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A Little Thursday Morning Conspiracy Theory Fun

Tyler Durden's picture


From Peter Tchir of TF Market Advisors

A Little Thursday Morning Conspiracy Theory Fun

To most Americans, the stock market is the Dow Jones Industrial Average.  Whether professionals follow it or not, it really is what most Americans look at when judging the health of the market.  And guess what, it is up over 3% on the year.  Yes, the S&P and marginally down on the year, but the DOW, the symbol of the American Market is up.

I found Mr. Buffet's purchase of IBM somewhat interesting.  He has avoided "tech" companies for a long time.  I understand that IBM has diversified, but it is hard to really classify it as much other than a tech company.  Also, for a legendary value investor, find a stock that is up 28.5% YTD, 35% in the past year, and is at an all-time just seemed weird.  Again, I understand that sometimes value can be found in the biggest companies, even those trading at its all time highs or that have had massive runs.  According to Bloomberg there are 15 analysts with a buy recommendation and 16 with a hold.  Not the everyone's favorite stock, but hardly out of favor.

His purchase of BAC was done to make money but also seemed designed to "help" the market.  Deciding while in the bathtub to go long a bank with a confusing corporate structure, opaque accounting, and seem real issues, seemed surprising, but at least he seemed to get a good price for that "buy America" investment.  Maybe it is a co-incidence that BAC is in the DOW and that purchase also helped drive the DOW higher, but it had limited impact since BAC has such a low weighting.

IBM, on the other hand, is the DOW.  Since the DOW is "price weighted" IBM represents almost 12% of the DOW.  In a moment of boredom, I took the current weighting of each member and multiplied by their YTD returns.  That gave me a 7.3% return of which IBM was 3.5%.  Obviously the weightings and adjustments affect how the individual stock price changes over the course of the year, but I think it is safe to assume that 50% of the DOW's out-performance is a result of IBM, and it is unclear how much of that can be assigned to Mr. Buffet's purchases.

He also owns Moody's which didn't join in the USA downgrade party.

Is Mr. Buffet doing more for public policy and morale than all the politicians combined?  Should he be doing it, and is he really doing what is best for shareholders in BRK/A?  Since 1998 and the LTCM crisis, the shares of BRK/A have done okay, but not sure that anyone would look at the last 13 years and coronate him the oracle?  A very smart person, with a very long track record, but is he trying to do too much?

The IBM investment just seemed a bit weird for him, and it is interesting the outsized impact it has on the DOW and hence public perception of the markets.  I'm not sure it really means anything, but more interesting to think about than the latest utterance from some unelected EU official.


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Thu, 11/17/2011 - 12:46 | 1887261 Hedgetard55
Hedgetard55's picture

Where is the Reggie Love pic? That does not need to be photo shopped.

Thu, 11/17/2011 - 12:56 | 1887297 ratso
ratso's picture

WB knows BAC very well.  Remember when he comented that they overpaid for Merrill?

It is fair to assume that he did BAC to make money.  I think he believes that making money IS his contribution to the economy.  I can't believe tha the confuses philanthropy with investing.

Thu, 11/17/2011 - 13:11 | 1887393 Arthor Bearing
Arthor Bearing's picture

Warren Buffet is an alien

Thu, 11/17/2011 - 13:15 | 1887410 Hard1
Hard1's picture

Actually the raising the Dow conspiracy theory sounds really likely.  If the Pulitzer were still awarded to freethinking real jounalism, Tyler should hold about 11 prices by now.

Thu, 11/17/2011 - 13:37 | 1887440 Arthor Bearing
Arthor Bearing's picture

No no I'm with you. He met with Bush on 9/11 after the planes crashed:

He very publicly bought $5 billion of BAC a couple days after speaking with Obama about measures to help spur the economy:

He was connected with shady Salomon Brothers bank with its big office in WTC7. And he very publicly makes comments that keep him on the public's good side despite being one of the richest men in the world. I don't trust Buffett as far as I can throw him.

Thu, 11/17/2011 - 13:12 | 1887399 Richard Chesler
Richard Chesler's picture

Is Mr. Buffet doing more for public policy and morale than all the politicians combined?

No. He's doing more for corruption and fraud than all the politicians combined.

