Billionaires Dumping Stocks

While a correction in the currently inflated stock market isn't "new" news I felt it worthwhile to keep a eye on whether there are further indications supporting it. If billionaires dumping stocks hand over fist is an indicator then I guess the answer is yes.

This is a follow-up to my previous thread Major Stock Market Crash In January. While hypothetical as of yet it has the possiblility of effecting every person holding stocks, whether IRA's, 401K, etc. My hope is besides keeping people aware of the issue that some knowlegable members might offer some options or solutions for folks holding these type funds.

Billionaires Dumping Stocks, Economist Knows Why

Despite the 6.5% stock market rally over the last three months, a handful of billionaires are quietly dumping their American stocks . . . and fast.

Warren Buffett, who has been a cheerleader for U.S. stocks for quite some time, is dumping shares at an alarming rate. Unfortunately Buffett isn’t alone.

Fellow billionaire John Paulson, who made a fortune betting on the subprime mortgage meltdown, is clearing out of U.S. stocks too.

Finally, billionaire George Soros recently sold nearly all of his bank stocks, including shares of JPMorgan Chase, Citigroup, and Goldman Sachs.

So why are these billionaires dumping their shares of U.S. companies?

It’s very likely that these professional investors are aware of specific research that points toward a massive market correction, as much as 90%.

One such person publishing this research is Robert Wiedemer, an esteemed economist and author of the New York Times best-selling book Aftershock.

In 2006, Wiedemer and a team of economists accurately predicted the collapse of the U.S. housing market, equity markets, and consumer spending that almost sank the United States. They published their research in the book America’s Bubble Economy.

You can read the specifics to why Mr Wiedemer predicts this correction will occur in the link above. While I am undecided about all of his reasons I agree with his bottom line assessment, a large correction is a virtually certainty.

The best time for them to dump their stocks is when the stock market is going up. People will be trading and their stock sales won't be so noticeable. Then right at the end, they dump a lot of remaining stock at one time and the market plummets. They buy them when they are low again and start all over.

A few people with money can manipulate the market. It is about retaining a higher ratio of wealth, not necessarily having lots of money. If everyone looses a lot of money and they don't lose much, they get richer compared to others. Say the new richest people have one billion and everyone else rich just has a million, then they have increased their ratio. The working man loses everything and still owes a mortgage. This is a way of correcting inflation, it has happened before.

reply to post by rickymouse


This corrects inflation? How does it correct it? Sounds like socializing loses to me

People should know where to put their this time around, unless the distractions have taken their toll on people's memories since '07-'08.

Gold & silver, Guns & bullets, Food & water

The second wave does the most damage!

Also wait for the bottom and buy stocks when they only cost $1

reply to post by six67seven

Gold & silver, Guns & bullets, Food & water

This is a sentiment I concur with. Many people have their money in employer sponsored 401K's though (like my daughter and son in law.) I have suggested to them that they minimize these contributions for now and buy physical precious metals with that money.

For the money they can't get out of these funds I was thinking cash funds when available. Won't help with the inflation aspects of our economy but might save them during a correction.

reply to post by Bassago


At the same time as they are dumping their stocks they are probably shorting them as well. When (or if) the market corrects everyone with long positions stand to lose a lot of money but people who short the stocks stand to make tons of money if there is indeed a market correction. I would say it is a good move to make but it is a risk I can't afford, along with 95% of the rest of the world.

if this happens food and water will be worth a lot more than gold and silver.....as far as bullets go well that depends on the user's aim

Bassago
reply to post by six67seven

 

Gold & silver, Guns & bullets, Food & water

This is a sentiment I concur with. Many people have their money in employer sponsored 401K's though (like my daughter and son in law.) I have suggested to them that they minimize these contributions for now and buy physical precious metals with that money.

For the money they can't get out of these funds I was thinking cash funds when available. Won't help with the inflation aspects of our economy but might save them during a correction.

I think the price ratio of lead and brass in bullets increased more than the ratio of the increase in the price of gold

reply to post by rickymouse

I think the price ratio of lead and brass in bullets increased more than the ratio of the increase in the price of gold

I should be in good shape then, I have enough to last for years.

Gold is being heavily manipulated by the central banks right now though and don't think we're really seeing it's actual value at the moment. When it finally busts free of them we'll see the real cost.

Not to take away any significance from Buffett's move but he also dumped 21% (same percentage oddly enough) of his consumer stock holdings in Aug 2012. He's a mover and shaker, we know that.

Now, in a regulatory filing dated Aug. 3, Berkshire is reporting about a 21% reduction in the amount of consumer products stocks it holds, even as it ups its exposure to banking, insurance, and industrial stocks.

