warren averages down

Discussion in 'Forex' started by SethArb, May 2, 2004.

  1. how come this works for him and not for me :p

    from bloomberg wires

    -Billionaire investor Warren Buffett said he increased his bet against the U.S. dollar on concern that the country's trade deficit will weaken the currency.

    ``We think that over time that the dollar is likely to decline in value against some of the major currencies,'' said Buffett, 73, in an interview before Berkshire Hathaway Inc.'s annual shareholder meeting in Omaha, Nebraska. In the last few months, Berkshire has added ``more than a little bit'' to its foreign currency holdings, he said-
  2. fan27


    I believe Buffet has been short the dollar from much higher levels.
  3. that he is ahead if he sold USD last yr

    but this yr its not a winner
  4. Exactly.. he is on the right side of the trend and its a good long term bet.

    As our debt load increases the only way to pay back everything is by devaluing the dollar

    If we dont have the money to pay back our debt.. lets just print some more... eventually this game just blows up in our face.

  5. An investor averages down because he doesn't and can't do market timing but he can do so because he doesn't use leverage. A trader average up because short term probability is higher with this short term trend and as he uses leverage he can't go against short term probability. On average at long term the "intelligent" (discounting the lucky ones) investors win because they have much more capitalisation power than the rest. This is true also for firms: Insurance companies are investors whereas Banks are gamblers and that's why Insurance companies have been able to buy the banks.

  6. just21


    But on the other hand he is saying that inflation is increasing which will lead to higher interest rates and a stronger dollar. His message is not consistent.
  7. He's doing the right thing. Adding to a winner.
  8. jrs3


    Thats what I was thinking, rates are at historic lows, the Dollar
    is close to historic lows. Rates will go up that should attract
  9. Warren likes to talk up his positions, he might be worried that the dollar trend is changing.
  10. taigong


    Exactly. If I had Warren's wallet, I would also average down. Chances would be good that my solvency would withstand a substantial counter-trend move...:D
    #10     May 2, 2004