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%.
Diane: I can't stand Warren Buffet; however, liberal friends adore him and why? He is considered a great philanthropist. He is built up by the MSM and PBS and that is the only source of information these liberals get their information from because Fox is toxic for them.
Soros is not mentioned much; it was Glenn Beck who exposed Soros and his game of power and his show was taken off the air. Beck was painted as a crazy man to boot.
I know from research that Soros is behind the take-down of the democratic party and he has been successful in politics by using his think tanks to influence the democrats and initiate laws into effect through think tanks.
Finally, the GOP is doing more of the same now with Jim DeMint leading Heritage. I think this will be the conduit which helps mend the internal conflicts within the republican party.
Warren Buffet, the man that told Obama that he needed to raise taxes on the top 1% as he was willing to share the wealth. So, what kind of insider information to do you think he has, or is it possible that he wants to sell off stocks and invest in offshore investiments and avoid paying higher taxes on as much of his money as possible? Not sure how that would work, but I am sure he has a plan.
Or could this be part of the plant to sink the U.S. as Soros is doing the same. Remember, it was not that long ago that he closed his hedge fund company and got out of that; just before we got our first downgrade on our credit rating.
I suspect that we can plan to see another and this one may be more significant. I just know this, if Soros is doing the same there is something really negative about to happen or the reason behind it is not good for he U.S.
What Warren Buffett didn't say was that he more than likely paid himself a salary of $1.00 and that's why his secretary paid more in taxes than he did. He doesn't need a salary.
I'm encouraged by Jim DeMint leading Heritage. We have good leaders in the GOP and not all of them can be considered as a presidential candidate but they can make a difference in other leadership roles.
Love her or hate her, Sarah Palin was successful through her hard work promoting republicans in the congress which resulted in that tsunami win in 2010. We have deep pockets of good leadership within the GOP and now we need to pull it all together before 2016.
It is not unusual to see retirement investments sitting with 50% of their portfolios in cash right now. This is a volatile market and will remain so while Obama is in office.
Bonds are in a bubble and people are getting out of the bonds. If they aren't they need to.
Thank you for the information Diane as you are working with this daily and know the ins and outs. So, get out of bonds but that is what Obama got the government to buy up like crazy; what does that say then?
I agree with everything you are saying Diane and Linda.
The volatility of this market is purposeful by design and intent.
They can only radically change USA by bringing it down.
They know they have to be swift and fast.
Look at the radical changes in the EPA, car industry, Energy, etc. It is happening at super-sconic speeds. They are hitting fast and hard so the republicans have no idea on the extent of the mess. They are not publishing their changes which by law have to be presented in a timely manner to Congress.
All is done with malicious intent.
The finale will be rewriting of the Constitution into a living one; which is a laugh, a joke and a total insult to the American people and our heritage.