Jump to content



Photo

Buffett lost $4 billion in single day on APPLE, who will come to his rescue?


  • Please log in to reply
17 replies to this topic

#1 dTraderB

dTraderB

    Member

  • Traders-Talk User
  • 2,627 posts

Posted 03 November 2018 - 08:11 AM

Warren Buffett's Berkshire Hathaway lost more than $3.5 billion on Friday as Apple's stock headed for its worst day on Wall Street in more than four years.

 

Well, this is a rather delicious conundrum: will there there soon be a TRADE DEAL with China that can help APPLE and, by extension, all owners of APPLE shares, including Buffet?

 

Anyway, let's get down to the really important issue: was that failed bear drop on Friday the end of this creeping Crash? 

Yeah, it was a victory for the bulls because SPX bounced off the 2700 support and rocketed 23 points higher, almost 1 %. 

Yeah, it was a creeping crash because ... check your major indices charts.

Yeah, after a spectacular 3-day rally, and on a Friday before a Tuesday election, if all the bears can muster is a paltry 15 point decline then that's it for them, for a whlie.

 

Of course, that's the bull case, but the bears will tell you there is more to come, bear market rallies are brutal, the 200ma still has to be taken out, and Tuesday's election will be a bull killer etc

 

The fact is there are many issues that must be resolved and will affect the market but my analysis is the markets have taken a lots of heavy hits and is still less than 10%  down from record highs. Unless there are abnormal major geopolitical and domestic political issues the markets will rally. How high? Get past the SPX 200ma @ 2765, then 2835.....

 

Warren Buffett loses nearly $4 billion in single day on his Apple stake
  • The Oracle of Omaha's company owned more than 250 million shares of Apple in June, as reported in Berkshire's latest holdings filing at the SEC.
  • Buffett's losses are likely even more painful: he told CNBC at the end of August that he bought more Apple shares since the end of June.

https://www.cnbc.com...pple-stake.html



#2 dTraderB

dTraderB

    Member

  • Traders-Talk User
  • 2,627 posts

Posted 03 November 2018 - 08:14 AM

Yeah, not there as yet, but note the 10-year spiked up on Friday....and 2-year Treasury yield hits level not seen since 2008 after strong jobs report

---------------

Paul Tudor Jones: Rising rates typically cause bear markets, but it's not at the tipping point yet

  • Billionaire hedge fund manager Paul Tudor Jones discusses the possibility of stocks entering a bear market with CNBC's Jim Cramer.
  • Jones says he uses the dotcom boom and the financial crisis as references for his predictions.

https://www.cnbc.com...ping-point.html


Edited by dTraderB, 03 November 2018 - 08:15 AM.


#3 dTraderB

dTraderB

    Member

  • Traders-Talk User
  • 2,627 posts

Posted 03 November 2018 - 08:19 AM



#4 dTraderB

dTraderB

    Member

  • Traders-Talk User
  • 2,627 posts

Posted 03 November 2018 - 08:35 AM

“It’s hardly a stretch to say that the U.S. and China have entered an economic cold war,” writes Bank of America Merrill Lynch’s Joseph Quinlan. “China, in our opinion, is not headed for recession but something perhaps worse: a prolonged and fractious period with the one country in the world that not only has the economic and military firepower to block or forestall the rise of the Middle Kingdom but also is determined, at least on the surface, to do just that.”

That’s bad news for China. But given that the nation accounted for a third of global growth in 2017, “what happens in China doesn’t stay in China,” Quinlan warns. A protracted trade war threatens economic and earnings growth for both countries and the world, something that’s “finally dawning on investors,” he says. When you put it that way, it’s not surprising that markets weren’t able to break out Friday.

Still, in a scary world, many investors may still see the U.S. as the least worrisome place to be. BNP Paribas notes that while this pullback may have further to run, we’re not falling into a bear market, and with little corporate growth in Europe and a negative economic outlook for China, “strong U.S. fundamentals point to ongoing outperformance relative to the eurozone and emerging markets.”



#5 SemiBizz

SemiBizz

    Volume Dynamics Specialist

  • Traders-Talk User
  • 22,814 posts

Posted 03 November 2018 - 10:19 AM

Think of all the $Gazillions IBM spent on buybacks... what was the point?  They sacrificed their credit rating for what? 

 


Price and Volume Forensics Specialist

Richard Wyckoff - "Whenever you find hope or fear warping judgment, close out your position"

Volume is the only vote that matters... the ultimate sentiment poll.

http://twitter.com/VolumeDynamics


#6 alexnewbee

alexnewbee

    Member

  • Traders-Talk User
  • 1,117 posts

Posted 03 November 2018 - 10:54 AM

Think of all the $Gazillions IBM spent on buybacks... what was the point?  They sacrificed their credit rating for what? 
 

For wealth transfer to shareholders. Someone has to hold the ...
"we do G.d's work" Lloyd Blankfein

#7 dTraderB

dTraderB

    Member

  • Traders-Talk User
  • 2,627 posts

Posted 03 November 2018 - 12:56 PM

Summary

C-J simulations suggest a 19.4% chance the S&P 500 Index will end the year down 5% or more from the October close of 2711.74.

The simulations also suggest a 33.5% likelihood the Index will end the year below the December 2017 close of 2673.61.

