Despite recent reports that the housing crisis is leveling off, unemployment is stabilizing, and the market has rallied a historic 6.5% in the past few months, a few savvy billionaires are quietly moving their money out of U.S. stocks . . . and fast!
Billionaire investors know what they’re doing and can often predict outcomes well before anyone else. And when they do the opposite of everyone else, it’s wise to take notice. So why are these investors so quick to move their money out of U.S. companies?
Could these professional investors be aware of very specific research indicating a massive market correction… as much as 90%?
Warren Buffett, an outspoken advocate of American stocks, is dropping his shares at an alarming rate. The reason stated was “disappointing performance” in U.S. companies like Procter & Gamble, Johnson & Johnson, and Kraft Foods.
Buffett’s company, Berkshire Hathaway has been drastically reducing exposure of certain stocks dependent on consumer purchasing habits. Berkshire sold approximately 19 million shares of Johnson & Johnson, thus reducing the overall stake in “consumer product stocks” by 21%. In addition, Berkshire Hathaway sold its entire stake in Intel, the California-based computer parts supplier company.
70% of the U.S. economy is dependent on consumer spending. However, Buffett’s obvious view of these companies is troubling to say the least.
As it turns out, Warren isn’t alone.
Billionaire investor, John Paulson, who made his fortune during the mortgage meltdown, also reduced his U.S. stock market exposure by selling 14 million shares of JPMorgan Chase. His hedge fund company also got rid of its entire holdings in Family Dollar and Sara Lee.
Even George Soros sold almost all of his bank stocks, including Citigroup, JPMorgan Chase, and Goldman Sachs. Of these three banks, Soros sold over a million shares.
So why are these billionaires so quick to drop their shares of U.S. companies?
The market is at a historical high. Real estate prices have leveled, and are even rising in many places. What’s more, the unemployment rate even seems to have stabilized.
Could These Investors Be Aware Of A Massive Stock Market Correction, As High As 90%?
New York Times bestselling author, Robert Wiedemer, and world renowned economist, Harry Dent have been publishing this research for years. And if you think a 90% drop in the stock market is unrealistic, consider their successful prediction track records:
In 2006, Wiedemer predicted the collapse of U.S. housing markets, equity markets, and consumer spending that nearly bankrupted the United States.
Dent successfully predicted the recession of 1990 to 1992, the BIGGEST bull market boom in U.S. history, even the credit crisis, and stock market crash of 2008.
It starts when the Federal Reserve floods the economy with a massive amount of debt based money it prints out of thin air. Although these funds haven’t yet made their way into the U.S. economy, it is mathematically certain that when they do, hyper-inflation will occur.
At just 10% inflation, a 10-year treasury bond will lose approximately 50% of its value. And at 20% inflation, the value shrinks to almost nothing. At this point, interest rates rise, and this causes real estate values to plummet. As a result, according to Harry Dent, these problems will contribute to the stock market to dropping all the way to 3300.
Wiedemer explains why Soros, Buffett, and Paulson are quick to dump U.S. stocks:
“Companies start spending more on borrowing than business expansion. This lowers profits, lowers dividends, and reduces hiring. Additionally, it means more corporate layoffs.”
No investors, especially billionaire investors, want to own falling stocks with shrinking profit margins and dividends. If this is the reason why Buffett, Paulson, and Soros are reducing their exposure, they are cashing out early while leaving Main Street investors to take the loss.
However, individual investors don’t have to lose their investments and retirement savings.
Buffett’s company, Berkshire Hathaway, utilizes a comprehensive wealth preservation blueprint for economic survival that deserves global attention.
Previously available only to institutional investors, banks, and insurance companies, this little known investment alternative preserves principle and guarantees returns without any ties to the stock market.
While major brokers and financial institutions don’t generally offer the public information on these types of wealth enhancement alternatives, they are available to individual investors and a few are starting to take notice. The primary concern is that most Americans will be left in the dark when the stock market crashes and lose everything they’ve worked for over their lives, if Wiedemers’ and Dent’s predictions come true.
Naturally, this is a scary thought. But the average American needs to be prepared in this sudden age of job loss and economic uncertainty.