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.
Fellow billionaire John Paulson, who made a fortune betting on the subprime mortgage meltdown, is clearing out of U.S. stocks too. During the second quarter of the year, Paulson’s hedge fund, Paulson & Co., dumped 14 million shares of JPMorgan Chase. The fund also dumped its entire position in discount retailer Family Dollar and consumer-goods maker Sara Lee.
Finally, billionaire George Soros recently sold nearly all of his bank stocks, including shares of JPMorgan Chase, Citigroup, and Goldman Sachs. Between the three banks, Soros sold more than a million shares.
So why are these billionaires dumping their shares of U.S. companies?
After all, the stock market is still in the midst of its historic rally. Real estate prices have finally leveled off, and for the first time in five years are actually rising in many locations. And the unemployment rate seems to have stabilized.
It’s very likely that these professional investors are aware of specific research that points toward a massive market correction, as much as 90%.
One such person publishing this research is Robert Wiedemer, an esteemed economist and author of the New York Times best-selling book Aftershock.
Before you dismiss the possibility of a 90% drop in the stock market as unrealistic, consider Wiedemer’s credentials.
In 2006, Wiedemer and a team of economists accurately predicted the collapse of the U.S. housing market, equity markets, and consumer spending that almost sank the United States. They published their research in the book America’s Bubble Economy.
The book quickly grabbed headlines for its accuracy in predicting what many thought would never happen, and quickly established Wiedemer as a trusted voice.
A columnist at Dow Jones said the book was “one of those rare finds that not only predicted the subprime credit meltdown well in advance, it offered Main Street investors a winning strategy that helped avoid the forty percent losses that followed . . .”
The chief investment strategist at Standard & Poor’s said that Wiedemer’s track record “demands our attention.”
And finally, the former CFO of Goldman Sachs said Wiedemer’s “prescience in (his) first book lends credence to the new warnings. This book deserves our attention.”
In the interview for his latest blockbuster Aftershock, Wiedemer says the 90% drop in the stock market is “a worst-case scenario,” and the host quickly challenged this claim.
Wiedemer calmly laid out a clear explanation of why a large drop of some sort is a virtual certainty.
It starts with the reckless strategy of the Federal Reserve to print a massive amount of money out of thin air in an attempt to stimulate the economy.
And this is where Wiedemer explains why Buffett, Paulson, and Soros could be dumping U.S. stocks:
“Companies will be spending more money on borrowing costs than business expansion costs. That means lower profit margins, lower dividends, and less hiring. Plus, more layoffs.”
No investors, let alone billionaires, will want to own stocks with falling profit margins and shrinking dividends. So if that’s why Buffett, Paulson, and Soros are dumping stocks, they have decided to cash out early and leave Main Street investors holding the bag.
But Main Street investors don’t have to see their investment and retirement accounts decimated for the second time in five years.
Wiedemer’s video interview also contains a comprehensive blueprint for economic survival that’s really commanding global attention.
Now viewed over 40 million times, it was initially screened for a relatively small, private audience. But the overwhelming amount of feedback from viewers who felt the interview should be widely publicized came with consequences, as various online networks repeatedly shut it down and affiliates refused to house the content.
“People were sitting up and taking notice, and they begged us to make the interview public so they could easily share it,” said Newsmax Financial Publisher Aaron DeHoog.
“Our real concern,” DeHoog added, “is the effect even if only half of Wiedemer’s predictions come true.
“That’s a scary thought for sure. But we want the average American to be prepared, and that is why we will continue to push this video to as many outlets as we can. We want the word to spread.”
It's from Newsmax.com, you moron.
However, considering that I don't own any stocks, how can I possibly give a shit?
Stocks are for suckers. There's no difference between putting your money in the stock market, versus betting on red19 at the roulette table. No difference.
But kudos to the 1% who always know when to bet against America!
[quote]But kudos to the 1% who always know when to bet against America!
Patriotism is for Pussies!
1% ers, why do you hate America?
Mitt Romney and Republicans, why do you hate America?
Seriously, I'm stunned people still vote for the modern-day GOP. They are the most anti-American political party that ever existed.
OP, why do YOU hate america?
