Comments on: Buffett’s spot-on advice

By: squawkfox » Fawns, Sunflowers, and Links Oh My!

squawkfox » Fawns, Sunflowers, and Links Oh My! — Sun, 26 Oct 2008 17:20:44 +0000

[...] Buffett’s Spot On Advice | Canadian Capitalist [...]

By: Intelligent Speculator » Blog Archive » Saturday Investment Talking

Intelligent Speculator » Blog Archive » Saturday Investment Talking — Sat, 25 Oct 2008 10:49:10 +0000

[...] Canadian Capitalist is commenting Buffet’s investment strategy. [...]

By: Nabloid.com

Nabloid.com — Sat, 25 Oct 2008 06:43:10 +0000

I’m extremely bearish on ANY fiat currency over the long-haul. Currencies do what they have always done, become worth less through inflation.

I agree with Buffett that equities are a better choice (well certain equities anyways ) than holding cash equivalents. I also agree that this major down swing (recession) in the economy and the stock market has brought prices back down to where you can find value (and even some really good bargains!). Now might not be a bad time to buy great companies for a whole lot less than you might have paid two years ago.

That said, I’m concerned about the health of the economy under Obama’s socialist policies for eight years. If taxes spike like he proposes, the incentive to invest in America is almost completely gone for foreigners, like us. Why bother, when there are better places (like here at home) to invest our money?

By: sred

sred — Thu, 23 Oct 2008 19:21:05 +0000

Buffet doesn’t buy stocks just because they’re low. Buffet buys stock of PROVEN COMPANIES which a fundamentally profitable, but which he thinks are just undervalued due to negative market sentiment. Buffet has always stressed the importance of looking for stocks with a continuous stream of dividends, increasing revenus, reasonable debt, and low stock price to earnings multiples.

By: Rita

Rita — Wed, 22 Oct 2008 20:21:14 +0000

Nouriel Roubini predicts the significant contraction in the developed countries’ economies and the real crisis in the developing ones.
I am starting to give a serious thought to liquidating my portfolio if there’ll be any significant bear market rallies. ..Yeah, I know, I know all the arguments against it, but this is not going to be your garden variety recession..
All of a sudden, locking in the losses for tax purposes and buying back the same stocks at some future point (when they will be significantly cheaper) starts to make a lot of sense..

By: Canadian Capitalist

Canadian Capitalist — Wed, 22 Oct 2008 01:50:41 +0000

ETF2X, DAvid: It’s not just price we are talking about here. It is also valuations. Even the broad market sports a dividend yield of more than 3% both in Canada and the US. Compared to just a slightly better rate for bonds. I think odds are very high that stocks will handily beat bonds over the next 10 years. As for the short term, I have no idea. If stocks go lower from here, I won’t be complaining.

Cash Instinct: It is extremely hard to time the markets. Just like you point out, while US stocks are falling, C$ is falling as well. Market timers here should get both the direction of the stock market and currency right. Quite a tall order, if you ask me.

By: Canadian Capitalist

Canadian Capitalist — Wed, 22 Oct 2008 01:43:51 +0000

Phil: Buffett’s mentions in his article that he is buying US stocks in his personal account as opposed to the special preferred share deals that he did with Goldman and GE.

One reason for my excitement is dividend yield on the S&P 500 is now more than 3% compared to just 3.7% for a 10-year treasury. That doesn’t mean yields can’t go higher, just that stocks sport reasonable valuations now.

By: Phil S

Phil S — Wed, 22 Oct 2008 00:14:22 +0000

For me, I would prefer to stay in CDIC insured instruments until I see the macro-economic conditions bottom out. I don’t necessarily mean that we have to wait until we start to see some GOOD news, but more like an ABSENCE of BAD news would be a nice change.

But for full disclosure – that’s also because I work in the manufacturing sector and I could be out of work tomorrow… So, just because I’ve become ultra-conservative in my investing doesn’t mean that some civil servant somewhere with a fat pension would be wrong by buying up a storm right now.

By: Phil S

Phil S — Wed, 22 Oct 2008 00:08:18 +0000

CC. I believe Yve was referring to what Buffett is actually purchasing. For example, he didn’t buy Goldman Sachs’ “common shares” – they issued a new series of Preferred Shares yielding 10% per annum and with a buyback strike price which is about 20% higher than what he paid, and this series of Preferreds is not publicly listed and it’s JUST FOR Warren Buffett / Berkshire Hathaway. We the retail investor cannot get the same deal that Berkshire got. In fact, if we buy Goldman’s common shares, we actually hand over the benefit Warren Buffett because the money raised from the common shares will re-capitalize Goldman Sachs and then they will use the cash to buy back the Prefs back from Berkshire for the aforementioned 20% premium. And Warren Buffett will laugh all the way to the bank, leaving the common shareholder in the lurch because all of the company’s cash will be deployed to meet the punishingly high dividend yield on the remaining Pref Shares. So, of course Warren Buffett wants you to pour your money into Goldman now!

By: ETF2X

ETF2X — Tue, 21 Oct 2008 23:52:21 +0000

David:

In the end you may be right. At this point, I don’t know how comfortable I would be in attempting to determine which companies are not going to cut their dividend.

Another strategy would be to buy a stock that you plan to hold come hell or high water and sell calls on it. However you look at it, this is a very tough market to make money in.