: $1.5 billion lost on 60 million shares U.S. Bancorp: $1.5 billion on 73 million shares http://www.cnbc.com/id/28877530
I think this is very disturbing "Buffett's "refusal to sell," and "his apparent lack of recognition that investment moats no longer exist in some of his largest investments," especially banking." Hes still long moodys based on the rear view method of saying 'hey they have been around for so long' yet its pretty obvious the future will look nothing like the past, maybe rating agencies will be nationalized, maybe there will be 10 companies as the government forces competition but it seems a sure safe bet that moodys future isn't going to be all that great
Reuters (UK)-: The Treasury bond "bubble" bursting slowly The proximate cause for the selling in Treasuries stems from expectations that the government will need to borrow about $2 trillion of debt this year to finance its rescue packages for the battered banking sector. Already, outstanding Treasury debt stood at $5.5 trillion at the end of September. With this in mind, investors are fleeing Treasuries. In fact, while the Dow Jones industrial average .DJI is down 7.5 percent so far this year, the 30-year Treasury bond is down even more at 10 percent. This is contrary to the usual dynamic, where Treasuries move in the opposite direction of stocks. Over the last three weeks, investors have been selling U.S. Treasury bonds heavily, giving the 30-year Treasury bond's yield this week its biggest weekly jump since 2001, shortly after the September 11 attacks on the United States. http://uk.reuters.com/article/ousiv/idUKTRE50N0GF20090124
LOL!!! Why in the world would anyone think Doug Kass knows more about investing than Warren Buffett? Buffett was also supposed to have been washed up when he didn't buy into the dot.com bubble. This excerpt from Buffett's 1994 letter to shareholders is germane: "We will continue to ignore political and economic forecasts, which are an expensive distraction for many investors and businessmen. Thirty years ago, no one could have foreseen the huge expansion of the Vietnam War, wage and price controls, two oil shocks, the resignation of a president, the dissolution of the Soviet Union, a one-day drop in the Dow of 508 points, or treasury bill yields fluctuating between 2.8% and 17.4%. But, surprise - none of these blockbuster events made the slightest dent in Ben Graham's investment principles. Nor did they render unsound the negotiated purchases of fine businesses at sensible prices. Imagine the cost to us, then, if we had let a fear of unknowns cause us to defer or alter the deployment of capital. Indeed, we have usually made our best purchases when apprehensions about some macro event were at a peak. Fear is the foe of the faddist, but the friend of the fundamentalist. A different set of major shocks is sure to occur in the next 30 years. We will neither try to predict these nor to profit from them. If we can identify businesses similar to those we have purchased in the past, external surprises will have little effect on our long-term results⦠Stock prices will continue to fluctuate â sometimes sharply â and the economy will have its ups and down. Over time, however, we believe it is highly probable that the sort of businesses we own will continue to increase in value at a satisfactory rate."
The old duffer is well past his sell by date, notwithstanding all his past achievements, and if that isn't apparent to you, well you might as well be called cocktrad3r, increasenow or whatever the oxygen thieves on elitetrader go by these days. I think that the next leg down in the market might come from something trivial, like the old fella kicking the bucket. We'll see...
Using your logic, the guys at google should have never created their company because the richest man in the world (at the time) especially in software, would never let a search engine blossom... Buffett is not Jesus and no matter your devotion to him, Buffet can and does make mistakes.