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TheDumbMoney (59.34)

Yeah I'm Dumb -- Added 1/3 to BRK/B Today

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19

August 03, 2011 – Comments (14) | RELATED TICKERS: BRK-B , AMZN

Make my day, beyotch.   $73.18/share.  They's mo capital where that came from.  Let us see how much farther these markets drop until the judgment is rendered about whether this is a soft patch or we are entering a double-dip.  Let's look at velocity of money and at TIPS spreads to gauge the likelihood of more Fed easing being announced at the end of August. 

I intend to panic like crazy if we are entering a double dip, but really not sell much.  Anyone who has followed my pathetic rantings knows my portfolio is more positioned for a drop than for significant macroeconomic growth anyway.  I am holding lots of gunpowder if we get a REAL drop.  So far this drop does not have me convinced.  That is because all of the effing growth stocks I really want to buy are actually holding up quite well. 

Blast you, Amazon, why can't you just drop to $150 or so!!!! 

Keeping a very close eye on the watchlist these days....

14 Comments – Post Your Own

#1) On August 03, 2011 at 1:14 PM, Borbality (53.57) wrote:

good to see some conviction. I admire your resolve.

 I added to some of my positions yesterday (morning, before it got really ugly, actually), and plan to just continue adding each month, the amount depending on which way the market moves and how much cash I save month to month. 


I also have a chunk of cash I could deploy if things got really ugly but I'd probably ease into it rather than try to time it with a big lump. 

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#2) On August 03, 2011 at 1:31 PM, TheDumbMoney (59.34) wrote:

Well, it's not really conviction.  I will buy every month as and if we go down.  I'll buy anything I think looks cheap for the long-term.  I bought a bunch of different things in July, but it was all small-ball purchases adding up to just about my average monthly amount.  I'm operating here as an investor, not a trader/speculator.  If I were a speculator I'd probably be taking a position in the Double-Gold Long ETF in anticipation of QE3 or other Fed easing at the end of August.

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#3) On August 03, 2011 at 1:32 PM, rofgile (99.10) wrote:

dumberthanafool:

 I am putting extra capital in the market this week too.  My favorite stock, MTW, is a good deal right now.  It was $22/share just weeks ago (on exuberant enthusiasm from large investors).  STD is also a good deal this week, with an 8% dividend yield.

 -Rof 

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#4) On August 03, 2011 at 1:42 PM, Momentum21 (98.13) wrote:

Some folks wanted out pretty badly this morning!

I will hold off on calling bottoms or tops or candlesticks but there were several pretty sweet swings to accumulate on today...especially in the high beta names. 

You gotta love it when you get that acidic taste in your throat as the panic takes grip!

Deploy your dry powder...and Godspeed : ) 

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#5) On August 03, 2011 at 1:49 PM, TheDumbMoney (59.34) wrote:

As I said on the day the market dropped 300 points on Fukushima news, after a market drop like we have seen in the last week, it is literally all I can do to prevent myself from buying everything in sight.  All the little receptors in my snout are tingling like crazy with all the blood and this little dogshark is ready to bite just about anything that has a ticker symbol. 

That said, I am with difficulty restraining myself, perhaps at the cost of profit, since we could see significant drops over the next month.  And if the economy double-dips and the Fed views it as merely recessionary rather than deflationary we could shed 20% more off the S&P, easily. 

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#6) On August 03, 2011 at 1:50 PM, TMFAleph1 (94.05) wrote:

Looks like a smart move to me.

I'll to pay a 15% premium over book value to own a piece of Berkshire over paying book value for Goldman shares...

 

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#7) On August 03, 2011 at 2:11 PM, TheDumbMoney (59.34) wrote:

We shall see, as always.  I'd certainly rather own stock in the company that had to bail GS out when the fit really hit the shan in 2008. 

More fundamentally, GS pays out (and likely has to) so much of its profit in bonuses to its employees that I'm not sure its fundamental business model is alligned with the interests of shareholders.  It basically limits what shareholders can ever get on the upside, since in any great year it just give out even more in bonuses.  So as an investor in GS one has an upside that is, I suspect, more artificially limited than with other companies, yet one shares all the downside.  That is not my cup of tea.  Imagine if, whenever Berkshire had a great year, it had to pay out tons of money to Buffett and Jain and Munger, etc., to retain them.  That would be insane.  When Berkshire makes a ton of money it shoots elephants with that money, and makes even more money.  I could be wrong.  Maybe I just don't get Goldman Sachs, which is very possible.  But to me it is a fundamentally speculative macro-play, not an investment.  I would own its prefered shares if they paid out enough, or likewise bonds, but I wouldn't own the stock for any significant period of time.

