buffalonate's Blog

Warren Buffett Wins Big With Bank Of America Stake

buffalonate — Fri, 07 Dec 2012 11:03:24 GMT

Warren Buffett has always said be fearful when others are greedy and greedy when others are fearful. In August of 2011 when everyone was running away from Bank of America's stock Buffett bought $5 billion worth of preferred Bank of America stock at $7.14 with a 6% annual dividend yield. He also got warrants to buy $5 billion worth of Bank of America at $7.14. Now 16 months later Bank of America is trading at $10....

Chipotle Mexican Grill Takes A Beating

buffalonate — Thu, 18 Oct 2012 17:50:41 GMT

Chipotle has now dropped from $442 to $250 in the last 6 months or so. This crash was about as predictable as they come. For awhile this company had a p/e ratio over 50 which is insane for a large restaurant chain. I remember laughing at Jim Cramer when he was arguing that Chipotle was a better stock to own than Buffalo Wild Wings because the same store comps were stronger. Cramer didn't seem to care that the earnings gro...

Euro Pact Is Purely A Marketing Ploy.

buffalonate — Mon, 12 Dec 2011 13:05:58 GMT

The markets recently celebrated Europe's latest attempt to solve the debt crisis. This caused a couple days of relief until people realized that the pact didn't go nearly far enough to solve the problem. Basically the pact says that each country in the European Union has to keep its deficit under 3% of gdp. To provide perspective for us it would mean we couldn't go over a $450 billion annual deficit. That is a decent star...

Chinese Real Estate Bubble Finally Crashes

buffalonate — Wed, 07 Dec 2011 18:23:38 GMT

I have been reading about the Chinese real estate bubble for at least a year now. Time Magazine has had a couple of articles showing completely empty newly constructed cities. They also explained how investing in real estate had become the national past time. People invested all of their money in new real estate investments and it appears crap has finally hit the fan. All of their money is tied up in apartments ...

Congress needs a financial control board

buffalonate — Mon, 21 Nov 2011 13:52:14 GMT

Does anyone really believe that our politicians will ever get our deficit under control. Our only way out of our fiscal mess it to take it out of the hands of the politicians. Politicians don't have the balls to make tough decisions. They only care about not making their core constituency mad so they can get re-elected. What we desperately need is a financial control board that is filled with non-politician...

Italy's Austerity Package is a Joke!

buffalonate — Fri, 11 Nov 2011 15:51:23 GMT

The markets went up big again today after the news that Italy passed an austerity package and economics reforms. You realize that this rally was false enthusiasm when you look closer at the details. They agreed to increase the retirement age 2 years many years from now. They agreed to sell off about 13 billion worth of real estate and to sell off some government owned enterprises over the next 3 years. Wow that is a decen...

Is Italy Default Inevitable?

buffalonate — Tue, 08 Nov 2011 19:44:38 GMT

I just sold all of my stocks today and decided to go short. Italy's debt is 120% of GDP and their bond yields just keep rising and are into junk bond territory now. THE ECB said today that they can't print money so when Italy defaults how are they going to recapitalize the banks again? If Italy balances their budget would that help or are they in a death spiral? The way their bond yields are rising I vote death spiral....

Time To Sell!

buffalonate — Wed, 06 Jul 2011 14:53:17 GMT

If gas prices are high economic growth will inevitably slow. Economist James Hamilton has shown that gas price spikes usually leads to a recession 3/4 of a year later. His work has also proved that a rise in the gas price destroys consumer sentiment. Since we are coming from such a deep recession he doesn't think we are headed back into a recession but he believes high gas prices will definitely slow grow conside...

High Gas Prices Kill Growth, Everytime!

buffalonate — Wed, 08 Jun 2011 19:12:27 GMT

On April 28th I wrote a blog saying that the market was overvalued and that high gas prices would kill the economy. I said that the market would have a big pullback in the next couple of months. A lot of people said that you can't predict the market and it is too random. I would argue that if gas prices skyrocket you can predict the market. Since my prediction the Dow is down 6%. Many economists believe that hi...

Dana Perino For President!

buffalonate — Fri, 03 Jun 2011 20:31:34 GMT

The one thing America needs in a president is someone who is highly intelligent. Personally I am getting really tired of listening to Palin and Bachman stumble their way through interviews and making the facts up as they go. They have been touring around the country and everywhere they go they get called out for rewriting American history. They exemplify stupidity and Republicans can do much better than them. I know they ...