Thu, 11/17/2011 - 13:15 | 1887413 oogs66
oogs66's picture

oh man, that is a tough call - they are so close, neck and neck into the finish

Thu, 11/17/2011 - 13:50 | 1887635 hawks5999
hawks5999's picture

This is a quid pro quo between Buffett and the feds over his back unpaid taxes.

The IRS takes a bigger hit if the economy tanks even more than what they lose by not collecting from WB.

Thu, 11/17/2011 - 14:41 | 1887888 TruthInSunshine
TruthInSunshine's picture

'Tis far easier and more financially efficient to target a mere 30 stocks, in an attempt to float them or stabilize them, let alone keep them from reaching their FMV (i.e. much lower), in a bid to try and bid of CONfidence (that even Larry Jabba Summers conceded is a primary goal of TPTB, so as to allow the frogs to boil more slowly and be able to pick their pockets more aggressively while they relax before expiring, whereas simmering them too quickly leads to an amount of pain and sensory shock that might wake them up to the fact we're in a depression and they're the grist for the Ponzi Mill).

So, it's no conspiracy.

Anyone who claims otherwise is the type of person who would deny the existence of The President's Working Group on Financial Markets (aka Plunge Protection Team).

CONfidence is the most important ingredient in perpetuating a Ponzi.

Once the CONfidence is gone, people who have awakened to reality do crazy things like ask for their money, save, pay down their debts, etc. - and then....then....there's a giant smashing sound as the plates of rationality meet the floor of reality.

Thu, 11/17/2011 - 12:47 | 1887267 forexskin
forexskin's picture

where is WB7 when we need him. this is over the top for even a caption contest. WTF?

Thu, 11/17/2011 - 13:07 | 1887368 iDealMeat
iDealMeat's picture

All kinds of fun with that, considering:

Dow Jones & Company is a subsidiary of News Corporation (NASDAQ: NWS, NWSA; ASX: NWS, NWSLV;




Independent Registered Public Accounting Firm
Ernst & Young LLP
5 Times Square
New York, NY 10036


Thu, 11/17/2011 - 13:11 | 1887338 jdelano
jdelano's picture

Come on Peter, just state it.  It isn't a question.  Buffet knows full well the markets are teetering on the precipice of total collapse which will devastate Berkshire.  He also knows he is the single most influential investor in the world.  There is absolutely no justifiable reason for him, given his investing history and idealogy, to suddenly begin purchasing IBM except as a means of propping up the DOW.  If the DOW falls M-Dub is going to look like Nostradamus as cap gains plummet and municipalities across the country go belly up in a red tide of debt.  Stop pussy footing around pretending to be an optomist and call it as you see it.   

Thu, 11/17/2011 - 13:04 | 1887363 whatsinaname
whatsinaname's picture

General Maritime files Chapter 11

Thu, 11/17/2011 - 13:06 | 1887375 Urban Roman
Urban Roman's picture

... just like when Bush kissed that Saudi oil poohbah ...

No, we don't need the oil, seriously. Not at all. In fact we're thinking of boycotting OPEC.






Thu, 11/17/2011 - 12:45 | 1887250 Sqworl
Sqworl's picture

He who pays -- picks the music for the puppets

Thu, 11/17/2011 - 12:52 | 1887293 Beatscape
Beatscape's picture

Much easier to manipulate 30 stocks than 500. Create a feel-good false sense of security. Keep the sheeple happy and buying iPads.

Thu, 11/17/2011 - 12:57 | 1887325 oogs66
oogs66's picture

especially when so many people will mimic his positions

Thu, 11/17/2011 - 13:31 | 1887476 mayhem_korner
mayhem_korner's picture



Leverage - Buffet style.  Hike up the flag-bearer (IBM) and the thirty will follow; and as the Dow goes, the rest will follow.  As George Kastanza once uttered, 'that's like discovering accident.'

BTW, what other sheep-idols might be in on such a charade? 

Thu, 11/17/2011 - 12:45 | 1887253 BetTheHouse
BetTheHouse's picture

Stop it now. You are going to make me cynical.

Thu, 11/17/2011 - 12:45 | 1887255 dexter_morgan
dexter_morgan's picture

Makes sense, a lot more that the following does.

