09 April 2013

Time To Get Out

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.

First off, if Buffett is leaving the US market, then it’s time for everyone else to follow suit.  Sell of all of your investment items, cash out your retirement accounts, and go buy gold and silver and keep what you buy in your possession.  Or at least hold cash in your possession.  The market is finally catching up with reality, and now it’s time to leave.

Second, and more broadly, it looks like this pretty much spells the beginning of the end.  American dominance, particularly of the economic variety, is drawing to a close.  Get used to living in poverty.