I Called The Pullback!

buffalonate — Wed, 01 Jun 2011 16:59:39 GMT

On April 28th I wrote a blog saying that the market was due for a big pullback due to the market being way too high considering there was high unemployment and high oil prices. I also said I was going to put money into 3X bear etfs until the market pulled back. A lot of people said you can't time the market and you will lose your money in the 3X bear etfs. I was right on both as I called the exact top of the market an...

What Will Power The Future?

buffalonate — Thu, 26 May 2011 21:21:26 GMT

People on here keep trying to argue that solar and wind must be the power of the future. The problem with this argument is that energy experts and power utility ceo's know that this cannot be because they are not reliable. When the wind is blowing and the sun is out they are economically competitive with other forms of power but for them to be used on a wider scale there must be a way to store the power. There isn't c...

Is Cliffs Natural Resources a Bargain?

buffalonate — Wed, 25 May 2011 19:35:59 GMT

I have been searching lately for sectors that are still deeply depressed because I like value plays. I usually don't touch large cap stocks but sometimes the value is too hard to ignore. I was looking into Nucor because I heard that steel production was down significantly from what it was a few years so I thought it would probably be a bargain longterm. While doing so I stumbled into Cliffs Natural Resources. It has a p/e...

Any Oil Shale Experts On Here?

buffalonate — Tue, 24 May 2011 12:57:11 GMT

Oil experts predict that within 10 years U.S. oil production will increase 40% due to hydraulic fracturing in the oil shale. I have been buying the Bakken stocks every time oil prices crash and this has been very profitable for me to play the technicals but I was wondering about the longterm production. I manage about 500K for my parents and I am considering a longterm investment of about 50K into the...

The Most Famous Investing Quotes Of ALL Time!

buffalonate — Sun, 22 May 2011 22:19:13 GMT

http://financialedge.investopedia.com/financial-edge/0511/The-Top-17-Investing-Quotes-of-All-Time.aspx

My favorite Buffett quote isn't on the list. It is that you shouldn't buy a stock that you wouldn't be comfortable owning if the stock market ...

The Fastest Growing Small Retail Chains

buffalonate — Wed, 18 May 2011 21:19:01 GMT

I read Peter Lynch's One Up on Wallstreet several years ago and started looking for the highly successful regional chains that he was a fan of investing in. He believed that small successful chains had a proven blueprint for success and would grow earnings much faster than the larger chains because they had more room to expand. He also believed that the correct way to value a stock was that the p/e ratio should equal the earnings gro...

Ameriprise Financial Is A Scam!

buffalonate — Sun, 15 May 2011 16:44:26 GMT

My mom recently asked me to have a look at her investments and tell me what I thought. I have a TD Ameritrade account so I looked at the Morningstar ratings for her mutual funds and every one had a ranking of 2. Basically they were charging her relatively high fees for very mediocre performance. For example, they were charging her over 1% to be in an index fund when most index funds charge .1%. I also noticed that every o...

Your Best Small and Midcap Stock Ideas?

buffalonate — Sat, 14 May 2011 16:46:33 GMT

I am looking for new ideas for stocks to put in my watchlist. I am looking for companies that have big potential and I am not worried about their current valuation. In the restaurant field I like Chipotle Mexigan Grill and Buffalo Wild Wings and PF Chang's China Bistro. In retail I like Fossil and Joseph S Bank. In technology I like the 3D printing industry with TDSC and SSYS. I also am a big fan of the laser i...

Federal Tax Revenues Rise 18%

buffalonate — Fri, 13 May 2011 10:03:58 GMT

I believe the federal deficit will significantly decrease within the next calendar year. For the month of April the deficit was half of what it was last year. Tax revenues are up significantly. http://www.bloomberg.com/news/2011-05-11/u-s-budget-deficit-narr...

Great Time to Buy Bakken Stocks

buffalonate — Thu, 12 May 2011 09:26:22 GMT

It think the oil exploration companies in the Bakken shale are great companies that are sitting on billions worth of oil. I think they are a great investment for playing technicals or for holding longterm. With oil falling another $2 this morning I think it is a great time to get back into them on the cheap. These companies include EOG, CLR, OAS, BEXP, WLL, and I believe KOG and NOG also own property in the Bakken but I am less...