Thu, 11/17/2011 - 12:47 | 1887265 Hedgetard55
Hedgetard55's picture

3% nominal. What about in real terms?

Thu, 11/17/2011 - 12:47 | 1887266 Irish66
Irish66's picture


Thu, 11/17/2011 - 12:49 | 1887275 rdlem
rdlem's picture

Doesn't IBM do well during World Wars?

Thu, 11/17/2011 - 13:08 | 1887379 dracos_ghost
dracos_ghost's picture

Welcome to the Fourth Reich.

With the amount of cash IBM has on the sidelines, they're pretty much a hedge fund rather than a tech company.

Thu, 11/17/2011 - 13:16 | 1887418 Bwahaha WAGFDSMB
Bwahaha WAGFDSMB's picture

Is IBM still under the same management it was under durring the last world war?

Thu, 11/17/2011 - 13:31 | 1887472 earleflorida
earleflorida's picture

they work as no-bid independent contractors for the "MIC", period!

program all nuclear subs, all nuclear land, sea defense installations , and "NORAD"

wb owns the 2nd largest RR in america , and what's funny is that the largest RR's HQ is only down the road in omaha

and yes i do believe that people work off of perception - so if the dow is up,... the economy is good in their minds

Thu, 11/17/2011 - 14:05 | 1887733 flattrader
flattrader's picture

Yes.  IBM did quite well during WWII.  Thier German subsidiary did a bang up job supplying the Reich with tabulation machines which made running the German war machine and concentration camp system so much more effective.  Thier tabulation machines made the deportation and gassing of undesireables much easier.  The US subsidiary provided the special paper for the crucial Hollerith style punch cards.  Without that material support, it would have been extremely difficult for the concentration camps to fun as efficiently as they did.

The corporation stategicallly placed IBM soldiers immediately behind the invading Allies to reclaim the machines for the post-war reconstruction effort.

They did quite well pre, during and post war.

Thu, 11/17/2011 - 12:49 | 1887278 achmachat
achmachat's picture

How about precious metals going down when they are supposed to go up?

Thu, 11/17/2011 - 13:04 | 1887364 mayhem_korner
mayhem_korner's picture



Did you watch the bears?  'splains the smackdowns the CBs are perpetrating.

Thu, 11/17/2011 - 12:49 | 1887279 Cult_of_Reason
Cult_of_Reason's picture

Buffet is a hypocrite billionaire.

Nuff Said!

Thu, 11/17/2011 - 13:05 | 1887366 Sancho Ponzi
Sancho Ponzi's picture

Speaking of hypocrites, Steven Chu is testifying today to defend his loan to Solyndra.  I wonder how many freaking trees were cut down to build his cushy Oakland residence? And where did he come up with the cash to pay for a $1.4 million dollar house?

Thu, 11/17/2011 - 13:33 | 1887498 earleflorida
earleflorida's picture

while your at it, check out kennedy's $1.4bn gov't bailout,... pathetic 

Thu, 11/17/2011 - 13:34 | 1887504 Ragnar24
Ragnar24's picture

The while "green movement" is a hypocritical farse. Isnt it convenient that they are ALL profiting from their own propaganda? If they really were the environmental altruists they claim to be, they'd live modestly and invest their "evil" profits to restore nature.

How much wealth do think is going to be transferred through the Chicago Climate Exchange (from evil industrialists to altruist Greens)?

How coincidental is that ROCKEFELLER is a Greenpeace donor while Greenpeace lobbies against nuclear?

Thu, 11/17/2011 - 12:49 | 1887280 Hedgetard55
Hedgetard55's picture

Lavazza down to 8 oz. of coffee in the can now (it was 8.8 oz not long ago), and price has gone from $5.49 to $6.49 at Shoprite, it is $6.99 - $7.99 everywhere else.

Thu, 11/17/2011 - 12:50 | 1887285 GeneMarchbanks
GeneMarchbanks's picture

'I found Mr. Buffet's purchase of IBM somewhat interesting.  He has avoided "tech" companies for a long time.'

Maybe he thinks there is a holocaust coming...

