Know When to Fold'em: When Is the Right Time to Sell a Stock?
There's one word in every stock market movie ever made that's never uttered in a normal tone of voice. Never merely said, but rather shouted.
That word is SELL!
Indeed, no other word in the financial lexicon is so often associated with market uncertainty, investor fear, or in the worst case, outright panic . Truthfully, I can't recall a single film in which the protagonist calmly decides to sell based on reasoned analysis.
Of course, that's the case in movies because it makes for stronger plots - ones propelled by high drama and intense emotions. But all too often, it's much the same in real life.
And it shouldn't be.
Playing 'Follow the Guru' Can Be Fun – and Profitable – for Investors
If you wanted to distill all the world's best investment advice into a single sentence, it would probably come down to this: Follow the leader.
We've whittled the investing wisdom of these three stalwarts - and others - into 15 rules to live by. We offered the first five rules in Part I of this story, which appeared yesterday (Wednesday). Here in today's second installment, we offer the final 10 rules.
Playing 'Follow the Guru' Can Be Fun – and Profitable
If you wanted to distill all the world's best investment advice down into a single sentence, the result would actually be fairly simple:
The Investing Secrets of Warren Buffett
Investing icon Warren Buffett is known for the market-beating returns that his company, Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B), has returned over the past few decades. His success is due to some very simple investing strategies that he adheres to religiously. Here are 10 of his best:
MetLife Closing in on AIG's Alico Unit
MetLife is reportedly negotiating to buy the American Life Insurance Co. from its parent American International Group Inc. (NYSE: AIG). The deal would give MetLife more exposure to Japan and assist AIG in paying back the billions of dollars it owes to the government.
Under the terms now being discussed, MetLife would pay $14 billion to $15 billion for American Life, commonly known as Alico, The New York Times reported. At least $9 billion of that sum would immediately go to the Federal Reserve Bank of New York to redeem preferred stock now being held in a special-purpose vehicle. Additional proceeds would go toward paying down part of a separate, $35 billion credit facility from the New York Fed.
Acquiring Alico would give MetLife a strong presence in Japan where an aging population offers fresh growth opportunities. Alico had about 200 offices, 4,600 consultants or employees, and 10,000 agencies in Japan as of March of last year, according to The Wall Street Journal. The company generates about 70% of its revenue from the Pacific island.
How to Profit in Any Kind of Market
When it comes to the global financial crisis, many so-called "experts" think the worst is behind us. But I don't buy it.
And I'm not alone.
Just look at what some other big-name investors - each also known for their independent thinking - are saying or doing right now:
- Bond king Bill Gross is nervous and raising cash.
- Author, commentator and global-markets guru Jim Rogers has repeatedly said that he's not investing in stocks anywhere in the world right now.
- Hedge-fund heavyweight John Paulson is moving aggressively into gold.
- And investing icon Warren Buffett - never one known for tipping his hand - is candidly stating that the U.S. financial-crisis cleanup is far from complete. The fact that he's reportedly buying more shares of Korean steel dynamo Posco (NYSE ADR: PKX) would punctuate this point.
This kind of uncertainty can be paralyzing, making it tough to decide where - or even if - we should deploy our investments.
Fortunately, we've been here before. And what we learned will allow us to profit no matter what the financial future holds for the U.S. marketplace.
To learn the four secrets to investing success, please read on... Read More...
- Bond king Bill Gross is nervous and raising cash.
With His Rebuke of Kraft, Buffett Reminds Wall Street That Shareholders Come First
A decade ago, investing guru Warren Buffett helped torpedo a $15.3 billion Coca-Cola Co. (NYSE: KO) bid for Quaker Oats Cos., arguing that the terms were lousy and the proposed price way too high.
Now Buffet is causing similar complications with a Kraft Foods Inc. (NYSE: KFT) plan to buy Britain's Cadbury PLC (NYSE ADR: CBY), announcing that he's wholly opposed to a plan to issue as many as 370 million Kraft shares to get the deal done. As Kraft's largest shareholder - Buffett's Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B) owns 9.4% of Kraft's common stock - his opinion is likely to carry the day.
