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Warren Buffett vesus iTulip

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  • Warren Buffett vesus iTulip

    Is this the beginning of a new bull market? A rally kickoff? A dead cat bounce?

    1) This is the beginning of a new bull market. Be fully invested in stocks.

    2) This is the kickoff of a bear market rally that will take the averages up 20% or more and last at least a few weeks.

    3) This is a great opportunity to sell stocks you haven't already sold. But hurry, because it will only last a day or few!
    204
    This is the beginning of a new bull market. Be fully invested in stocks.
    1.47%
    3
    This is the kickoff of a bear market rally that will take the averages up 20% or more and last at least a few weeks.
    45.59%
    93
    This is a great opportunity to sell stocks you haven't already sold. But hurry, because it will only last a day or few!
    52.94%
    108
    Finster
    ...

  • #2
    Warren Buffett vesus iTulip
    Warren Buffett vesus iTulip

    Is Warren Buffett bubble blind?

    Warren Buffett is an investor in stocks of companies that lead industries, not political economy forecaster. He piled into stocks in 2007 when we were getting out. Now he sees the US economy has ”fallen off a cliff.” Is this the long awaited rally that breaks us out of the Beware Relief Rallies mold?

    May 2007 we noted:
    Buffett predicts more market turbulence
    May 5, 2007 (James P. Miller - Chicago Tribune)

    Investor Warren Buffett expects periodic turbulence in the stock market in the future, and warned that such normal disruptions are likely to be amplified by the hair-trigger buy-and-sell proclivities of the "electronic herd" of investment managers around the world.

    Still, the fabled investor told 27,000 stockholders of his Berkshire Hathaway Inc. investment company this morning that Berkshire plowed $5 billion into the stock market in the first quarter of 2007.

    Buffett said that, if he had to choose, he and investing partner Charlie Munger would rather own stocks over the next two decades, rather than buy twenty-year bonds.

    We said:
    Buffett is methodical. He is also wise. Over the years, we find that most of his pet peeves are the same as ours. He knows the markets offer no free lunch. He doesn't like asset bubbles. He finds state gambling offensive. But he is not as focused on financial market and economic history as we, so there are areas where he comes to different conclusions.

    Buffet is arguably the world's most capable investor, but he doesn't understand the long term implications of Credit Risk Pollution. Credit toxins are oozing out of the financial system in the sub-prime segment of the mortgage market first, in its most vulnerable sector. Soon enough it will be oozing out everywhere.

    Buffett needs to make the connection among the sub-prime mortgage market, derivatives, private equity, and the housing bubble. The impact and risks posed by the development of non-transparent derivatives has been known since at least 1999 when banking expert Martin Mayer wrote the article "Somebody Turn on the Lights," for Derivatives Strategy(Brookings Institution) on over-the-counter derivatives.
    Yesterday Buffett said:
    Warren Buffett Says Economy Has ‘Fallen Off a Cliff’
    March 9, 2009 (Bloomberg)

    Billionaire Warren Buffett, whose Berkshire Hathaway Inc. posted its worst results ever in 2008, said the economy “has fallen off a cliff” and that efforts to stimulate recovery may lead to inflation higher than the 1970s.
    To iTulip readers, that’s Ka-Poom Theory and the collapse of the FIRE Economy rolled into one sentence. First recession then inflation? Who could have known?

    Now the trillion dollar question, might the current rally be the start of a pricing in of rising inflation? With oil bouncing firmly off $40, can inflation be far behind? Will inflation be good or bad for stocks?



    Is this the context for a sustained stock market rally? We doubt it.


    If so, we may be at least nearing an entry point for selective stock buying. While we are as eager as anyone to get out of Treasury bonds and gold, before we go whole hog on stocks, we ponder what we heard on a client call put on by a large investment bank. It gives us pause, especially in the context of the ongoing collapse of the FIRE Economy. To be published shortly.

    Meanwhile, vote in Finster's poll above!

    iTulip Select: The Investment Thesis for the Next Cycle™
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    All information provided "as is" for informational purposes only, not intended for trading purposes or advice. Nothing appearing on this website should be considered a recommendation to buy or to sell any security or related financial instrument. iTulip, Inc. is not liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. Full Disclaimer
    Last edited by FRED; 03-10-09, 02:40 PM.
    Ed.

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    • #3
      Re: Warren Buffett vesus iTulip

      One thing I know is people want stocks to go up. But I don't care about stocks compared to what everyone thinks will happen to the economy. The most pressing issue is not a difference of missing out on 20% in the market but keeping my business going.

      Comment


      • #4
        Re: Warren Buffett vesus iTulip

        Until real estate bottoms what ever rallies there are will be shorter term and into a head wind of unraveling real estate. Most of new money at the current time comes from real estate financing. The other thing perhaps to watch is if they keep interest rates low to save the fire economy, is dollar carry trade and try to see where the dollars are headed.