Thu, 11/17/2011 - 12:57 | 1887316 peekcrackers
peekcrackers's picture

GeneMarchbanks +1 to you sir!

jew counter.. only this time sheep counter

Thu, 11/17/2011 - 13:00 | 1887337 GeneMarchbanks
GeneMarchbanks's picture


I'm neither a jew nor homosexual or gypsy but I am scared.

Thu, 11/17/2011 - 12:50 | 1887286 gojam
gojam's picture

Nathan Rothchild followed a similar policy as Buffet late 18th, early 19th century in Britain.

Kinda worked for him.

Thu, 11/17/2011 - 13:38 | 1887537 earleflorida
earleflorida's picture

don't quote me but i glossed over some financial's, years back, and noticed that rothschilds held ibm

they own the bilderberg, etc., etc,. 

Thu, 11/17/2011 - 12:51 | 1887292 Everybodys All ...
Everybodys All American's picture

Crony MF - Global Capitalism

Thu, 11/17/2011 - 12:52 | 1887296 I am a Man I am...
I am a Man I am Forty's picture

Don't worry, dumb ass investors will vote with their feet soon enough and abandon the cult of personality that is warren buffett as quickly as everyone outside of happy valley has dumped paterno and pedophile state university

Thu, 11/17/2011 - 12:52 | 1887298 slaughterer
slaughterer's picture

Buffy has a $38 billion derivative bet on the S&P rising another 65% over the next 16 years.

Thu, 11/17/2011 - 12:56 | 1887310 HD
HD's picture

He'll be dead by then. If I were him - I'd cash out and enjoy the time I have left. I bet Becky Quick has her price Warren - go for it!

Thu, 11/17/2011 - 12:53 | 1887299 monopoly
monopoly's picture

No interest in Buffet and never had any. No doubt this is the most boring market I have seen in a long time. The last week, just blah. No bother though. Do not trade this market and like my core positions. And as always this year, no shorts.

Thu, 11/17/2011 - 12:53 | 1887300 HD
HD's picture

Buffet - a nice old man I suppose, is just talking his book like they all do.  No BS or PR is going to fix this one folks.

Thu, 11/17/2011 - 12:55 | 1887302 peekcrackers
peekcrackers's picture

 baaa baaa Baaaaaaaaad market! little sheepS

Thu, 11/17/2011 - 12:55 | 1887305 YesWeKahn
YesWeKahn's picture

Buffet is helping Obama, period.

Thu, 11/17/2011 - 12:56 | 1887309 Dineroguru
Dineroguru's picture

Has Buffett covered his naked put position on market he put on a few years ago to lots of hoop-lala?

Thu, 11/17/2011 - 12:59 | 1887329 oogs66
oogs66's picture

he probably doubled down, or wrote some puts on the dow :)

Thu, 11/17/2011 - 12:59 | 1887311 DormRoom
DormRoom's picture

what the guy above me says.


Thu, 11/17/2011 - 12:56 | 1887317 Carlyle Groupie
Carlyle Groupie's picture

Lasagna bitchez!

Thu, 11/17/2011 - 12:58 | 1887318 Captain Benny
Captain Benny's picture

Whatever happened to Buffet only investing in companies that "I understand" ??  The guy traditionally sticks to transports and understandable businesses.  There are LOTS of good buying opportunities in that space right now, so its odd that he'd pick a tech company when so much opportunity is available in names he understands.

Buffet absolutely has refused any high tech R&D and tech companies for this reason -- FOR DECADES.  The IBM investment is fishy no matter what.

Then add the confidential treatment order granted by the SEC... hmm

Thu, 11/17/2011 - 14:49 | 1887946 blunderdog
blunderdog's picture

IBM isn't high-tech R&D.  It's old-school computer manufacture and sales, plus IT consulting services.

There's nothing tough to understand about IBM. 

It could mean something if he were investing in Groupon or Linked In.

Thu, 11/17/2011 - 15:47 | 1888328 TruthInSunshine
TruthInSunshine's picture

The overwhelming bulk of what was IBM as a manufacturing business (i.e. producing hardware) was sold to Lenovo of China a long time ago, and IBM now exists mainly to cash in on software, artificial intelligence and other proprietary non-hardware wares, which will be very important in Orwellian Society for generations to come.

