***Official*** 2011 Stock Market Thread

[dullard]

I can't fathom why people think jumping in now is a good thing. If the market goes down again today what did you accomplish by getting back in?

I'll wait out until it looks likes it coming back around for a good awhile. Even if I miss the bottom so be it.

There is nothing wrong with getting back in. Take a 15% gain in about a week and call it good. It is NEVER wrong to take a profit (sell high and buy back in low). Even if you miss the bottom, you still profitted.

That said, usually it isn't good to catch a falling knife. This however, seems more like a bouncing knife to me. I caught it yesterday right at the end (I buy mutual funds generally which are priced at the end of the day). I think things will be temporarilly up today. I may be out tomorrow again though depending on how things look.

 

[lothar]

Good thinking, because it earned you money, but screwed 90% of the American population by increasing the cost of living and put our debt in danger of higher interest rates which would strain the tax payer, we should do it....because it made you money.

You will come out short in the long run because of QE because it only harms the US economy. Keynesian does not work.

Yes. At the end of the day, I only care about me, my family, and friends. Nothing wrong with that.

AFAIK, quantitative easing didn't increase our debt. If anything, it has reduced it by keeping interest rates artificially low.
You may want to learn the difference between the FED and the politicians in Washington that continue to spend money they don't have like drunken sailors and don't know how to balance a budget through simple addition and subtraction.

I have yet to come up short. We shall see...
So far all the hyper-inflation fears of Quantitative Easing has largely been beaten to a pulp. Deflation is more likely to happen than hyper-inflation.

 

[rcpratt]

Pretty solid bounce so far.

 

[lothar]

thanks guys. seems now is a good time to buy in general and i think i'll buy some more BRK-B today.

Berkshire will survive the crisis.

However, I've mostly stopped buying conglomerates years ago.
Instead of investing in conglomerates themselves, I like to invest in specific securities those conglomerates hold instead.

 

[Imp]

Buffett's approach to investing is very simple. He's not like a talented stock trader or hedge fund investor. Buffett can and will find a competent replacement because he's talents can be duplicated. Buffett's true talent has been his consistent application of his talents, something few people can continue to do for 50 years as he has.

It's people like you who will make BRK an excellent buy the day Buffett ceases to control BRK and the stock falls hard.

Also, I can assure you, Buffett is in full control of that company and goes to work every day.

Fair enough. I'm sure it's a solid company, and will continue to be so, just like dozens of other successful banking/investment firms out there. But having the "god of investing" as head of your company must have some premium attached to it. Kind of like having Steve Jobs at Apple, even though much of the innovation does come from within and is nurtured by the corporate culture. Having said that, yeah, if it gets a hit when there's signs of "trouble" at the top, I'll definitely take a look.

Edit: Woops. Should clarify that for "the only thing it had going for it" was concerning the premium it held over other banks/ investment firms concerning Mr. Buffet.

You go ahead and bring a shareholder vote to the table. Buffett vs. "X"
Warren Buffett alone controls 34% of the voting power at Berkshire Hathaway.
This doesn't include shares owned by Charlie Munger or Bill Gates and his foundation.
You go ahead and keep spreading these myths.

David Sokol never has been(and never will be) considered his apparent successor.
Only Barron's believed that.

What shareholder vote, the hell?

All I meant was that the guy is 80. He looks to be in good shape, but at 80, things happen and fast. See apparent premium pricing above.

From what I've read, David Sokol wasn't low level, and in the eyes of some, took advantage of the company and Mr. Buffet. Regardless, it's not good for confidence, even if it was an isolated incident.

 

[lothar]

Fair enough. I'm sure it's a solid company, and will continue to be so, just like dozens of other successful banking/investment firms out there. But having the "god of investing" as head of your company must have some premium attached to it. Kind of like having Steve Jobs at Apple, even though much of the innovation does come from within and is nurtured by the corporate culture. Having said that, yeah, if it gets a hit when there's signs of "trouble" at the top, I'll definitely take a look.

Edit: Woops. Should clarify that for "the only thing it had going for it" was concerning the premium it held over other banks/ investment firms concerning Mr. Buffet.



What shareholder vote, the hell?

All I meant was that the guy is 80. He looks to be in good shape, but at 80, things happen and fast. See apparent premium pricing above.

From what I've read, David Sokol wasn't low level, and in the eyes of some, took advantage of the company and Mr. Buffet. Regardless, it's not good for confidence, even if it was an isolated incident.

Surprisingly, that premium is lower than historical measures.
P/B of Berkshire is ~1. Historically it as been 1.7-2+.
Berkshire has the same P/B value of 1 it's own industry has, and it's lower than the S&P 500.
You can view all this at M* and many other places.
http://financials.morningstar.com/valuation/price-ratio.html?t=BRK.A&region=USA&culture=en-us
Buffett premium not found?
The stock is up 4% today.

David Sokol definitely wasn't low level, but he also was never the "heir apparent".
Those are two different things.
He was one of the 4 candidates, but when I think of "heir apparent", I think it's one person, not selecting from a group of 4 people. If there was a heir apparent, there wouldn't be 4 candidates to choose from.
Ex: Prince Charles is the heir apparent to the British Monarchy which is 100% a sure thing unless he decides to sell his birth right.
Can't say the same about David Sokol or any other Berkshire executive for that matter since there are still 3 people to pick from.

I agree generally and hope David Sokol gets taken to court for what he did.

