MDCigan

Investors' Collective Fears Point to Continued Losses

FWIW, you might read this:

seekingalpha.com/artic...

"Okay... So the $37.1 billion number we hear about as Berkshire's "exposure" is bunk. Berkshire is exposed to that number IF the value of both European, U.S. and Japanese stock markets goes to zero. A true Doomsday scenario that, should it happen, essentially means the end of all economic activity as we know it."


On Mar 10 03:26 PM paultaut wrote:

> MDC: At what point does Buffett's Put Play exceed the value of the
> entire Company if the S&P drops below 400 and his company holdings
> drop the same on a percentage basis?

Investor Capitulation: What to Watch Now

Chris,

I enjoy your insightful articles, and normally I am 99% with you, but not sure on this one that the final bottom has to play out this way with another VIX super-spike. 2002/2003 did NOT play out that way:

runningofthebulls.type...

"I keep hearing and reading that the market will not bottom until there is maximum fear and capitulation selling. This is a commonly held view by many investors. But is it true?

No it is not necessarily. Bottoms can be marked by capitulation selling but bottoms are as likely, if not more so, to be marked by selling exhaustion.

In his excellent book Anatomy of the Bear (which I will get around to reviewing), Russell Napier makes the same observation. Napier concluded that at the end of bear markets in 1921, 1932, 1949 and 1982, bottoms were marked by exhaustion selling, not capitulation selling."

Investors' Collective Fears Point to Continued Losses

Paultaut,

Not sure what Buffett has to do with this article? On the other thread, I think it has been ***REPEATEDLY*** explained to you that the puts are European style exercise and CANNOT BE EXERCISED EARLY. It is irrevelant where the S&P goes in the next 12 months. What matters is where it is 10 and 20 years from now, and if it is at 200-400 in 10 years, it means the U.S and world economy as we know it has ceased to exist, and it is time to learn to hunt and live in the wilderness.


On Mar 10 03:26 PM paultaut wrote:

> MDC: At what point does Buffett's Put Play exceed the value of the
> entire Company if the S&P drops below 400 and his company holdings
> drop the same on a percentage basis?

Investors' Collective Fears Point to Continued Losses

Excellent article Chris! Your approach of blending fundamentals with technicals really resonates with me. Just curious, is their a valuation level where the technicals "go out the window"? S&P 400? 300? 200? Is their a valuation level where the cheapness is so extreme that trend is no longer relevant if one can just wait at least 3-5 years?

ETFs vs. Mutual Funds: The Long and Short (Term) Of It

<i>Actually, no actively managed mututal fund has ever outperformeded its corresponding index over the long term,</i>

This is completely inaccurate. There are plenty of funds that have outperformed over the long-term. Sequoia, Longleaf, Legg Mason Value Trust, etc.