Thu, 11/17/2011 - 12:57 | 1887321 DogSlime
DogSlime's picture

I doubt that many people care that the DOW is up 3% when they are losing jobs, everything is getting more expensive and the future just looks like more of the same and worse.

Maybe during the good times people feel encouraged by rising stock prices but when their lives are turning to shit, it just looks like the elite are doing great whilst everyone else is getting fucked over.

Banks and oil companies and Wall Street showing healthy profits/bonuses is more likely to cause public outrage than public optimism these days - isn't it?

Thu, 11/17/2011 - 12:59 | 1887322 Caviar Emptor
Caviar Emptor's picture

I don't think this is a Theory anymore. 

Archimedes Buffet has shown he is willing to frontrun Federal spending programs that he has advance knowledge of, like this summer when he bought BAC only days before the Obama administration announced a huge mortgage refi stimulus plan. But claims he got the eureka moment "in his bathtub". Thinks we've got a 10 year-old intelligence

That's plain old cheatin'

When he says that he 'buys when blood is running" what he means is he acts as his own self-fulfilling prophecy. A not subtle code to big investors to get on board with him. Which is very cose to the tipping point where crony capitalism becomes an old style elightened monarchy where well connected Lords make the big business decisions, backed by the king in a series of sweetheart deals and anti-competitive arrangements. 

The model for his actions gets closer to Prince Alwaleed Bin Talal of the Kingdome of Saudi Arabia who styles himeself a "businessman" but with absolute, autocratic power in his country plus obvious huge non-negotiable power to get special deals abroad. 

Thu, 11/17/2011 - 13:00 | 1887335 Captain Benny
Captain Benny's picture

On this perspective, I wouldn't be shocked to hear that IBM is either selling a major unit (again) or relocating their headquarters outside of the US in the next year.

Thu, 11/17/2011 - 13:58 | 1887691 clawfoot tub
Thu, 11/17/2011 - 12:58 | 1887328 Waterfallsparkles
Waterfallsparkles's picture

I thought the very same thing.  IBM has been powering the Dow.  I also noticed he bought INTC which has a high weighting in the Nasdaq. 

It does seem like he is trying to keep the Dow up.  It may have something to do with his large Derivative bet on the Dow Futures.  CNBC asked him about that bet.

Thu, 11/17/2011 - 13:03 | 1887360 Caviar Emptor
Caviar Emptor's picture

Whats his favorite motto? "Don't bet against America" He's a literal guy, not prone to misty-eyed enthusiasm

Thu, 11/17/2011 - 12:59 | 1887331 mayhem_korner
mayhem_korner's picture



Stimulus Buffet.  Perfect Thanksgiving moniker.

Thu, 11/17/2011 - 13:00 | 1887332 Johnny Yuma
Johnny Yuma's picture

He was lucky in being at the right place at the right time when accumulating his fortune over the years. The buy and hold theory of the past gets you no where in today's markets however. He may have stayed too long at the party and is doing everything he can to try and keep people believing in him and his buy and hold philosophy. I think he's being persuided by the powers that be to "buy America" for sure. 

Thu, 11/17/2011 - 13:00 | 1887339 Global Hunter
Global Hunter's picture

the world we live in is one where very plausible theories are considered "conspiracy" ones.

Thu, 11/17/2011 - 13:42 | 1887559 Mr_Wonderful
Mr_Wonderful's picture

There is a very clear correlation between gold and the stock market. They go up together and tank together. Dow 6000 next spring will probably mean gold at 6-700.

Thu, 11/17/2011 - 13:01 | 1887343 aleph0
aleph0's picture

The DJIA is the BS-Flag-waver for the J6P'ers.

.. and if it goes down too much , they simply "replace" bad components with new ones.

Thu, 11/17/2011 - 13:07 | 1887348 ebworthen
ebworthen's picture

The Nazi's used IBM technology in the 30's to track down Jews and registered firearms owners.

Perhaps Buffet knows that IBM heuristic software will be used by the U.S.S.A. to control the masses when the SHTF; big government contract will keep the stock humming (?).

Thu, 11/17/2011 - 13:01 | 1887349 baseball13
baseball13's picture

Buffet's BAC 'investment" came only one week after a private meeting with Obama. No possibility of Obama's guaranteeing Warren's BAC gamble?....

