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Billionaires Dumping Stocks, Economist Knows Why
http://www.moneynews.com ^ | september 19, 2012

Posted on 09/19/2012 10:17:45 AM PDT by lowbridge

Despite the 6.5% stock market rally over the last three months, a handful of billionaires are quietly dumping their American stocks . . . and fast.

Warren Buffett, who has been a cheerleader for U.S. stocks for quite some time, is dumping shares at an alarming rate. He recently complained of “disappointing performance” in dyed-in-the-wool American companies like Johnson & Johnson, Procter & Gamble, and Kraft Foods.

In the latest filing for Buffett’s holding company Berkshire Hathaway, Buffett has been drastically reducing his exposure to stocks that depend on consumer purchasing habits. Berkshire sold roughly 19 million shares of Johnson & Johnson, and reduced his overall stake in “consumer product stocks” by 21%. Berkshire Hathaway also sold its entire stake in California-based computer parts supplier Intel.

With 70% of the U.S. economy dependent on consumer spending, Buffett’s apparent lack of faith in these companies’ future prospects is worrisome.

Unfortunately Buffett isn’t alone.

(Excerpt) Read more at moneynews.com ...


TOPICS: Business/Economy; News/Current Events
KEYWORDS: buffett; economy; stocks

1 posted on 09/19/2012 10:17:54 AM PDT by lowbridge
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To: lowbridge

So, why did Philip Morris International just raise its dividend(again) by more than 10.4%?

Fellow Freepers, Be careful of this kind of information from that website. No way to know if this is genuine data; and just ‘cause a “handful” of rich folk are selling stock, that doesn’t mean they’re correct in doing so.

Be very careful.

-Rex


2 posted on 09/19/2012 10:22:16 AM PDT by RexBeach
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To: lowbridge
and Kraft Foods.

Why? Boxed Mac and Cheese sales are gonna skyrocket if Obummer gets a second term.


3 posted on 09/19/2012 10:23:06 AM PDT by Buckeye McFrog
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To: lowbridge

Wall St has been kept inflated by the Fed printing trainloads of paper money and delivering the pallets of dough to the market players.

Could be that the billionaires are sensing that once Willard is president, he’ll stop the printing presses.

Once the gas bottles are empty, the hot air balloon will lose altitude.


4 posted on 09/19/2012 10:24:33 AM PDT by lurk
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To: Buckeye McFrog

“Why? Boxed Mac and Cheese sales are gonna skyrocket if Obummer gets a second term. “

Before or after he takes them over?


5 posted on 09/19/2012 10:25:03 AM PDT by jessduntno ("Socialism only works...in Heaven where they don't need it and hell where they have it." - RR)
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To: lowbridge
How much is to pay taxes at the current capital gains rate rather than risk a higher one under either Obama or Romney?
6 posted on 09/19/2012 10:27:27 AM PDT by KarlInOhio ("Government is the only thing that we all belong to"=implicit repeal of the 13th amendment for all.)
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To: RexBeach
So, why did Philip Morris International just raise its dividend(again) by more than 10.4%?

I don't know what's going on - but I do know that food and tobacco companies do just fine in a depression.

7 posted on 09/19/2012 10:28:26 AM PDT by GOPJ (first they came for those clinging to their guns and religion, and I did not speak out....)
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To: GOPJ

So do a lot of other companies, and their price action today is quite good. Some of those are owned by Mr. Buffett. He might be lightening positions in some stocks and adding to others, but he doesn’t trade five-minute trends. :)


8 posted on 09/19/2012 10:35:19 AM PDT by RexBeach
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To: lowbridge

Keep in mind that many US consumer products companys have substantial foreign earnings. With the Fed running the printing presses, the dollar has risen over 7% against the EURO, meaning that foreign earnings bring in fewer dollars when they are re-patriated.


9 posted on 09/19/2012 10:41:45 AM PDT by In Maryland (Our rights come from nature and God, not government. - Paul Ryan)
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To: lowbridge
Fellow Freepers, Be careful of this kind of information from that website. No way to know if this is genuine data; and just ‘cause a “handful” of rich folk are selling stock, that doesn’t mean they’re correct in doing so.

I certainly wouldn't take anything Warren Buffett says at face value. I wouldn't trust that guy as far as I could throw him.

10 posted on 09/19/2012 10:43:55 AM PDT by Steely Tom (If the Constitution can be a living document, I guess a corporation can be a person.)
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To: lowbridge

But, but, but.....when the Oracle of Omaha pops in to smooze with Becky Quick on CNBC’s “Squawk Box,” he always puts in a good word for The Boy President. Just like a Democrat to be secretly ditching the phony stock market while talking up the “improving economy.”


11 posted on 09/19/2012 10:53:47 AM PDT by txrefugee
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To: lowbridge

Call me when Buffet starts buying large quantities of T-bills.


12 posted on 09/19/2012 10:55:45 AM PDT by Obadiah (The Hunger Games -- Obama's vision for America)
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To: lowbridge

Taxes on dividend stocks are going to go up, and by a lot, since Obama is going to pass on Taxaggedon. That could be it too.


13 posted on 09/19/2012 11:12:29 AM PDT by RinaseaofDs (Does beheading qualify as 'breaking my back', in the Jeffersonian sense of the expression?)
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To: RexBeach
So, why did Philip Morris International just raise its dividend(again) by more than 10.4%?

They have to pay extra to get people to overlook their reputation.