Right wing shill....
I don't think you have to be an economist to know why.
"It starts with the reckless strategy of the Federal Reserve to print a massive amount of money out of thin air in an attempt to stimulate the economy."
“Companies will be spending more money on borrowing costs than business expansion costs."
These two statements are inherently contradictory, because the Fed printing money means that companies (and private individuals) will be spending less, not more, in borrowing costs (i.e. interest).
So unless the quotes are a really bad cut-and-paste job, this "guru" knows less about economics than a community college dropout does.
Oh, and it's from Newsmax, so that's par for the course.
Warren Buffett isn't a market timer.
Ouch! The stupid! It hurts!
Gee, this reminds me of the endless "The Sky is Falling, Buy GOLD!" threads from a year or so ago.
How did that work out for all you doom and gloom types? Didn't I read where it's down to under $1500 an ounce?
Closer to $1400. Dropped $200 or $300 bucks yesterday. Nothing's a sure thing..
[quote]He recently complained of âdisappointing performanceâ in dyed-in-the-wool American companies like Johnson & Johnson, Procter & Gamble, and Kraft Foods.
For a man who lacks confidence in dyed in the wool American Companies, it strikes me as odd that he just bought Heinz last month (the entire company).
In fact, he's been rather open about the fact that he's selling stock to pay for Heinz. Kraft he's been selling since they bought Cadbury, since he thought that was a dumb move. That was 3 or 4 years ago.
I'm no Buffet cheerleader, but he generally takes great pains to explain what he's doing and why.
r13 that's what I was thinking. The person who bumped this thread has to be the same asshole who loves gold, which just dropped in value by a lot.
[quote]For a man who lacks confidence in dyed in the wool American Companies, it strikes me as odd that he just bought Heinz last month (the entire company).
Probably because at some point ketchup will be all Americans can afford to eat.
It is a vegetable, R17.
That "article" has been posted for well over a year.
It just drives traffic to Newsmax, you ninny.
I read an article a couple of months ago in a legit business news source (more legitimate than Newsmax anyway--might have been Bloomberg or Yahoo Business) that deep pockets investors were switching to commodities and leaving Wall Street to the middle-class suckers with mutual funds.
[quote] He recently complained of “disappointing performance” in dyed-in-the-wool American companies like Johnson & Johnson
Buffett was wrong about JNJ. He sold at $69-and-change, the lowest point in the past six-months and very nearly the lowest point in the past year. The stock closed at $83.44 today, ten-cents off its recent high -- the best in a decade.
[quote] According to Berkshire's 13-F filing with the SEC, the company held just over 492-thousand shares of J&J as of September 30. That's a 95 percent reduction from the 10.3 million shares it reported holding as of June 30. The market value of the remaining holdings is just $34 million, down $682 million.
Maybe if these fuck faces didn't horde all the cash consumers would have some to spend with.
Everyone knows the financial disaster "Can" was kicked down the road in 2008. Nobody really knows when the "Can" is going to explode. But everyone knows that day is coming.
[quote]Everyone knows the financial disaster "Can" was kicked down the road in 2008. Nobody really knows when the "Can" is going to explode. But everyone knows that day is coming.
"Quotation marks" can't keep it "bottled up" "forever."
You need to be watching what NY Billionaire Louis Moore Bacon is doing.
I have seen this before and this has been floating around the web for the last month or so. There is even a couple videos made by some guy, I can't remember if he is a stock broker or just a news man, that talks about this same thing. Someone is working hard to put this out there cause I am running into it more and more. Not clear what the reality is though.
I saw a link for the "original" article today. Dated 4/28/13 on Moneynew (i.e. Newsmax). Someone above posted it's been around for a year. The earliest copying of the Newsmax....um.....bs........is August 2012.
Has anyone found this on the net with an older posting date.
Anybody who thinks the Fed will allow a 90% drop in stocks doesn't know who controls the Fed.
I knew this shit looked familiar.
I always see a picture of the same old coot on various sites with the caption about billionaires selling off stock.
Laughing all the way to the bank.
He LOVES Only Gold, ONLY Gold, He Loves Goooooooollllllddddd!