Skip to comments.Billionaires Dumping Stocks, Economist Knows Why
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 Buffetts 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, Buffetts apparent lack of faith in these companies future prospects is worrisome.
Unfortunately Buffett isnt alone.
(Excerpt) Read more at moneynews.com ...
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.
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.
“Why? Boxed Mac and Cheese sales are gonna skyrocket if Obummer gets a second term. “
Before or after he takes them over?
I don't know what's going on - but I do know that food and tobacco companies do just fine in a depression.
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. :)
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.
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.
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.”
Call me when Buffet starts buying large quantities of T-bills.
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.
They have to pay extra to get people to overlook their reputation.
Nice try. :)
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.
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.
PM is making a lot of money. It has raised its dividend repeatedly since being spun off several years ago.
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?
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.]
The market’s up, BTW. Apparently, not many others are listening to “progressive” Buffet.
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.
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.
>> “Why arent 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.
“...With the Fed running the printing presses, the dollar has risen over 7% against the EURO...”
In his second term, he'll make them leave out the cheese.
Michelle will insist on lo cal hi fiber soy noodles that will make you want to eat the box.
My apologies ...
You're right Rex - five minute trades are not his style...