Myth -- happy to move on but not most of my most recent posts have been in response to absurd comments like the one I will now address.
Bingo. That MOS doesn't *ever* come from the macro economy. That's the point.
This comment is absurd as it doesn't relate to anything previously discussed -- the person is living in their own world.
Macro is an important and unknowable thing. Which is why one shouldn't overdue it. Thats one of those Buffett quotes you so selectively choose to ignore. I would prefer to listen to him vs. a person who thinks he knows what he means. Buffett speaks in simple words, I dont think he needs an interpreter.
As evidenced by the origination of this thread, Buffet does pay attention to macro risk -- he wrote a lengthy and incredibly insightful essay on the impact of inflation (a macro factor) on equity returns. Macro risks are among the many that must be considered when determining the required margin of safety.
Moving on to Myth's comments -- I just plain disagree, in the most respectful way possible.
Grant is an intelligent man but has not proven much of an investor. I've been a long time subscriber and he is insightful and I have learned a lot about the history of finance and markets but I have rarely walked away with a great investment idea. Note Grant long argued for a booming and robust recovery from the current recession -- not such a great call.
Lol Grant is on your side, he feels the Fed has gone mad. But he is useful in terms of his explanation for whats going on and more importantly why, which mirrors mine.
Cardboard, I dont think its a huge Mania
Could not disagree more -- we are in the middle of a mania surrounding QE2, fueled by guys like Tepper talking his trading book. Not a mania of tulip bulb proportions but the hysterics around QE2 are everywhere, everyday.
Fair enough. I think its a market. Fear and Greed, 2 extremes. The market going up 10% after going down 20% hardly seems like a mania. Maybe it will turn into one, but my guess is it turns on the first piece of bad news. We have had a good week or two after 5 - 6 bad ones. With a 24 hour news cycle everything feels like a mania. Europe issues were made to feel like the world was coming to an end. Funny how its only a mania when things go against your theory. I think they call that confirmation bias.
I can honestly say I dont know what the hell will happen. I think / hope its going to be range bound while things sort themselves out. Either way I buy cheap and sell ...
People feel like they are missing out.
Sounds like the making of a mania.
They should have got in at 9900 when Parsad said things were cheap
Let's be clear -- the stock market did not spike in Sept because people woke up and thought stocks were cheap. The market has gone up because of the hype around QE2, which has not doubt caused some short covering.
Sounds like a market to me. People got in because they thought they missed the boat. I got in because my stocks were cheap. I will get out when it gets less cheap and they will probably take the hit and ride it down. Then I will get back in. Buy cheap, sell dear. Jim Rogers has the best rationale. The market rallies when it needs to and sales off when it needs to. It will find a reason to do what it needs to do. Why they get in doesnt matter to me. I buy cheap, sell less cheap in this market, dear in a normal one.
I think Tepper is doing the right thing. The man manages billions, he has to do something with it. Should he tell his people he is going to hold cash while the Fed is promising it will be worth much less tomorrow.
Tepper sounded like an idiot on CNBC. The guy is not an investor in the mold of Buffet, Munger, or BG. He is a trader and hearing him talk the other day reminded me Jesse Livermore. Using Tepper's name on a board dedicated to Buffett is a borderline criminal offense:)
The man has made more money then this board aggregated. Stop being such a purist. He obviously knows something and it all spends the same, and you dont get extra points for doing it the Munger way. His thesis was 100% correct during the financial crisis. Calling him an idiot is like calling Soros an idiot because he doesnt invest how you do. Lets save that word for the real idiots - Jim Cramer.
Should he tell his people he is going to hold cash while the Fed is promising it will be worth much less tomorrow.
This is part of the mania -- there is absolutely no guarantee that the Fed policy will work -- see Japan.
Its a world full of risks and bad decisions. One has to pick one and move on.
Again -- borderline criminal statement on a board dedicated to Buffett. How many times has Buffet asserted that the great investors realize they don't have to swing -- they can sit on their ass and wait as long as it takes for a fat pitch.
If you are holding cash then I think we should wait and see how that works out.
You are intoxicated with QE2, the "certainty" of dollar debasement, and cash is trash. "Playing" a trade on QE2 is just not my style. And I agree only the passage of time will show the correct approach -- so let's move on...
First of all your hero's business partner is convinced of the certainty of Dollar debasement. History has shown that the dollar has been debased on just about a yearly basis. Second, who here is trading on QE2?
Third, Lol you totally missed my point. Your options are as follows - Stocks, Bonds, Gold, Commodities, Housing / Realty, or Cash. All are bad options. Pick one and move on. I pick Stocks. You pick Cash. I hold some cash to hedge my bets, sleep a little better, and reload on the downside. Your rhetoric and refusal to name 1 investment idea implies that you hold significant amounts of cash, waiting on that magical day where the best companies in the world trade for pennies on the dollar. I am not thrilled about my prospects but yours look pretty bad as well. For a guy like Tepper who manages billions to hold more then 20 or 30 percent cash would be almost criminal. He would simply lose his assets under management.
The market is full of uncertainty. Get used to it. Make your bed, lie in it, and sleep tight. I am indifferent to QE2 from an investment perspective. I think its ingenious from a monetary academic perspective (global coordinated inflation). Bernanke's job sucks. Inept fiscal policy, stupid electorate, useless Congress, 20% real unemployment, deflation on the horizon, everyone trying to debase there currency to inflate the dollar stealing our manufacturing and pushing up our unemployment, and 70% of the US Engine / 14% of the WW Engine (the US consumer) loaded with debt.
I think sitting on his hands hoping it all works out looks just as bad from where im sitting, and doesnt work well economically or politically. Buffett is man enough to realize that and avoids throwing stones. You seem to be bitching and thats about it. All options look bad. I have consistently said its a high stacks game of chicken. That sort of implies its not guaranteed to work. What do you propose. Probably something regurgitated from Rand, Keynes, Hayek, Friedman, Rothbard, Paul, or some other guy / girl. Guys like you would still have Brazil mared in semi hyperinflation.
At least when I tone into Schiff, Rogers, Faber, and company I get some sort of advice vs. sit on your hands.
I have assets and they need to be allocated. My stocks which are backed by oil, tankers, planes, buildings, and businesses and are cheap in my opinion look better to me then your cash which is likely to shrink in value. Keep waiting on coke for 5 times current year earnings. I think it will be a long wait. If you are right hopefully I have a bit of cash to be buying as well.
I admire your energy but would prefer to read about the ideas you like vs. hearing the market is overvalued. I tend to agree with you giving the crummy outlook, but I dont own the market. What I do own, I think is cheap, but would welcome any and all feedback. I would also like to trade out for cheaper higher quality ideas and look forward to those posts.