Thu, 11/17/2011 - 13:05 | 1887365 Caviar Emptor
Caviar Emptor's picture

Yes. Days later the Federal mortgage refi stimulus proogram was announced. 

Thu, 11/17/2011 - 13:02 | 1887351 Dineroguru
Dineroguru's picture

Does WB still have the naked puts?  Can anyone verify?

Thu, 11/17/2011 - 13:02 | 1887354 alien-IQ
alien-IQ's picture

When a child believes that Santa Claus is coming, it lifts his spirits and that is beautiful.

But when an adult believes it...we have a problem.

Thu, 11/17/2011 - 13:09 | 1887382 Global Hunter
Global Hunter's picture

I went through a period where I was probably grade 1 to 3 where I still believed in Santa Clause because I really wanted to believe but in my head I knew it was fiction.  I think a lot of people are in that phase in regards to the economy...but yes they're adults

Thu, 11/17/2011 - 13:03 | 1887361 b_thunder
b_thunder's picture

Since the Buff has decided to give almost all his money away, i suppose it doesn't matter to him if Berkshire shares rise 25% annually, or 5% annually.  As long as they don't collapse 50%, he'll still be considered "the greatest living investor blah blah blah." 

So, since he doesn't really have a need to outperform like most other money managers, perhaps his stock purchases reflect his philantropy (saving America) rather than 100% persuit of maximum returns


Thu, 11/17/2011 - 13:06 | 1887374 Caviar Emptor
Caviar Emptor's picture

So he claims. Don't be too shocked when you find out what a lifelong sneak means by "almost all" and "giving away"

Thu, 11/17/2011 - 13:04 | 1887362 rambler6421
rambler6421's picture

He's part of the illuminati.

Thu, 11/17/2011 - 13:06 | 1887372 SDRII
SDRII's picture
Mon, 11/14/2011 - 07:27 | 1875108 gangland
Vote up!

Vote down!


buffet goes all in on IBM bought 10 billion 5.5% been buying for 7 months prolly got in at $153

Mon, 11/14/2011 - 07:29 | 1875118 SDRII

Dow patriotism after the NYT jawboning fell flat

Thu, 11/17/2011 - 13:08 | 1887381 Caviar Emptor
Caviar Emptor's picture

It's no shock. The Fed considers the Dow a more sacred symbol than the American Flag, the Great Seal, the bald eagle, Mount Rushmore or the Lincoln Memorial. Because none of those smell money. 

Thu, 11/17/2011 - 13:11 | 1887386 devo
devo's picture

Buffet believes the ECB should act boldly like Bernanke and Paulson. He said this on the record. Frankly, I think he's trying to instill confidence in the market and also feel what it's like to own a tech stock before he dies. He has been wrong many times. That being said, maybe he has inside info on an IBM project that's going to solve Europe. heh

Thu, 11/17/2011 - 13:10 | 1887387 Caviar Emptor
Caviar Emptor's picture

IBM today is more a bet on globalization than the US economy. Most of their revs ceom from oversease now, and they've become an almost pure service company. So you can bet that Warren knows something about a spending package or contract for IBM with some foreign governemnt 

Thu, 11/17/2011 - 13:13 | 1887401 ex VRWC
ex VRWC's picture

Finally got this recorded - a worship song to the DOW!

Thu, 11/17/2011 - 13:16 | 1887407 Shizzmoney
Shizzmoney's picture

Well, Buffet is a progressive (but not completely; this is a man who disowned an adopted daughter for appearing in a film for the heir to the Johnson & Johnson fortune, Jaime Johnson, "The One Percent"), and he is also smart (but not as smart as people think he is).  He's smart enough to realize that the walls are crumbling, and that no matter how oppressive army/police are towards the people, the oligarchy will have a harder deal to defeat the populist throughs.

The internet is making people more aware, which in turn, will make them go for the pitchfroks quicker (and more efficently) when policy doesn't do the work it, in theory, should.

That being said, maybe he has inside info on an IBM project that's going to solve Europe. heh

This leads to this: aren't they going to go forward with the RFID chips in National IDs (and maybe people), soon?  IBM could be a major player in that technology, and its not like they haven't numbered people before:

The Nazi's had a problem (Jews) and IBM had a solution.  It's a profitable business model. 

