Billionaire Investors Warren Buffett, John Paulson, And George Soros Quietly Dump U.S. Stocks. Why?
Saturday, October 12, 2013
By Mike Durand
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 its 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 Much 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 falling all the way to Dow 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.
Individual Investors Don’t Have To Lose Their Retirement Savings.
There are many financial institutions and commission based brokers offering real estate, stock options, and other investment opportunities that fluctuate in value depending on market and economic conditions. So investors need to be very diligent when researching their options.
Buffett’s company, Berkshire Hathaway, utilizes a little known wealth preservation strategy for economic survival that deserves global attention. This lesser known alternative asset class is called Life Settlements.
Major brokers and financial institutions generally don’t offer the public information on this alternative asset class, and for a variety of reasons their popularity is catching on as individual investors take notice. Less than 15% of financial professionals are familiar with this asset class.
You can register for a no cost or obligation portfolio review from Durand Financial by entering your contact information below and to learn more about how to safeguard your portfolio from the looming stock market crash. You’ll also receive a free report titled, Making the Case for Life Settlements. Life Settlements are an alternative asset class only available to accredited investors.