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Warren Buffett wants the world to know that it's time to get greedy right now

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Werner_1
Super Contributor
I know that most of the guys on this forum dont seem to follow Warren Buffett as they can do better than what he did, but for the guys that do respect his comments and views, he wrote an article in The New York Times... see link below for full article. Warren Buffett wants the world to know that it's time to get greedy right now, as fear sends stock prices plunging across the globe. Using the widely-read opinion pages of The New York Times, Buffett writes that he's been buying U.S. stocks for his personal account, picking up a "slice of America's future at a marked-down price."...http://www.cnbc.com/id/27230391?__source=RSS*blog*&par=RSS
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16 REPLIES 16
Wizard
Super Contributor
Long term strategy will always yield good results>>>for Buffet. That doesn't mean it's appropriate for short term traders. 5 day cricket can not be compared with the 20/20 game!
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Werner_1
Super Contributor
Obviously, but this was posted for the long term investors... there are some of them around...
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john_1
Super Contributor
The fear part I agree with...the just like the 20th centuary part I question...the key drivers of wealth creation of the 20th centuary. was the large spread expoltation of mineral and fosil fuel wealth and the advent of the computer. Ie infomation..And urbanization. (these are not facts just my opinion). So with all these cycles nearing competion..the "just like the 20th centuary" may be the mother of all assumptions and f##k ups
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Wizard
Super Contributor
Buffet also is a politician these days.He is the financial advisor of the Governor of California. People will listen to him! The Terminator was complaining recently of the economic situation in his state.
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Not applicable
For all you "Buffetites" who thinks he is only about buy-and-hold: Warren Buffett's Favorite Options Strategy Warren Buffett isn't known for his risky investments. Berkshire Hathaway's portfolio is filled with blue-chip value plays like General Electric (GE), Coca-Cola (KO), and Procter & Gamble (PG). So it may surprise you that Warren Buffett is one of, if not THE, single biggest individual options traders in the world. Just this week, Warren Buffett's Berkshire Hathaway disclosed that it has written put options on railroad stock Burlington Northern Santa Fe Corp. (BNI). Buffett is using this options strategy as a way to add to his shares of Burlington Northern. You may recall that Chris Rowe told Tycoon readers about this strategy in his article, "Profit from the Bailout Bloodbath". Chris pointed out that selling naked puts (or writing put options) is a great way to buy stock as well as collect a premium, especially in this market environment. If you missed his article, be sure to check it out. [Editor's Note: To learn more about trading options, go here to get Chris' free report, Options Made Simple.] Clearly, Buffett agrees. Buffett's Berkshire Hathaway has sold put options that will force it to purchase 3.26 million BNI shares between $77 and $80 a share. On Oct. 6, Berkshire wrote put options for 1.39 million shares of BNI at a premium of $7.02 per contract. The put option is exercisable until Dec. 9 at a strike price of $80. On Oct. 9, Berkshire wrote put options for 1.19 million shares at a premium of $7.03 per contract, and another for 761,111 shares at a premium of $5.78 per contract. The put options are again exercisable on Dec. 9 with a strike price of $80 for the 1.19 million shares and at $77 for the 761,111 shares. Buffett pocketed a premium of $22 million for writing the options contracts, which he can then put toward buying the shares that he very likely would have bought anyway. Buffett already owns more than 63.7 million shares of Burlington Northern, according to SEC filings. That's about an 18% stake in the railroad company. According to GuruFocus.com, Buffett bought shares of Burlington Northern at an average price of about $80 a share, which is, not surprisingly, the price that Buffett is targeting. As of Friday's close, BNI shares were trading at $80.16 a share. BNI shares hit a peak of $114.58 in June.
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Werner_1
Super Contributor
Thanks for the comment, yes, Buffett has many things going on, also had some currency trades now and then. This comment is going out of control again, it was intended to just let the guys that was interested know about his article in the NY Times.
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CrownA
Super Contributor
Isn't Warren just a carrot stick. He buys big into something, and then he mouths off for you to buy too. He cashes in when you push the price up. That has been done on this forum too. Dig Dig..
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Werner_1
Super Contributor
If you guys actually researched how Warren started off, that was not possible, maybe it does have that effect now, but i can assure you that is not his intention, the reporting of his purchases are also delayed for that specific reason, and he doesn't tell anyone what he is buying - he doesnt make stock tips! Anyway, guys, if anyone wants to chat abot long term investing/buffett's principles/etc, you can email me, it seems useless to try to make such conversation on this forum - [email protected] thanks for your inputs.
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Not applicable
Thanks for the pointer. Interesting article and a little re-assuring in these topsy-turvy times.
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john_1
Super Contributor
Werner I totally agree that buying holding and re-investing div's is a sound principle in a bull market and I think he is very cleaver and have read most the books on him etc. The thing I want explained is this....if most fund guru's and investment suits. use this idea of buy low when other are fearfull..why do most underperform the bench mark index?..why are most value investors not billionaires?...could it be that Buffet is unique or is he just extremly lucky?
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Vano
Regular Contributor
Werner, You seem to have the knack of getting this forum going. Don't stop now. In my opinion, Mr. Buffet is one sabe hombre, anything he does with so much publicity, is an attempt to preserve or improve his own net worth. It is in his own interest to help prevent a share price crash in the USA, so he publicly states that he is buying shares. Normally, he would secretly buy the shares, because, Tom, ***** & Harry would immediately stop selling as soon as they find out that THE investor is buying. The ONLY reason for making the announcement, was to get the stock markets up. The rest of the world markets follow the DOW(n). If the Dow goes down, so does his net worth. OMO
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Vano
Regular Contributor
Simon, that's unfair! "Dee I cee kay" may be a four letter word, but this time, I was practically innocent! Your vocabulary of naughty words must really be something to make a sailor jealous!
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Werner_1
Super Contributor
Guys, you all have valid points, John, i remember us discussing these points a while back, i really don't know the answer, maybe the funds/institutions have too high charges (commissions and fees) that reduce the profitability as well as being too regulated and cannot actually buy in the shapes and sizes that they would like to, too diversified as these funds are is not always the best, i think it is (as you say) worse than the index. Yes, Buffett is possibly trying to get the public to start buying, which i would also like to happen, lol...
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Russ
Super Contributor
Keep it clean,Vano.Tom and Harry would have been quite sufficient.
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john_1
Super Contributor
werner the other thing that is important to note..by using other peoples money(family and friends he was using leverage)the pwer of that is not to be ignored..The points you make about limits to funds is valid...One last thing to note...the Loooong term uptrend on the dow has been broken...this trend was started in 1982..so although this is turmoil it also reprents a serrious shift in markets over a 30 year period.
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Werner_1
Super Contributor
Yes, 100% true, that leverage effect helps quite a bit! And true, the markets are having a shift, but i think one just needs to find the next generation of companies that will take the economy to the next level, then one can cash off over time. But i also have to agree, all you guys points over the past week are valid, different strategies have different timeframe/goals, etc. and are used in different ways, combining these in one master strategy can be the most profitable and best wealth creation tool one can get. i think we all have valid points!
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