14 posted on 09/19/2012 11:13:14 AM PDT by wideminded
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To: wideminded

Nice try. :)


15 posted on 09/19/2012 11:38:04 AM PDT by RexBeach
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To: lowbridge

That type of rotation out of sectors is normal for Buffet.

What did he buy? I bet he’s not just sitting on a pile of cash, he’s still mostly invested in stocks.


16 posted on 09/19/2012 11:45:22 AM PDT by SaxxonWoods (....The days are long, but the years are short.....)
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To: RexBeach
Sometimes companies raise their dividends to hold onto investors who might otherwise sell. That might portend a downturn in price.

On the other hand, Buffett might be getting out of consumer stocks because he sees a better opportunity in value stocks. This column doesn't say where he put the money he liquidated.

17 posted on 09/19/2012 12:07:56 PM PDT by what's up
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To: what's up

PM is making a lot of money. It has raised its dividend repeatedly since being spun off several years ago.


18 posted on 09/19/2012 12:12:56 PM PDT by RexBeach
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To: lowbridge

This article and teh interview are CRAP.

Buffett is liquidating P&G, JNJ and KFT because they vastly UNDERPERFORMED not only the market but OTHER consumer staple stocks. Not because of the markets. He mentioned he is disappointed with the frequency of JNJ’s manufacturing problems. Meanwhile he is also buying other positions and is hinting at another Burlington-sized acquisition. Buffett NEVER makes decisions based on his market outlook, BECAUSE HE HAS NO MARKET OUTLOOK, and never has had one.

Paulson is liquidating because he has suffered major redemptions!! His record since his sub-prime score has been DISMAL!! His hedge fund was DOWN 40% last year.

Soros? Who cares what that guy thinks?


19 posted on 09/19/2012 1:16:32 PM PDT by LRoggy (Peter's Son's Business)
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To: lowbridge

US stocks are fake! Chinese stocks are fake! They’re all fake! It’s the end of the world! Buy gold! Oil was even talked down! What’s wrong with everybody? Why aren’t stocks tanking? If the dollar doesn’t go up, there won’t be any loans from Asia for more shipments of goodies!

[Little irony and pretended mania there. Political speech is crazy. Sponsored propaganda from our economic pilots is also nutty. Truth is, we need to start manufacturing things here. Until then, we’ll see a decreasing dollar with increasing craziness. Invest in lunacy. That’s it.]


20 posted on 09/19/2012 1:24:34 PM PDT by familyop ("Wanna cigarette? You're never too young to start." --Deacon, "Waterworld")
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To: lowbridge

The market’s up, BTW. Apparently, not many others are listening to “progressive” Buffet.


21 posted on 09/19/2012 1:30:12 PM PDT by familyop ("Wanna cigarette? You're never too young to start." --Deacon, "Waterworld")
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To: lowbridge

Johnson & Johnson, Procter & Gamble, and Kraft Foods are all socialist owned/controlled companies too. Buffet is turning on his friends.

All of this QE crap is to enable these billionaires to get out of the market.


22 posted on 09/19/2012 1:38:30 PM PDT by editor-surveyor (Freepers: Not as smart as I'd hoped they'd be)
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To: RexBeach

Hey Rex, the big guys are getting out because the markets have no bottom, and the purpose of QE is to help them get out.


23 posted on 09/19/2012 1:40:51 PM PDT by editor-surveyor (Freepers: Not as smart as I'd hoped they'd be)
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To: familyop

>> “Why aren’t stocks tanking?” <<

.
Because experienced investors know that QE3 will drive up prices, and they foolishly believe that they’ll be able to discern the end before it comes.


24 posted on 09/19/2012 1:44:01 PM PDT by editor-surveyor (Freepers: Not as smart as I'd hoped they'd be)
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To: In Maryland

“...With the Fed running the printing presses, the dollar has risen over 7% against the EURO...”

Um. Huh?


25 posted on 09/19/2012 1:44:34 PM PDT by Born to Conserve
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To: editor-surveyor
"Because experienced investors know that QE3 will drive up prices, and they foolishly believe that they’ll be able to discern the end before it comes."

Very well said and true. I wonder how many investors know that we've passed the point of a chance of correction without a general collapse. Either collapse now or collapse later. That's why China's been hording mountains of commodities (useful things). Currency without useful things to trade is only a concept made of paper or electrons.


26 posted on 09/19/2012 2:34:34 PM PDT by familyop ("Wanna cigarette? You're never too young to start." --Deacon, "Waterworld")
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To: Buckeye McFrog
Why? Boxed Mac and Cheese sales are gonna skyrocket if Obummer gets a second term.

In his second term, he'll make them leave out the cheese.

27 posted on 09/19/2012 2:37:48 PM PDT by tacticalogic ("Oh, bother!" said Pooh, as he chambered his last round.)
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To: tacticalogic

Michelle will insist on lo cal hi fiber soy noodles that will make you want to eat the box.


28 posted on 09/19/2012 2:45:31 PM PDT by Tuanedge
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To: Born to Conserve
My bad - the price of the Euro in USD has risen from 1.20 to 1.32. The dollar has FALLEN.

My apologies ...

29 posted on 09/19/2012 3:18:10 PM PDT by In Maryland (Our rights come from nature and God, not government. - Paul Ryan)
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To: RexBeach
He might be lightening positions in some stocks and adding to others, but he doesn’t trade five-minute trends. :)

You're right Rex - five minute trades are not his style...

30 posted on 09/19/2012 8:10:32 PM PDT by GOPJ (first they came for those clinging to their guns and religion, and I did not speak out....)
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