I Wonder if Buffett Followers Understand All of This

Buy and hold? Good companies? Well, not exactly. Complicated derivatives? You betcha!

8 thoughts on “I Wonder if Buffett Followers Understand All of This

  1. Now that the financial companys are unravelling from the complex debt web they wove, it looks like the “next” level of companies, led by BRK want to weave their own web to get entangled in.

  2. Mr. Buffett said that he made mistakes in 2008/2009. The mainstream financial media are having their way with him for buying ConocoPhillips at the top of the oil bubble, and then holding all the way down. Maybe they’re right. But, I thought he was the “Oracle of Omaha”, CNBC’s messiah. Shouldn’t he have known oil was about to fall from $147 to $35? The media’s only telling part of the story. I don’t fault him for buying ConocoPhillips. I fault him for not admitting he was wrong early on by setting a stop-loss, and preserving capital to play again tomorrow.

  3. What about the $ billions that he sold in high yield cds in 2006-2007? That was the same trade that blew up AIG. And the 30 billion he piled into long equities at about the same time. Buy and hold my ass. Also, I think that he is grossly underestimating the loss on the sale of his puts. It should have been realized in Q4 of 2008 when the VIX was at 70.

  4. BTW…when I read that he sold puts I did the same trade (smaller size off course) and got stopped out about 7 months ago. FWIW

  5. I can’t help but think that if Warren Buffet would just incorporate initial stop loss orders and trailing stops into his trading, he would be a lot richer now.

    Still. Who am i to tell him what to do.
    Even now he is worth just a little more than me. 🙂

  6. Buffett studied technical anlalysis for years and obviously used such tools in his early days before he got swayed by value investing according to folklore.
    His early investing days were his greatest returns!

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