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. He recently complained of “disappointing performance” in dyed-in-the-wool American companies like Johnson & Johnson, Procter & Gamble, and Kraft Foods.
In the latest filing for Buffett’s holding company Berkshire Hathaway, Buffett has been drastically reducing his exposure to stocks that depend on consumer purchasing habits. Berkshire sold roughly 19 million shares of Johnson & Johnson, and reduced his overall stake in “consumer product stocks” by 21%. Berkshire Hathaway also sold its entire stake in California-based computer parts supplier Intel.
With 70% of the U.S. economy dependent on consumer spending, Buffett’s apparent lack of faith in these companies’ future prospects is worrisome.
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. During the second quarter of the year, Paulson’s hedge fund, Paulson & Co., dumped 14 million shares of JPMorgan Chase. The fund also dumped its entire position in discount retailer Family Dollar and consumer-goods maker Sara Lee
No investors, let alone billionaires, will want to own stocks with falling profit margins and shrinking dividends. So if that’s why Buffett, Paulson, and Soros are dumping stocks, they have decided to cash out early and leave Main Street investors holding the bag.
Google Inc Executive Chairman Eric Schmidt is selling roughly 42 percent of his stake in the Internet search. He plans to sell up to $2.51 billion of his share in the company, according to a Securities and Exchange Commission filing late Friday.
Venezuela devalued its currency, the bolivar, the country’s Finance Minister Jorge Giordani said Friday. President Hugo Chavez ordered the move from Cuba, the minister said.
High-Level Executives Suddenly Dumping JP Morgan Stock En-Masse
Over the last week and a half, high level JP Morgan executives have dumped over $6 million in shares in what experts have described as ‘unusual activity’. Anyone believe JPM’s October 12th earnings report which beat expectations? Looks like accounting BS engineered to dump legacy positions on the general public.
A chorus of high-level executives inside JPMorgan (JPM) are selling down their stakes in the company, in what some experts are citing as “unusual” activity within the nation’s largest bank by deposits.
CNBC reports that JPM execs have dumped $6 million in the past 10 days!