Kind of what they do.


Thu, 11/17/2011 - 13:25 | 1887447 saiybat
Thu, 11/17/2011 - 13:15 | 1887416 SwingForce
SwingForce's picture

Interesting thought, Peter, but all IBM has to do is split their stock 2 for 1 and the story changes.

Thu, 11/17/2011 - 13:27 | 1887460 BandGap
BandGap's picture

Propping up in this environment is just a way to steal time and formulate a workable exit strategy. Last person out please shut off the lights.

Thu, 11/17/2011 - 13:32 | 1887481 CPL
CPL's picture

IBM hasn't been a technology company for thirty years.


They are a holding company that own technology components but most of IBM's deal is much like GE.  It is and forever will be a holding company.

Thu, 11/17/2011 - 13:37 | 1887530 onarga74
onarga74's picture

How's the gold trade workin?  Deflation my is king-not things

Thu, 11/17/2011 - 13:54 | 1887663 the grateful un...
the grateful unemployed's picture

well IBM isn't going anywhere but BOA's DOW days might be numbered. Leaving the DOW is like getting a fish wrapped in a newspaper, Kodak knows that all too well. in 2009 the DOW dumped Citi and GM, the DOW is the stock cherry pickers delight, the dream team of Booyah. So the real question is, who is going to get dropped, and who will get added because it really matters to these companies (as the PPT buys the DOW not the individual stocks)

my guess for the stock to replace BAC would be MA, Mastercard, the new face of consumer credit. (I expect a consumer credit GSE in the next five years) and why not Goldman? they have no retail, and FDIC protection?

GE is worrisome too, being primarily a hedge fund, or a conglomerate, and conglomerates are real old economy, and hedge funds are de chic.

and they used to have Newmont or Barrick in the DOW? maybe time to restore one of the gold miners. think about it BEFORE CRAMER DOES and you can make some money. little booyahs

Thu, 11/17/2011 - 15:23 | 1888138 ultraticum
ultraticum's picture

Any old fool who goes to a gourmet family run restaurant in Beijing (with Bill Gates) during the early 1990s and orders a cheeseburger and cherry coke, is a buffoon.  A statistical anomaly over an investing lifetime, but still a buffoon.  The proprietor of the restaurant, a charming survivor of both nationalist and communist China who personally cooked/served family recipes from imperial times, told me this story himself.  What an embarassing waste of space is the A-hole of Omaha!

Thu, 11/17/2011 - 15:26 | 1888163 catch edge ghost
catch edge ghost's picture

Knickerbockers trust Warren Buffet morgan ever these days. Saviour money, don't panic. 1907 is the support, beta days lie ahead.


Yeah, that is fun!

Thu, 11/17/2011 - 16:43 | 1888794 Dineroguru
Dineroguru's picture

This is dated, but is he out?

One of the largest impacts on Berkshire's financial statements results from large swings in Berkshire's derivative positions implemented in 2007 and 2008. Berkshire Hathaway sold put options on the S&P 500, the FTSE 100 in the U.K., the Euro Stoxx 50 in Europe, and the Nikkei 225 in Japan. The put premiums collected totaled $4.9 Billion on $37.1 Billion in "exposure" at durations between 12 and 20 years. The puts are European-style options, meaning they are not exercisable prior to their expiration date.

Both exposure and duration are key. First, because the put options are based off indices, the likelihood that Berkshire is liable for the full amount of the put contact is low. We have a lot bigger problems to worry about than Berkshire put liability if any of these indices approach zero. The duration aspect is critical because Berkshire will have the time to put the contract premium to work. Even at a 100% loss on the contracts, Berkshire theoretically could recoup the payoff amount by obtaining a 12.25% annual return. Given Berkshire's track record, this is doable. Thus, the deck is stacked heavily in favor of Berkshire and its shareholders as the first options approach expiration in 2018.

Index Return Payoff (Billions) Required Premium Return -25% $9 3.50% -50% $18 7.70% -75% $27 10.25% -100% $37 12.25%
Thu, 11/17/2011 - 19:31 | 1889603 dolph9
dolph9's picture

When will these geezers finally stroke out?

Fuck Buffett and his worthless fiat stash.

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