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Is it time to sell your stocks? Really?

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Is it time to sell your stocks? Really?

Old 06-09-2015, 11:18 AM
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Default Is it time to sell your stocks? Really?

So I'm sitting around the office today at lunch and several guys are discussing their retirement and are calling the firm we use to manage our funds. They are moving their stuff out of stocks. So I'm listening and they say Warren Buffet is selling off everything and prepping for the next melt down later this year.

I didn't think much of it but this afternoon as I'm walking thru the building I hear a couple of other guys doing the same. Now these guys all know each other and I'm thinking they are all playing follow the leader and acting like sheep, but you got to wonder sometime.

It seems to me that Buffet is both selling and buying just changing his portfolio to take advantage of the next wave of stupidity in this country.

I did OK last turn down and I don't usually move much of anything and certainly don't follow the lunchroom crowd. Am i missing something here?
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Old 06-09-2015, 11:24 AM
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Buffet is a hypocrite...

and what do you think the next wave of stupidity is? I'm afraid it is here...and already in the markets.

The credit markets are starting to have some serious issues...moreso than years prior. Do you think the Fed will raise rates by a token amount? What happens if they do? What happens if they don't?

Where ya gonna hide? Me, personally, I believe in gold...whatever that is worth to you.
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Old 06-09-2015, 11:24 AM
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Originally Posted by mrdeepseafisher View Post
So I'm sitting around the office today at lunch and several guys are discussing their retirement and are calling the firm we use to manage our funds. They are moving their stuff out of stocks. So I'm listening and they say Warren Buffet is selling off everything and prepping for the next melt down later this year.

I didn't think much of it but this afternoon as I'm walking thru the building I hear a couple of other guys doing the same. Now these guys all know each other and I'm thinking they are all playing follow the leader and acting like sheep, but you got to wonder sometime.

It seems to me that Buffet is both selling and buying just changing his portfolio to take advantage of the next wave of stupidity in this country.

I did OK last turn down and I don't usually move much of anything and certainly don't follow the lunchroom crowd. Am i missing something here?
Buffet doesn't make money trading. He makes money by lending to a company that is in bad shape and then get's warrants or options then cashes them in for major returns. I.E. the goldman sachs deal he made. You aren't going to get those deals in your 401k
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Old 06-09-2015, 11:30 AM
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I am pretty vested in the venture technology field so I won't be cashing in anytime soon.. made a good chunk off Amazon....
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Old 06-09-2015, 11:34 AM
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Originally Posted by midcap View Post
Buffet doesn't make money trading. He makes money by lending to a company that is in bad shape and then get's warrants or options then cashes them in for major returns. I.E. the goldman sachs deal he made. You aren't going to get those deals in your 401k
Pretty true...I'd be willing to bet my life's savings on the fact that he stepped in where the gov't couldn't (publicly) and bailed GS out with a private blessing from the gov't.
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Old 06-09-2015, 11:35 AM
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I sold almost a year ago with the slight correction. I gave up my Appl at 95. Did better with my oil stocks though. I am not selling again. No place to go with the dough.....
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Old 06-09-2015, 11:38 AM
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Originally Posted by schoolsout1 View Post
Pretty true...I'd be willing to bet my life's savings on the fact that he stepped in where the gov't couldn't (publicly) and bailed GS out with a private blessing from the gov't.
Of course, no one else had enough liquidity at that time.
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Old 06-09-2015, 11:45 AM
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Originally Posted by midcap View Post
Of course, no one else had enough liquidity at that time.
I'm saying the gov't was behind it in some fashion...as the gov't could not be seen rescuing GS
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Old 06-09-2015, 11:51 AM
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Originally Posted by kennyboy View Post
No place to go with the dough.....
^This is the problem
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Old 06-09-2015, 12:17 PM
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Originally Posted by Belrose View Post
^This is the problem
I think gold is the place to go (obviously not with everything you own)

I believe at some point in the not so distant future, the derivatives chain will break again (the issue has only grown since the "great recession" and is much larger than ever before. The only reason the charade has gone on like it has since is due to suspending mark to market...with the credit markets starting to hemorrhage, this could be the catalyst. Sooner or later, it will break....

Most everything has liabilities attached to it....gold does not. So, while it does not pay interest (in the West, at least), it also has no liabilities attached to it. I think when things get bad and systems must reset, gold will be used to balance the balance sheets of gov'ts/central banks all over the world.

But hey, I'm just a nut so don't hold that against me
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Old 06-09-2015, 12:35 PM
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I am an opportunist- I see a good time to buy.
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Old 06-09-2015, 12:49 PM
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Funny I just came across this - just moved some stuff around thinking exactly this.
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Old 06-09-2015, 12:50 PM
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Originally Posted by Avid 24 View Post
I am an opportunist- I see a good time to buy.
What are you buying?
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Old 06-09-2015, 01:50 PM
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Dividend sensitive stocks (REITs, Utilities etc.) have already corrected and may continue to drop. The energy complex too has taken a pretty good hit. My guess (based on what they say at the federal reserve) is that there will be one or two at most 1/4 point moves b/w September and March of next year and then they will let it sit for a while.

I don't think they can raise more than that as Europe and Japan and India and China are all cutting. The strong dollar is already hurting corporate profit margins of the multinationals.

After the first rate hike most people expect a sharp downdraft. Unless there is something else going on that pullback will likely be a time to consider adding to the equity portion of your portfolio. I am selling some winners or parts of some to raise some cash but doing nothing real drastic. I continue to dollar cost average into a couple of passive portfolios. My passive portfolios are 58 stocks on one and 69 on the other.

