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The "polar bears" are runnng away from stocks. Guess who is buying?
Buffett?s Loading Up On BNI, Others
by Floyd Brown, Advisory Panelist
Dear Investment U Reader,
Warren Buffett is the most successful investor in modern history. Often called the ?Oracle of Omaha" because of his incredible ability to achieve amazing gains in the stock market, he is the world?s wealthiest money manager and investor.
Berkshire Hathaway is Buffett?s investment vehicle. Since he took control of the company and became CEO, it has consistently outperformed the S&P 500. Berkshire has had a compounded annual gain of 21.4% versus 10.4% for the S&P 500 since 1965. The cumulative result is a whopping 361,156% gain for Berkshire versus 6,479% for the S&P 500.
The chart below, put together by Joseph B. Casey, shows what a dollar invested in Berkshire stock looked like at the end of 2006, compared to a dollar invested in the S&P. It?s an amazing story.
So while investors have been sweating bullets during the recent volatility, what has the most famous of investors been doing?
Three Stocks on Buffett?s Buy List
He has been buying stocks, placing big bets that the market will rebound. By closely monitoring filings at the Securities and Exchange Commission (SEC), we can get a pretty good picture of Mr. Buffett?s activities. Here is what he is doing:
Mr. Buffett is buying more Burlington Northern (NYSE:BNI), acquiring shares during the recent market weakness. Here are the actual purchases made by Buffet as reported by CNBC:
Whenever BNI shares dip below $80, he heads back to the market for more.
Buffett also has been buying financial stocks?
He?s growing his position in the Midwestern Banking powerhouse U.S. Bancorp (NYSE:USB). By the time USB announced financial results on January 15, 2008, documents showed Berkshire was the company?s largest shareholder.
Berkshire expanded its holdings in USB by 77% during the quarter ending Sept. 30, 2007. The company now owns a 3.8% stake in USB, according to Bloomberg.
Besides that, Buffett is riding to the rescue of Swiss Re (OTC: SWCEY.PK), the world's largest reinsurance company. Berkshire, which owns General Re, one of Swiss Re's biggest competitors, has purchased a 3% stake in the Switzerland-based insurance titan. Buffett will also take over a large chunk of Swiss Re?s future business.
The agreement allows Swiss Re to find the money it needs because the company became embroiled in the subprime mortgage market meltdown. Swiss Re has lost more than a quarter of its value since announcing it would take a large write-down on insurance for complicated mortgage derivatives.
Berkshire Hathaway will take 20% of all premiums from Swiss Re's property and casualty insurance over the next five years in return for taking on 20% of the insurance risk. Consequently, Swiss Re can reduce its reserves, freeing up capital to deal with the crisis.
Mr. Buffett's moves will clearly make him a long-term big winner from the credit crisis, just as he?s done in past market downturns when he acquired assets. The key to his long-term success is a strict adherence to his value-based investment philosophy?
still the same stand again...though the uptrend will not be in a straightline but the trend will be higher high till mid April....good luck :)
Senior |
Posted: 14-Feb-2008 16:33 |
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market will move higher high till mid april....good luck trading :) |
Pass by Shareinvestor website and saw this. I think it's encouraging.
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30 days CFD deadline is only an administrative closure...
One can easily 'extend' the position if desired... by payment of a new commission ... 
The bull-splat greenflies are back!!! ....