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Old 01-01-2013, 12:46 PM   #1
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Billionaires Dumping American Stocks... At Alarming Rates

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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.

“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.

“Once you hit 10% inflation, 10-year Treasury bonds lose about half their value. And by 20%, any value is all but gone. Interest rates will increase dramatically at this point, and that will cause real estate values to collapse. And the stock market will collapse as a consequence of these other problems.”

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.
Link : http://www.moneynews.com/MKTNews/bil...source=taboola

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Old 01-01-2013, 01:06 PM   #2
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Old 01-01-2013, 07:54 PM   #3
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August 29th.

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Old 01-02-2013, 07:08 AM   #4
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Great. One of my new year resolution was to invest more in the stock market and as of last night I reallocated my investments.

I hope this administration knows what they are doing. I don't feel like loosing my entire life saving.

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Old 01-02-2013, 07:24 AM   #5
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Old 01-02-2013, 08:20 AM   #6
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Originally Posted by casino is no lie View Post
Wednesday, 29 Aug 2012 05:32 PM
The article was rerun December 31/January 1 : http://www.moneynews.com/Outbrain/bi...MO_CODE=FE8A-1

Reason being, it directly correlates with the activity taking place in the market now (and predicted the fiscal cliff decisions made over the last 24 hours).

Two things are really sad :

1. So far, the guys prediction is proving to be true
2. You turn a blind eye to that reality and simply mock me because it's a reprint of a story
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Old 01-02-2013, 08:25 AM   #7
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The article was rerun...
I saw a rerun of Seinfeld last night. It doesn't make it new.
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Old 01-02-2013, 08:46 AM   #8
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I saw a rerun of Seinfeld last night. It doesn't make it new.
If you've never watched Seinfeld, it would be new to you... of those bickering that this article has been available in the past, how many have seen it before? I'm going to guess ZERO.

You whine not because it's an inappropriate post but rather because you chose to believe that everything is going hunky dory in the economy because "your guy" won the election
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Old 01-02-2013, 09:17 AM   #9
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And I get blasted for spouting about Obama and congress (politically associated) around here and posting articles yet others simply post nonsense and don't contribute to threads. Go figure.
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Old 01-02-2013, 10:24 AM   #10
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If you could get Soros, Buffett, Murdoch, Cramer, Peter Schiff and Jerry Jones (Dallas Cowboys owner) in the same room I wonder what they would say about the economy, where we are headed and our current political leadership ?
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Old 01-02-2013, 11:08 AM   #11
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I remember the first time this hysterical piece was posted here.

Still waiting for the promised implosion 4 months later.
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Old 01-02-2013, 11:10 AM   #12
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Originally Posted by flashtwosix View Post
Great. One of my new year resolution was to invest more in the stock market and as of last night I reallocated my investments.

I hope this administration knows what they are doing. I don't feel like loosing my entire life saving.

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If your all of your life's savings is invested in the stock market you need to hire a new financial planner or get one.
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Old 02-01-2013, 05:25 PM   #13
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Hi

Dow closes above 14000

Hmm
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Old 02-01-2013, 05:28 PM   #14
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Old 02-05-2013, 11:52 PM   #15
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If you could get Soros, Buffett, Murdoch, Cramer, Peter Schiff and Jerry Jones (Dallas Cowboys owner) in the same room I wonder what they would say about the economy, where we are headed and our current political leadership ?
Funny you mentioned this. I was at a clients house the other day and after I was done doing my thing, me and a couple of his billionaire buddies were sitting around shooting the sh*t about this exact topic.

Basically they don't give two sh*ts about the politics, whether they agree with them or not. They are totally concerned with their money and where it is going. All of them want to get their companies and holdings out of CA and a majority of them are already in process of shifting holdings overseas.

Aside from me feeling incredibly poor, it was pretty enlightening to hear their opinions, not a one really had anything bad to say about Obama like right wing nutjobs, just that they don't agree with how taxing the top tier fixes anything. While that is not shocking, it is interesting to hear it from the horses mouth that they will not hire anyone until they see what unravels this year.
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Old 02-06-2013, 08:51 AM   #16
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Buffett has been drastically reducing his exposure to stocks that depend on consumer purchasing habits.
Perhaps yet another reason to do away with that failed scam known as supply-side, trickle-down economics and coddling the rarefied few and directly address and bolster middle-class earnings and wealth, not as some incidental by-product of economic detritus dribbling down off the smorgasbord of the 1%.

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Fellow billionaire John Paulson, who made a fortune betting on the subprime mortgage meltdown, is clearing out of U.S. stocks too.
Why do I then find this somehow reassuring? Perhaps he is not expecting another mortgage meltdown to swoop down on, vulture like, to feast upon the carcasses of the victims once again.

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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.
Shoot fire, I'm no economist by any stretch of the imagination, but I would tell anyone who would listen (precious few) that the housing market was an obvious bubble propping up the rest of the economy and that when that bubble inevitably popped, so would the rest of the economy. If some economic dolt like me could see that coming, I'm not sure coming to the same rather obvious conclusion makes Wiedemer some sort of prescient seer.
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Old 02-06-2013, 08:54 AM   #17
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When domestic stocks are at all time highs it's pretty normal for people to take some gains. This isn't rocket science.
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