My real fear is the credit markets in t-bills gets real hit. Last quarter was the first time in decades bond holders lost money. When people find out bonds are not safe in terms of cap preservation things could get weird if liquidity is unavailable. I hope it does not happen.
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Old 06-09-2015, 01:56 PM
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I plan to sit tight and weather the storm. I like to trim the hedges every so often but have no intention of yanking the plant out by the roots.
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Old 06-09-2015, 02:15 PM
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I've been moving a bit around to stocks that I believe may do better than others due to relatively high EPS or have just taken a sound beating. Over the last 2 weeks I have opened positions in SAFM, NAT, and VDE. I always like to have one that is a bit riskier and that is my CHK position I opened today. I moved that money from MNKD which has been on a tear the last several days.

Chicken and several energy plays is where I will be spending the next 1-2 years.
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Old 06-09-2015, 02:21 PM
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Originally Posted by joe.giuliano View Post
Dividend sensitive stocks (REITs, Utilities etc.) have already corrected and may continue to drop. The energy complex too has taken a pretty good hit. My guess (based on what they say at the federal reserve) is that there will be one or two at most 1/4 point moves b/w September and March of next year and then they will let it sit for a while.

I don't think they can raise more than that as Europe and Japan and India and China are all cutting. The strong dollar is already hurting corporate profit margins of the multinationals.

After the first rate hike most people expect a sharp downdraft. Unless there is something else going on that pullback will likely be a time to consider adding to the equity portion of your portfolio. I am selling some winners or parts of some to raise some cash but doing nothing real drastic. I continue to dollar cost average into a couple of passive portfolios. My passive portfolios are 58 stocks on one and 69 on the other.

My real fear is the credit markets in t-bills gets real hit. Last quarter was the first time in decades bond holders lost money. When people find out bonds are not safe in terms of cap preservation things could get weird if liquidity is unavailable. I hope it does not happen.
The problem with raising rates is that it will, more than likely, blow up the derivatives...

From a source I trust
http://www.jsmineset.com/2015/06/08/...false-beliefs/

The following is how Jim Sinclair has described derivatives:

"There is no such thing as a derivative that does not have an implied or defined interest rate characteristics. This is the chain that connects them all.

That makes this problems larger than one quadrillion dollars, the true level of the notional value derivatives outstanding before the BIS got into Whoopers, changed the computer program for measurement and reduced outstanding notional value of derivative outstanding to just $700 trillion in 2007. Here is the concept you must understand. Notional value of a derivative becomes real value of the derivative in the event of derivative bankruptcy. Derivative bankruptcy is defined as the breaking of the interlocking chain, interest rates. Now, you the reader, have a feel for how big this problem is. This unwelcome change in the interest rates market, the bond market, is truly the god of Death for the world’s financial system. When the smoke clears, gold will be the only true measure of value (a definition of money) with gold’s only mechanism for price discovery being the now growing and transparent physical market, the paper market will be in tatters as will be the paper exchanges and paper public companies that own these exchanges."

In a nutshell, derivatives NEVER DIE, THEY ONLY GROW LARGER!

Before moving on, HUGE NEWS has broken today, the two CEO’s of Deutsche-Bank have stepped down! http://www.usatoday.com/story/money/...down/28641471/ Deutsche-Bank is the largest holder of derivatives in the world, equaled ONLY by JP Morgan holding a "cool" $75 TRILLION!!! Please view the following chart of the 10yr Bund, rates have exploded higher in a very short time span. Huge losses have been incurred as ALL derivatives have interest rates assumptions within, no doubt your reason for the sudden resignations!
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Old 06-09-2015, 04:30 PM
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Originally Posted by schoolsout1 View Post
I think gold is the place to go (obviously not with everything you own)
Most everything has liabilities attached to it....gold does not. So, while it does not pay interest (in the West, at least), it also has no liabilities attached to it. I think when things get bad and systems must reset, gold will be used to balance the balance sheets of gov'ts/central banks all over the world.

But hey, I'm just a nut so don't hold that against me
Gold is down 40% from its peak (80% if you count what you could have made if the money was in the market) - it is mostly a consumer investor product, so they only ones who really make money with it are speculators riding the wave up.
As it is no longer part of any government's currency program - it is not used to rebalance anything.
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Old 06-09-2015, 05:08 PM
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Stocks for a mature bull market - see Joe's post above. WFC, ESRX, ORCL, UNP, Energy MLPs, .....
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Old 06-09-2015, 05:40 PM
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Buffet uses the float from insurance operations and excess capital from the various business BRK owns, to purchase more good companies. That includes wholly owned private companies, portions of publicly traded companies and increasingly, buying an entire publicly traded company and taking them private.

Originally Posted by LI Sound Grunt View Post
Stocks for a mature bull market - see Joe's post above. WFC, ESRX, ORCL, UNP, Energy MLPs, .....
Whatever that is.


You guys are way smarter than I am. I continue to buy stock. Why? My current yield on investments is ~6.7%/year from dividends and 130% in capital gains. Selling would trigger taxes and loss of dividend income, that I use to make additional stock purchases. Which in turn increases my dividend income, which allows me to buy more stock. Which increases my dividend income............. Wait isn't that kind of what Buffet does?

Last edited by aubv; 06-10-2015 at 02:12 AM.
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