This video is a few years old and the economic and buget picture has gotten significantly worse since this story first broke. For all of you who think universal health care is a right, think again as it will break us. We need a solution, no question about it, but not what our current government is recommending. We are broke, it is just that simple. Watch below:
If you follow Mr. Buffet then you already know that he made some significant portfolio changes in his recent SEC filings. Now, I do not recommend following him since he has billions and ‘he’ can afford to hold stocks forever because it is in his corporate account, which means he really isn’t risking his own money. However, his recent moves are very telling, in my opinion.
He sold Carmax, Home Depot, ConocoPhillips, Eaton and other health care stocks. First and foremost it tells me that he expects health care reform, which is not really reform it is a public option, to pass otherwise he would not have sold those health insurers. He sees through the whole cash for clunkers nonsense as it is not a long-term solution for auto sales and it also makes a statement that he feels the consumer is not coming back anytime soon.
His reduction of Home Depot is another vote for the consumer to not return in the near-term and that housing will more than likely stay stagnant for awhile. By selling COP he was simply undoing a bad decision which he took a lot of criticism for to begin with. However, if you want to read into it, means he thinks the energy trade is dead at the moment and prices, which is more my opinion, are going to be flat for sometime into the future which is good news for consumers as fuel costs should remain ‘low’ in the near-term.
His addition of Becton Dickerson and Johnson and Johnson indicates 2 things to me. First, it means that he thinks BDX will benefit from the public option or, in the event it does not pass, that while health insurers are dangerous to own health care stocks are not, which he is right on about. Second, JNJ is a good company that is well diversified and a defensive play, which, again, is right on for this market.
In short, I see this report as bearish as he did far more selling than buying and his buys were defensive stocks. He is buying classic defensive stocks and stocks that would clearly benefit if the healthcare reform actually passes. While I do not mimic his moves, and have no positions in any of those holdings, I think he made some pretty good calls.
Of course my opinion really doesn’t matter, however I did find the moves of interest to how he may view the markets at this time. It looks like he is getting much more conservative even if the media is telling you to jump in with both feet in this ‘new bull market’ which really does not exist. Based on these moves, regardless of you think I am too bearish or not, I would suggest you invest defensively as it is just not me who believes this market is more dangerous than rewarding.
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