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#8) On August 03, 2011 at 2:45 PM, TheDumbMoney (59.34) wrote:

The counter-argument saying basically dont buy ANYTHING is here.  And he's a professional, I'm not.

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#9) On August 03, 2011 at 2:45 PM, TheDumbMoney (59.34) wrote:

The counter-argument saying basically dont buy ANYTHING is here.  And he's a professional, I'm not.

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#10) On August 03, 2011 at 3:07 PM, Turfscape (40.38) wrote:

rofgile wrote:
"My favorite stock, MTW, is a good deal right now."

Agree. I like MTW and just upped my stake at $13.50/share. MTW has seen some pressure in its crane business, but not to a catastrophic level. And the steady growth in its food service business will help mitigate any potential downside from cranes. A lot of this drop has to do with MTWs debt exposure, I think. But that exposure will continue to decrease, putting Manitowoc in a good long--term position. This one is a buy in my book.

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#11) On August 03, 2011 at 5:41 PM, TMFAleph1 (94.05) wrote:

 I'm not sure its fundamental business model is alligned with the interests of shareholders.

I'm sure it isn't. Don't take it from me; here's what a former Goldman partner said in 2008:

"We are not an investor in that space [investment banks]. I determined many years ago that if you want to make money on Wall Street, you work there; you don't invest there. They just pay themselves too well. I would rather look elsewhere for investment opportunities."

-- Leon Cooperman, The Market's Down Not Doomed, Barron's, July 28, 2008

 

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#12) On August 03, 2011 at 6:43 PM, TheDumbMoney (59.34) wrote:

Well, I tend to understate my convictions a bit.  I'll be a bit more specific: 

First, notice how well Goldman timed its 1999-Bubble-Era monetization, I mean, its IPO:

http://www.businessweek.com/1999/99_20/b3629102.htm

When GS, after 100 years or so, sold itself, that should have been a clear signal to sell stocks generally.  Wow, a lot of that went to insiders, one says.  But I wonder how many of those people continue to hold their shares??

Oh look, Corzine started selling quite a bit, right away, in 2000:

http://www.nytimes.com/2000/07/18/nyregion/corzine-files-to-sell-41-million-of-his-goldman-sachs-stock.html

Oh look, Paulson (not the hedge fund Paulson) sold $500 MILLION in GS stock in 2006.  And, because of him going to work for the government, he got to defer taxes on capital gains when he sold!!!

http://www.marketwatch.com/story/paulson-files-to-sell-500-mln-in-goldman-stock

The guy was therefor undoubtedly the highest paid Treasury Secretary ever.  He saved about $200 million in taxes by taking that gig.

(Those two, by the way, were the two largest single beneficiaries of the original IPO.) 

In short, these guys are way smarter than I am.  If they came to me and tried to sell me water while I was parching in a desert, I would not buy it; I would take it as a sign they had just dipped the water out of an oasis on the other side of the next hill.  If they ever offered to buy a pebble from me, I would take it as confirmation that what they wanted to buy is the Philosopher's Stone and I just don't know it yet. 

They are not omnipotent.  Although they offloaded most of their housing-bubble CDO risk, per Michael Lewis, they failed to contend with the fact their idiot counterparties might go belly-up.  But in general, the only way I feel like I or any dipsquit individual investor can ever make any money off of Goldman Sachs is if GS and I enter into a serious long-term contract to ignore each other totally.  Of course, it did feel great indirectly owning for a time an infintesimal piece of those sweet preferred shares GS issued to Berkshire in its moment of greatest panic. 

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#13) On August 03, 2011 at 6:50 PM, TheDumbMoney (59.34) wrote:

That's a great quote though, I'd never heard it said that explicitly.

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#14) On August 04, 2011 at 1:16 AM, awallejr (80.13) wrote:

I am looking at XRX again.  Under $9 I have added.  They plan on using free cash flow to buy back stock which literally could amount to half its outstanding shares.  To me this is a no brainer and a gift.  Take it.

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