Buffett Too Rich for Buffett Is Sign Bargains Are Gone - News and Current Events | futures io social day trading
futures io futures trading


Buffett Too Rich for Buffett Is Sign Bargains Are Gone
Updated: Views / Replies:129 / 0
Created: by kbit Attachments:0

Welcome to futures io.

(If you already have an account, login at the top of the page)

futures io is the largest futures trading community on the planet, with over 90,000 members. At futures io, our goal has always been and always will be to create a friendly, positive, forward-thinking community where members can openly share and discuss everything the world of trading has to offer. The community is one of the friendliest you will find on any subject, with members going out of their way to help others. Some of the primary differences between futures io and other trading sites revolve around the standards of our community. Those standards include a code of conduct for our members, as well as extremely high standards that govern which partners we do business with, and which products or services we recommend to our members.

At futures io, our focus is on quality education. No hype, gimmicks, or secret sauce. The truth is: trading is hard. To succeed, you need to surround yourself with the right support system, educational content, and trading mentors Ė all of which you can find on futures io, utilizing our social trading environment.

With futures io, you can find honest trading reviews on brokers, trading rooms, indicator packages, trading strategies, and much more. Our trading review process is highly moderated to ensure that only genuine users are allowed, so you donít need to worry about fake reviews.

We are fundamentally different than most other trading sites:
  • We are here to help. Just let us know what you need.
  • We work extremely hard to keep things positive in our community.
  • We do not tolerate rude behavior, trolling, or vendors advertising in posts.
  • We firmly believe in and encourage sharing. The holy grail is within you, we can help you find it.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.

You'll need to register in order to view the content of the threads and start contributing to our community.  It's free and simple.

-- Big Mike, Site Administrator

Reply
 
Thread Tools Search this Thread
 

Buffett Too Rich for Buffett Is Sign Bargains Are Gone

  #1 (permalink)
Elite Member
Aurora, Il USA
 
Futures Experience: Advanced
Platform: TradeStation
Favorite Futures: futures
 
kbit's Avatar
 
Posts: 5,872 since Nov 2010
Thanks: 3,301 given, 3,332 received

Buffett Too Rich for Buffett Is Sign Bargains Are Gone

Warren Buffett gave a nice, simple explanation for why Berkshire Hathaway Inc. (BRK/A) didnít buy back any of its own shares in 2013: The stock just wasnít cheap enough.

Buffett told shareholders in his annual letter that in order to trigger repurchases, the stock would have to trade for 120 percent of book value or less. (A companyís book value refers to its assets minus liabilities, and not the size of the contract Michael Lewis could fetch for writing about it.) Berkshire is trading at 138 percent of book, or a price-to-book ratio of 1.38. The multiple hasnít dipped below 1.2 since 2012.

Of course, price-to-book valuations donít come one-size-fits-all. Ratios far above 1.2 for indexes of consumer and technology companies, even in bear markets, show investors are OK with putting premiums on their brand names, patents and other assets that donít change hands often. And Buffett himself hunts elephants trading far above 1.2 times book, as the takeovers of H.J. Heinz Co. and Burlington Northern Santa Fe LLC show.

Still, with the Standard & Poorís 500 Index knocking on the door of another record, the 1.2 multiple does offer a fun limbo stick to send the market under as you wait for todayís closing bell signalling itís safe to wear white again. (Picture Warren and Charlie Munger in resort wear holding the ends of the limbo stick to participate fully in this exercise.)
Limbo Kings

Though bankers arenít known for dance skills, in this case they are the Limbo Kings. The KBW Bank Index hasnít traded above 1.2 times book since around the time of Lehman Brothers Holdings Inc.ís meltdown in 2008, as the world learned how fast bank assets can morph into ďtroubled assetsĒ and likely wonít forget anytime soon. Itís at 1.09 now, compared with a peak of 3.29 in 1996 and 3.19 near the end of the bull market in 2000. In 2007, it collapsed from 1.99 in February to 1.27 by the end of the year.

There arenít a lot of other dancers on the floor today coming in under 1.2. About 91 percent of the S&P 500 is trading above the ratio, including 11 companies with negative book values. On March 9, 2009, the best day for bargain hunters of this century, maybe any century, almost half were below.

At the peak of the previous bull market in 2007, about 90 percent of the S&P 500 had a price-to-book above 1.2. Among those below the limbo stick then, note why some of them were there: they were falling on their butts. Just look at Countrywide Financial Corp. (price/book of 0.77) and Ambac Financial Group Inc. (1.2). Now, like then, probably all bargains ainít bargains.

In the Nasdaq 100 Index, today there are two stocks below 1.2 times book: Liberty Media Corp. and Vodafone Group Plc., the same number as the 2007 peak. At the bottom in 2009, you had a choice of 19. The entire Nasdaq Compositeís ratio is currently 3.7, still well below the Internet bubble peak of 8.9.

Even after a 14 percent drop from a February record, you wonít find any members of the Nasdaq Biotech Index below 1.2. But maybe someoneís working on a pill for that.

Buffett Too Rich for Buffett Is Sign Bargains Are Gone - Bloomberg

Reply With Quote

Reply



futures io > > > > Buffett Too Rich for Buffett Is Sign Bargains Are Gone

Thread Tools Search this Thread
Search this Thread:

Advanced Search



Upcoming Webinars and Events (4:30PM ET unless noted)

Linda Bradford Raschke: Reading The Tape

Elite only

Adam Grimes: TBA

Elite only

NinjaTrader: TBA

January

Ran Aroussi: TBA

Elite only
     

Similar Threads
Thread Thread Starter Forum Replies Last Post
Buffett Still Buying Stocks, Sees 'Good Value' Quick Summary News and Current Events 0 March 4th, 2013 09:30 AM
Buffett: Zuckerberg Right to Keep Control Over Facebook Quick Summary News and Current Events 0 May 5th, 2012 08:20 PM
Berkshire's Share Buyback: What's Buffett's Strategy? Quick Summary News and Current Events 0 September 26th, 2011 04:30 PM
Buffett May Not Feel Much Love at His 'Woodstock' Quick Summary News and Current Events 0 April 29th, 2011 01:20 PM
Buffett Looking at Investing in India, Other Large Countries Quick Summary News and Current Events 0 March 22nd, 2011 02:00 PM


All times are GMT -4. The time now is 02:01 PM.

Copyright © 2017 by futures io, s.a., Av Ricardo J. Alfaro, Century Tower, Panama, +507 833-9432, info@futures.io
All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
no new posts
Page generated 2017-12-12 in 0.08 seconds with 19 queries on phoenix via your IP 54.163.209.109