        Comment


        • #5
          Re: Warren Buffett vesus iTulip

          EJ,

          sounds like you are pondering getting into stocks now.. What happened to the Real Dow forecast and the 2:1 Dow/Gold ratio you were talking about all these years?? Sounds like you are even beginning to think about getting out of gold...What about the hyperinflation? Really confusing. I know the world is not black and white and that investment strategy needs to be adjusted as new facts become known but this is a bit too much.. Am I missing something or reading too much into your post??

          Comment


          • #6
            Re: Warren Buffett vesus iTulip

            Originally posted by FRED View Post
            Buffett needs to make the connection among the sub-prime mortgage market, derivatives, private equity, and the housing bubble.
            iTulip is the best source for economic analysis, but for a moment I'm wondering if iTulip is missing some wider connections with some events, just like Buffett is doing. Gerald Celente has a record of right forecasting as impressive as iTulip's, and he is forecasting now a darker/doomer future than iTulip is:

            Celente Predicts Revolution, Food Riots, Tax Rebellions By 2012.

            Comment


            • #7
              Re: Warren Buffett vesus iTulip

              Originally posted by osmose View Post
              EJ,

              sounds like you are pondering getting into stocks now.. What happened to the Real Dow forecast and the 2:1 Dow/Gold ratio you were talking about all these years?? Sounds like you are even beginning to think about getting out of gold...What about the hyperinflation? Really confusing. I know the world is not black and white and that investment strategy needs to be adjusted as new facts become known but this is a bit too much.. Am I missing something or reading too much into your post??
              I second that! Several of EJ's and/or Fred's recent posts seem to be causing confusion.

              Comment


              • #8
                Re: Warren Buffett vesus iTulip

                All my doom for nothing? Harumph!!!

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                • #9
                  Re: Warren Buffett vesus iTulip

                  Originally posted by gasull View Post
                  iTulip is the best source for economic analysis, but for a moment I'm wondering if iTulip is missing some wider connections with some events, just like Buffett is doing. Gerald Celente has a record of right forecasting as impressive as iTulip's, and he is forecasting now a darker/doomer future than iTulip is:

                  Celente Predicts Revolution, Food Riots, Tax Rebellions By 2012.

                  Only a super depressed person would live their life according to that dude.

                  Comment


                  • #10
                    Re: Warren Buffett vesus iTulip

                    Originally posted by jiimbergin View Post
                    I second that! Several of EJ's and/or Fred's recent posts seem to be causing confusion.
                    Dude, he isn't Moses.

                    On the other hand no, maybe no post titled "The End" and then a poll on if we are buying stocks.

                    Comment


                    • #11
                      Re: Warren Buffett vesus iTulip

                      Originally posted by jiimbergin View Post
                      I second that! Several of EJ's and/or Fred's recent posts seem to be causing confusion.
                      if you're looking for contradiction, you can find it i suppose.

                      i hear 'selecting buying, maybe' not 'let's all go long stocks!'

                      given that itulip has waited 11 years and held out through the 'bottom' that everyone else called in nov. 2008, what's wrong with at least taking a look at a coupla stocks?

                      Comment


                      • #12
                        Re: Warren Buffett vesus iTulip

                        All I am saying is that you don't go from "Road to Ruin" to "let's think about selectively adding stocks" (with a potential for an all-in on the long side) in a space of 2 or 3 weeks. That's just bizarre a bit.
                        What confuses me is how a phenomenal body of work, going back a number of years, clear, logical and consistent in every way suddenly gets into this flip flop mode.
                        Last edited by Osmose; 03-10-09, 04:05 PM.

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                        • #13
                          Re: Warren Buffett vesus iTulip

                          Originally posted by metalman View Post
                          if you're looking for contradiction, you can find it i suppose.

                          i hear 'selecting buying, maybe' not 'let's all go long stocks!'

                          given that itulip has waited 11 years and held out through the 'bottom' that everyone else called in nov. 2008, what's wrong with at least taking a look at a coupla stocks?
                          Partly because after some very doomish post that some of us go quoting to loved ones we seem stupid.

                          Comment


                          • #14
                            Re: Warren Buffett vesus iTulip

                            I think we are sometimes lab rats for itulip. Throw some cheese and see what the rats say.

                            "Are you a man or a mouse," shouts the captain

                            "I like cheese," says I.

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                            • #15
                              Re: Warren Buffett vesus iTulip

                              I bought canned fish in bulk, for crying out loud. Will my broker take it in now in exchange for 100 shares of the SPY?? Any thoughts? And what about the physical gold? I heard Saddam had gold plated toilets. Is it a good idea to gold plate the WC in my rented accomodation?

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