Source, dailyfinance.com 2012

Berkshire sold roughly 19 million shares of Johnson & Johnson, and reduced his overall stake in “consumer product stocks” by 21%

- OP's source

If Yellen stops pumping would agree with you but is there any indication the FED is going to stop pumping money at O%?

Think you will be eventually be correct on the pm's but 2014 is too early - once they put the breaks on the money pumping sure jump into the pm's but not happening in 2014 especially with the mid term election's in November baring some unforeseen situation like a 9/11 type event.

It is a great time to buy pm's but really don't see any issues with the stock market - this year anyway.

I'm not economist but have gotten the sinking feeling that these movers and shakers are trying to edge their way to the exit with as little notice as possible. Kind of hard to do if they're dumping millions of shares but there seems to be no continued focused MSM coverage of the stock market exits.

Specifically as noted above much of this exiting concerns consumer driven areas. Guess they know they're getting close to bleeding that cash cow out.

Until the Fed stops pumping money & they have been bluffing they will but they can't the economy will crater...do you think Obama will let that happen before midterms?

The Dem's have enough to worry about with Obamacare - do you think they are going to crater the economy on top of that and hand the Senate to the Republicans.

Negative...the Republicans get the Senate and Obama knows impeachment begins about 5 minutes later.
lol

reply to post by Bassago


The banks were behind the raising of the value of gold. They needed to increase the value of their assets to comply with their requirements of their minimum allowable value they have on hand. The best way to accomplish this was to raise the value of gold so the value of their assets increased. They had lost a lot in the collapse of the stock market. So they created a temporary scam and started rumors so the price would rise. It did not cost them a nickel to increase the value of their holdings. This whole economy seems to be a big scam.

Make no mistake, there is no brilliance in these moves by the .01%. When they move, it is due to their deep insider status.

There is no market. There is only the fed.

Reading back that last sentence and seeing it on the screen there in black and white provokes a feeling of sheer terror. The fantastic truth of it boggles the mind. Just the mention of the word "fed" should make women faint and strong men break down and cry. Yet, it doesn't. What a surreal world we live in. I mean, you don't really have to have many synapses firing or look too far to see how utterly hard and vicious we are being screwed.

On another note, it is interesting that Money news re-published this on Jan 2 2014. This story was originally published in June of 2013.

From the linked article:

“Once you hit 10% inflation, 10-year Treasury bonds lose about half their value. And by 20%, any value is all but gone. Interest rates will increase dramatically at this point, and that will cause real estate values to collapse. And the stock market will collapse as a consequence of these other problems.”

Using the CPI calculator on data.bls.gov it shows the following:

2007 $1000
has the same buying power as:
2013 $1124.08

That looks like at least 10% loss in value to me, unless I'm reading it wrong.

reply to post by Bassago


What if I held onto my stock even after stock values plummet and wait for the price to go back up? Can't you do that?

It has been predicted on many threads here on ATS that the current rise in the stock market is nothing but a bubble and it will burst soon. Billionaires dumping stocks should be an indicator to any of us common folk that stocks are about to fall again.

I think the stock market is a rigged game. A small player, someone with less than say $1million, has a good run and doubles there money in a year they will be expected to pay somewhere around 40% of their profit in taxes. The big players, the billionaires, generally only pay around 15% of their profit which is often in billions to taxes.

It does not stop there. If a small player gets lucky and finds a small stock that explodes and makes a killing there assets will be almost instantly ceased for years pending the outcome of an insider trading investigation where they will use the most scanty evidence as proof of insider trading and could possibly face jail time plus confiscation of all their funds. If they can not find any evidence after a few years of investigating then that person will still be expected to pay a large portion of their profits to the IRS.

It is a rigged game!

2x post

Bassago
Gold is being heavily manipulated

The operative word in your statement is "heavily." Unfortunately, the 'value' of everything is being controlled by hidden interests. That is why there is a tremendous risk for hyperinflation ... and I believe the 'free world' is about to enjoy this experience.

You said that you had recommended a departure from 401K contributions and an investment in precious metals. Precious metals are being hoarded at the moment. When these holding are liquidated, there will be a tremendous decline in value. I estimate their prices are inflated at over 400 (maybe 500) times their true values.

When the current crisis (and it is a crisis) is over, values will return to what they were in the early '70s. The dollar will no longer be in circulation. Expect it.

What will survive is production. If you are looking for a sound investment (and remember, anything you have can be taken away) one should be looking at machines that make machines ... and anything related. Investing, alone, isn't going to cut it. Your 'stuff' will get taken away. You better know how to work it, make things, change things, adapt, and improvise ... or you'll be worthless and tossed out with the rest of the old.