Don’t be like Warren Buffett — avoid value stocks for now

[NewsFeeder]

Don’t be like Warren Buffett — avoid value stocks for now

Many prudent investors are gravitating toward value investing, the strategy of finding and buying undervalued stocks. You may find it’s best to avoid concentration in value stocks at this time. It shows that the stock market in May has been slightly below the low band of the resistance zone but is now threatening to penetrate the resistance zone.

https://finance.yahoo.com/m/cf59fed...9/don’t-be-like-warren-buffett.html?.tsrc=rss

 

[Bullitt]

There were plenty of value plays during this drop but two things:

First, the market rebounded very fast off the March low. In 2008-2009, the news was bad every week giving Berkshire time to make deals. Not so much though in 2020 to deploy that $137 billion in cash since the crash that began in March was over less than a month later.

Second, investors should stray from industries that they believe will need a bailout. This is one reason why Buffet dumped airlines. The industry will be changed for the foreseeable future. Why be involved in a company that is dependent on politicians looking to pull the strings? I would classify cruise lines in here along with some oil producers, maybe even movie theaters and some brick & mortar retailers.

FAANG stocks have heavy lobbying to fight off government interference and surely do not need government assistance. It's no wonder they continue to lead the charge.

 

[Bullitt]

The 'smartest' of 'smart' money unveils their report card:

Latest reporting shows Berkshire really did bail out of LUV, AAL, UAL, DAL.

They also unloaded 84% of their GS holdings. Must not have confidence that the ones CNBC's cheerleaders call 'legendary traders' will do so well in a zero interest rate policy world.

BRK also dumped enough USB to fall under the 10% shareholder threshold, lessening their reporting mandate. Still holding onto WFC even though he's been selling some every quarter since 2017. WFC is another stock he said would be worth more 10 years from now in 2017. It will be interesting to see what he does if WFC breaks the March lows. Will he add more?

 

[Bullitt]

Buffett bought $65 million worth of LSXMA from May 21 to May 26. Liberty owns Sirius XM, Atlanta Braves baseball club and Formula 1 racing.

Clearly a play on the forced shutdowns ending and sports returning back to normal if not this season, then next season.

 

[JimmyJoe]

I'm back. Smarter than I was before. I've studied up on moving averages. And investing only what I feel comfortable doing. June may be a different matter. I'll go in with more gusto. Trump will entice more buyers for his reelection. I want 10% more by end of July. So does everyone. May was hardy. The S&P should reach 3400 by Aug 1. It's high at March. Trump will get investors to buy in to get the S&P to its all time high so voting for him will be easy to do. I'm not a real fan of his but wadia got.

 

[Bullitt]

Buffett bought $65 million worth of LSXMA from May 21 to May 26.

I wonder if this is more a play on sports or controlling the media narrative?

 

[Bullitt]

Increased his stake in LSXMA by $85,824,685 more on 5/27. Purchase price of this lot was around $36.15. Previous lot was $32.56.

Looks like buyers really piled in after his first round of purchases.

 

[Bullitt]

Bought $16.8 million more LSXMA on 6/1 at $37.35.

Before this quarter he owned $470.9 million worth of shares. Previous purchase points $38.92, $41.98 (the bulk of his shares), $33.98, $31.36 from 2016 to 2017. His initial purchase was at $31.36.

Not that these "small" purchases will affect his cost basis by much, but my question is, why now? There were a solid two months to pick them up at around $30. Is there really that much red tape that it takes two months to make a buy decision at Berkshire?

 

[Bullitt]

Berkshire adding to their natural gas portfolio by buying Dominion Energy. It is likely the sector will see continued consolidation into 2021.

Interesting you don't see BRK jumping on the renewable energy bandwagon despite the dangers from oil and gas spouted in the main stream media.

https://www.marketwatch.com/story/w...ic-with-nearly-10-billion-purchase-2020-07-06