 

[Imp]

Surprisingly, that premium is lower than historical measures.
P/B of Berkshire is ~1. Historically it as been 1.7-2+.
Berkshire has the same P/B value of 1 it's own industry has, and it's lower than the S&P 500.
You can view all this at M* and many other places.
http://financials.morningstar.com/valuation/price-ratio.html?t=BRK.A&region=USA&culture=en-us
Buffett premium not found?
The stock is up 4% today.

David Sokol definitely wasn't low level, but he also was never the "heir apparent".
Those are two different things.
He was one of the 4 candidates, but when I think of "heir apparent", I think it's one person, not selecting from a group of 4 people. If there was a heir apparent, there wouldn't be 4 candidates to choose from.
Ex: Prince Charles is the heir apparent to the British Monarchy which is 100% a sure thing unless he decides to sell his birth right.
Can't say the same about David Sokol or any other Berkshire executive for that matter since there are still 3 people to pick from.

I agree generally and hope David Sokol gets taken to court for what he did.

Maybe there is, or isn't a premium. We won't know until he does either kick the bucket (god forbid), or decides to go into full retirement. It'll probably recover over time if there is an initial shock though. The stock is pretty stable though, and would probably make a long-term hold.

But really, am I reading this right? Neither BRKA and BRKB pay dividends?

 

[lothar]

Maybe there is, or isn't a premium. We won't know until he does either kick the bucket (god forbid), or decides to go into full retirement. It'll probably recover over time if there is an initial shock though. The stock is pretty stable though, and would probably make a long-term hold.

But really, am I reading this right? Neither BRKA and BRKB pay dividends?

That is correct.
However I have a feeling the board could decide to start doing that in the future which would minimize the amount of money his successor has to play with.
Berkshire is currently sitting on $47.9 billion in cash, which is 28% of their market cap.

 

[rcpratt]

Whoops, there goes the gains.

 

[Imp]

DOW just took a -150 drop. That's not counting the +200 it made today.

 

[Engineer]

Closes up 400+. Wow....crazy swings!

 

[PeeluckyDuckee]

What a day to end the day, Dow up into the 400s again, that's from a -150, strong strong bounce. Nice to see not just green, but big green.

Glad I averaged down yesterday.

 

[Imp]

What the F*** was that in the last hour? I made 10% after buying at around 2:45pm (DOW was around -130 then)!

Too bad I put so little in.

 

[hiromizu]

Sorry guys for the crazy swings, I just had to buy the fuckin dip.

 

[snoopdoug1]

this is crazy.

 

[thegimp03]

Who thinks it's going to dump again tomorrow?

 

[rcpratt]

Glad F finally bounced big.

 

[manly]

Who thinks it's going to dump again tomorrow?

considering stagnant GDP growth and the Euroland problems, my guess is a bear market for the rest of summer.

 

[FelixDeCat]

This was a dead cat bounce. We will retest the lows because nothing chages the fact America is a money losing operation as an entity and can only survive by issuing more debt.

We will go below 10,000 before the end of the year. Sorry. :'(

 

[Acanthus]

This was a dead cat bounce. We will retest the lows because nothing chages the fact America is a money losing operation as an entity and can only survive by issuing more debt.

We will go below 10,000 before the end of the year. Sorry. :'(

I honestly think that it belongs around 8000.

Look at the P/E's, they are retarded right now for this economic climate.

It's okay though, we can keep the numbers going up artificially with our 31st century federal reserve keeping rates near 0% for 5 straight years.

That hasn't caused any problems in the past.

 

[Engineer]

I honestly think that it belongs around 8000.

Look at the P/E's, they are retarded right now for this economic climate.

It's okay though, we can keep the numbers going up artificially with our 31st century federal reserve keeping rates near 0% for 5 straight years.

That hasn't caused any problems in the past.

S&P 500 PE ratio is lowest it has been in 21 years.

Profits at an all time high.

Companies sitting on a record 2.5 TRILLION in cash.

:hmm:

 

[FelixDeCat]

I honestly think that it belongs around 8000.

Look at the P/E's, they are retarded right now for this economic climate.

It's okay though, we can keep the numbers going up artificially with our 31st century federal reserve keeping rates near 0% for 5 straight years.

That hasn't caused any problems in the past.

An artificially low interest rate environment just leads to irresponsible lending and borrowing as demonstrated in the housing bust. Not to mention wreckless levels of federal borrowing due to mismanagement from Washington.

Back in the day, the Fed cracked the whip and always did the right thing. I was in banking from 1990 until 2008 and Ive seen tightening and easing of rates frequently. My job was to change borrowers rates so I followed many varieties of rate indexes for almost 20 years.

Then the Fed bowed to policital pressure to keep rates permanently low which ultimately came from its whiny constituency.

If rates had skyrocketed like they should have, the interest on the national debt would have been so prohibitive it would have made Washington be more responsible with piling on even more debt chasing a wreckless policy of "growth at all costs".

 

[IcePickFreak]

So this is were all the non-productive people of ATOT hang out.

 

[jessieqwert]

So this is were all the non-productive people of ATOT hang out.

Yep all those fools that like to waste time and make money. We should be over in P&N where the productivity is highest.

It's been a while since I checked it but IMAX is near a record low. I'm going long tomorrow.

 

[IHateMyJob2004]

That is correct.
However I have a feeling the board could decide to start doing that in the future which would minimize the amount of money his successor has to play with.
Berkshire is currently sitting on $47.9 billion in cash, which is 28% of their market cap.

Blanket statement on that is that a dividend will start when Berkshire can no longer find ways to increase shareholder value at an acceptable rate. Basically, when an investor is better off in an index fund or in low risk bonds, a dividend will start. I don't see that happening any time soon and I also see BRK as the first $1B market cap because of this.