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Billionaires Dumping Stocks, Economist Knows Why
newsmax ^ | 2-26-2015

Posted on 02/26/2015 12:18:13 PM PST by Citizen Zed

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.

Buffett’s holding company, Berkshire Hathaway, 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 its 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. Paulson’s hedge fund, Paulson & Co., dumped 14 million shares of JPMorgan Chase according to a recent filing. The fund also dumped its entire position in discount retailer Family Dollar and consumer-goods maker Sara Lee.

Finally, billionaire George Soros has 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?

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


TOPICS: Business/Economy; Chit/Chat
KEYWORDS: bankstocks; bhoeconomy; billionaires; bonds; buffett; djia; economy; johnpaulson; jpmorgan; soros; stockmarket; stocks
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Me thinks they are establishing cash positions to buy after the next panic.
1 posted on 02/26/2015 12:18:13 PM PST by Citizen Zed
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To: Citizen Zed

I tend to agree. We are only one event away from a market reversal. All it takes is one black swan and the whole thing will fall like the house of cards it is.


2 posted on 02/26/2015 12:20:58 PM PST by Starboard
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To: Citizen Zed

Meh, it’s obvious. The market is like a slow moving sine wave. Guess what? It’s at another zenith. It will crash to another low and then do it all again - until the “BIG” crash. But whenever markets hit highs in this particular economic climate, it’s a HUGE signal to get the hell out.


3 posted on 02/26/2015 12:21:04 PM PST by cuban leaf (The US will not survive the obama presidency. The world may not either.)
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To: Citizen Zed

Has the genius of Omaha = UP sold his BNSF holdings?


4 posted on 02/26/2015 12:21:25 PM PST by Paladin2
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To: cuban leaf

If I were a Billionaire and wanted to “Buy” stocks, I’d do my best to tell everyone that I was “Selling”.


5 posted on 02/26/2015 12:25:00 PM PST by Zeneta (Thoughts in time and out of season.)
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To: Citizen Zed

But low, sell high. Stocks are high right now. They will buy them back after they create a panic by selling them off.

That’s how they became billionaires.


6 posted on 02/26/2015 12:25:03 PM PST by P-Marlowe (Saying that ISIL is not Islamic is like saying Obama is not an Idiot.)
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To: Paladin2

He bought the whole damn thing, not just stocks.


7 posted on 02/26/2015 12:28:31 PM PST by biff (Et Tu Boeh-ner)
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To: biff

Why not buy UP too?


8 posted on 02/26/2015 12:31:50 PM PST by Paladin2
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To: Zeneta

Well, there is “telling everyone” and there is doing it and everyone finds out.


9 posted on 02/26/2015 12:32:23 PM PST by cuban leaf (The US will not survive the obama presidency. The world may not either.)
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To: Citizen Zed
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.

“These funds haven’t made it into the markets and the economy yet. But it is a mathematical certainty that once the dam breaks, and this money passes through the reserves and hits the markets, inflation will surge,” said Wiedemer.

The Fed isn't printing money to stimulate the economy. They are printing it to monetize the debt, paying it down with made up money so people will keep buying bonds. That money will never make it to the market.

10 posted on 02/26/2015 12:32:46 PM PST by Hugin ("Do yourself a favor--first thing, get a firearm!")
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To: Citizen Zed

THE SKY IS FALLING!

not really.

methinks/knows this is so 2012, as on/around August 14. Just check out when BH filed the 13-F for the Intel sale....


11 posted on 02/26/2015 12:33:42 PM PST by SakoL61R
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To: Citizen Zed
John Paulson's fund went down 36% in 2014. He might have been raising cash to meet redemptions from investors who want their cash back.

Buffett may be getting out of consumer staples because those particular stocks are getting too expensive. JNJ recently not only hit a 52-week high - it hit an all-time high. Consumer staples are a safe haven. People buy toothpaste and band aids regardless of the economy. That he's getting out may indicate that he believes the worst is over, and it's take to take on more risk. Perhaps he'll begin buying more consumer cyclicals like automotive and retail stocks.

12 posted on 02/26/2015 12:35:03 PM PST by Zhang Fei (Let us pray that peace be now restored to the world and that God will preserve it always.)
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To: Citizen Zed
"The fund also dumped its entire position in discount retailer Family Dollar and consumer-goods maker Sara Lee."

Such products can be made at home for less.


13 posted on 02/26/2015 12:35:12 PM PST by familyop (We Baby Boomers are croaking in an avalanche of corruption smelled around the planet.)
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To: SakoL61R

J.P. Morgan said it best:

“Stocks will fluctuate.”


14 posted on 02/26/2015 12:36:13 PM PST by Trapped Behind Enemy Lines
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To: Citizen Zed

As of the last SEC filings, over 60% of Berkshire Hathaway’s portfolio is in four stocks, Wells Fargo, Coca Cola, IBM, and American Express. The majority of the other stocks comprise less than 1% of the portfolio.


15 posted on 02/26/2015 12:36:31 PM PST by Bubba Ho-Tep
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To: Trapped Behind Enemy Lines
J.P. Morgan said it best: “Stocks will fluctuate.”

Always liked her on The Gong Show.


16 posted on 02/26/2015 12:38:54 PM PST by dfwgator
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To: cuban leaf

The next decline, if it starts to look like 2008 again, may actually be the BIG crash.

There is not much left in the bag of tricks for the fed this time around and it is difficult for me to envision how the safety net could get bigger.


17 posted on 02/26/2015 12:39:33 PM PST by L,TOWM (Is it still too soon to start shooting?)
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To: Citizen Zed

The URL itself shows the article was from 8/29/2012. As it turns out, Paulson was way early in his decision to sell JPM. He sold in the mid to high 30’s. It’s now in the low 60’s.


18 posted on 02/26/2015 12:42:45 PM PST by Zhang Fei (Let us pray that peace be now restored to the world and that God will preserve it always.)
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To: Citizen Zed
This guy could well be correct in his prediction, but the "article" that is linked is pretty much an advertisement for some type of investment advisory publication.
19 posted on 02/26/2015 12:43:40 PM PST by Major Matt Mason ("Journalism is dead. All news is suspect." - Noamie)
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To: Citizen Zed

Well, somebody must be buying the stocks they’re selling, because the market is near record highs. I don’t think it’s poor people, either.


20 posted on 02/26/2015 12:44:40 PM PST by proxy_user
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