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Author Topic: Why You Should Never Follow Warren Buffet  (Read 754 times)
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tamo42
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« on: 2011 Aug 30, 03:07:32 pm »



There has been a lot made out of the announcement recently that Warren Buffet bought some stock in Bank of America. The next day, BOA stock shot up at the open and dropped the rest of the day.

These people are suckers.

These people were following the reasoning "Well Warren is a legenday investor, so he must know what he's doing. I'm going to do the same thing."

Again, these people are suckers.

I can hear you saying it, "Why are they suckers." Fair enough, I will answer. It's the second part of their reasoning that is faulty. Buying the common shares of BOA is not the same thing as Warren Buffets' preferred shares that provide a fixed dividend, warrantable stock, and political leverage.

As I've stated in the past, everyone is looking out for himself. The fact that Buffet has the market clout to engineer what I'm sure will end up being a good deal for himself has nothing to do with you or I buying common shares on the open market. This is just like Buffets' 10% yield preferred stock in Goldman Sachs has nothing to do with buying GS stock.

This is yet another reason why blindly following someone, anyone, is so dangerous. You must understand why you are doing what you are doing.

In other words, do you own due diligence (again).
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Neal McSpadden
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dobedo
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« Reply #1 on: 2011 Aug 30, 06:06:25 pm »

Tamo's got a good point. So, how about buying BRK instead?
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tamo42
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« Reply #2 on: 2011 Aug 30, 06:22:03 pm »

BRKa hasn't been doing well in recent years.
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Neal McSpadden
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GhostRider808
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« Reply #3 on: 2011 Aug 30, 08:24:57 pm »

I would NOT be buying Warren Buffets toilet paper.  The market is highly unstable/volatile and will continue to be so unto the future due to gross mismanagement, manipulation, greed,fear, HFT, insider info, flash crash, options expiry etc...etc...
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