Wall Street is furious: Deal fees are not as easy to come by as they used to be, and this transaction promised to be especially juicy - thanks to the spin-offs and share issues Kraft is doing to get the buyout done. Some of those maneuvers won't now be necessary, and if the transaction does get done it will be finalized at a lower price.
From the outset it was clear to me that the Kraft/Cadbury deal represented "managerial capitalism" more than it did shareholder capitalism. And in that battle, I know which side I am on.
I'm with Warren. Read More...
SEC Filing Shows Buffett Played It Safe Ahead of His Burlington Northern Buyout
Having gone “all in” on a U.S. economic recovery with his $44 billion acquisition of Burlington Northern Santa Fe Corp. (NYSE: BNI), Warren Buffett showed a less aggressive stance in Berkshire Hathaway Inc.'s (NYSE: BRK.A, BRK.B) Nov. 16 filing with the Securities and Exchange Commission (SEC).
Buffett trimmed Berkshire's holdings in riskier businesses that have uncertain futures, such as newspapers, healthcare companies, and credit ratings agencies in favor of more stable long-term picks such as Wal-Mart Stores Inc. (NYSE: WMT) and ExxonMobil Corp. (NYSE: XOM).
The 13-F filing showed that as of Sept. 30 Berkshire had increased its Wal-Mart holdings by almost 90% over the summer, adding 18 million shares worth nearly $1 billion. Read More...
- Buy, Sell or Hold: Buffett's Berkshire Hathaway Inc. Has Been Masterfully Managed and Will Continue to Benefit Investors Last year, on Aug 25, I recommended readers start buying shares of Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B) in incremental amounts until the end of 2008. I emphasized that Berkshire should be a core, long-term holding in investors’ portfolios and not a stock to trade in and out off. Today, the stock is about 11% […] Read More...
Buffett Bets on Bright U.S. Economic Future With Burlington Acquisition
Warren Buffett believes in the United States' economic future, and yesterday (Tuesday) he put his money where his mouth is.
Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B) acquired railroad Burlington Northern Santa Fe Corp. (NYSE: BNI) in a deal valued at $44 billion, the largest in Berkshire's history.
Berkshire, which already owns 22.6% of the company, will pay $100 per share in cash and stock for the remainder of Burlington's business. The offer values Burlington stock at a 31.5% premium to its Monday close. The deal, expected to close in the first quarter of next year, includes $10 billion in Burlington debt. Read More...
- The Technology That Will Replace 148 Billion Barrels of Oil Not many investors noticed in September 2008 when Warren Buffet took a 10% stake in Hong Kong-based battery maker BYD Co. Ltd. for $230 million. They should be noticing now. Shares in BYD, which also makes cell phones and automobiles, have quintupled in a little more than 12 months, meaning that Buffet's investment is now […] Read More...
- Moody’s Strips Its Biggest Investor of Top Credit Rating By Don Miller Associate Editor Money Morning Moody's Investors Service (MCO), today (Thursday) cut Berkshire Hathaway Inc.'s (BRK.A, BRK.B) top-level Aaa credit rating by two notches, despite Berkshire chief Warren Buffett's status as the ratings agency's biggest shareholder. Moody's was the last major ratings agency to downgrade the Berkshire, after Fitch Ratings Inc. stripped […] Read More...
- Buffett Bargain Hunting Despite 2008 Losses By Jason Simpkins Managing Editor Money Morning Famed investor Warren Buffett didn't fare much better than anybody else in 2008. But the Oracle of Omaha remains optimistic, convinced that investors who brave today's fierce financial tempest will be rewarded in the long run. "I've been buying American stocks," Buffett said in an editorial in The […] Read More...
- Jim Rogers and Warren Buffett at Odds on Fannie/Freddie Bailout By Jason Simpkins Associate Editor Few analysts have abstained from voicing an opinion about the U.S. government's plan to seize control of Fannie Mae (FNM) and Freddie Mac (FRE), the nation's embattled mortgage behemoths, and that include such eminent investors as Jim Rogers and Warren Buffett. Of course, two of the world's greatest financial analysts […] Read More...