Finally, the simulation results suggest a 14.9% chance the Index will end the year above the September record high of 2940.91.

“But as we cannot predict such external influences very well, the only reliable crystal ball is a probabilistic one.” - Benoit Mandelbrot

The C-J Monte Carlo Simulation Model

C-J is a Monte Carlo simulation model used to assess risk in the S&P 500. Traditional stock market models suffer from a number of problems including fat tails, serial correlation, and the failure to account for volatility clustering. The fat-tail problem arises because traditional finance theory uses the normal distribution. For investors, the practical implication of such an approach is that traditional finance theory underestimates (and in some cases significantly underestimates) risk in the market.

C-J uses data on valuation, earnings, and short-term historical patterns in the stock market to correct for the problems noted above. C-J does this by using a series of non-normal conditional distributions. If you have read former Yale mathematician Benoit Mandelbrot’s book (with Richard Hudson), The (Mis)behavior of Markets: A Fractal View of Financial Turbulence, then you should note that C-J is fractal by design. And while the model maintains a fractal nature, because of its design it also maintains statistical properties similar to the behavior of the S&P 500 over the last 60+ years.

The purpose of C-J is not to provide a single point estimate of where the S&P 500 will be at some future point. As investors we don’t see the underlying process generating movements in the market, we only see the outcomes, thus explaining why “expert” predictions are often wrong. As Nassim Taleb has written in Black Swan, “Most models, of course, attempt to be precisely predictive, and not just descriptive in nature. I find this infuriating”. To that end, C-J is intended to be descriptive in nature by providing not only a model that corrects for the problems discussed above, but does so in a probabilistic manner.

 

https://seekingalpha...t-2-months-2018


Edited by dTraderB, 03 November 2018 - 12:57 PM.


#8 dTraderB

dTraderB

    Member

  • Traders-Talk User
  • 2,627 posts

Posted 03 November 2018 - 01:01 PM

Market Overvalued Even on Forward Earnings
Carl Swenlin |   

November 03, 2018 at 09:13 AM

 

CONCLUSION: The S&P 500 is well above the normal value range and is extremely overvalued. Historically, overvalued conditions leave the market vulnerable for a large correction or bear market. The current conditions are not a signal for immediate action, rather, it is part of the context in which we should view the market during the process of making decisions. So let's keep in mind that valuations are working against us.

 

https://stockcharts....d-earnings.html



#9 dTraderB

dTraderB

    Member

  • Traders-Talk User
  • 2,627 posts

Posted 03 November 2018 - 01:16 PM

DP weekly Wrap: Not a Good BUY Signal
Carl Swenlin |  November 02, 2018 at 06:39 PM

 

In the Weekly Wrap I have been saying that a short-term buy of SPY should not be considered until the daily PMO turns up. As it happens, the PMO turned up on Thursday, but I must confess that I wasn't thrilled. When the Price Momentum Oscillator (PMO) turns up, we should view it as a possible short-term BUY signal; however, there are plenty of caveats to that statement. For one thing, we want to see the PMO make a smooth bottom after a nice, smooth decline. I have highlighted two of what I consider to be the best looking PMO bottoms on the chart. The problem with the most recent one is that the corresponding price bottom presents as a sharp "V" compared to the more gradual, rounded price bottom in June/July. Bottom line is that the July PMO bottom came a day before the price breakout, whereas the most recent PMO bottom didn't materialize until after the price breakout. Not to mention the problems with the rising trend line, that has now become resistance. I will err on the side of caution and say that the current setup is less than ideal. Pass.

https://stockcharts....buy-signal.html



#10 typicalbear

typicalbear

    Member

  • Traders-Talk User
  • 309 posts

Posted 03 November 2018 - 04:03 PM

Warren Buffett's Berkshire Hathaway lost more than $3.5 billion on Friday as Apple's stock headed for its worst day on Wall Street in more than four years.

 

Well, this is a rather delicious conundrum: will there there soon be a TRADE DEAL with China that can help APPLE and, by extension, all owners of APPLE shares, including Buffet?

 

Anyway, let's get down to the really important issue: was that failed bear drop on Friday the end of this creeping Crash? 

Yeah, it was a victory for the bulls because SPX bounced off the 2700 support and rocketed 23 points higher, almost 1 %. 

Yeah, it was a creeping crash because ... check your major indices charts.

Yeah, after a spectacular 3-day rally, and on a Friday before a Tuesday election, if all the bears can muster is a paltry 15 point decline then that's it for them, for a whlie.

 

Of course, that's the bull case, but the bears will tell you there is more to come, bear market rallies are brutal, the 200ma still has to be taken out, and Tuesday's election will be a bull killer etc

 

The fact is there are many issues that must be resolved and will affect the market but my analysis is the markets have taken a lots of heavy hits and is still less than 10%  down from record highs. Unless there are abnormal major geopolitical and domestic political issues the markets will rally. How high? Get past the SPX 200ma @ 2765, then 2835.....

 

Warren Buffett loses nearly $4 billion in single day on his Apple stake
  • The Oracle of Omaha's company owned more than 250 million shares of Apple in June, as reported in Berkshire's latest holdings filing at the SEC.
  • Buffett's losses are likely even more painful: he told CNBC at the end of August that he bought more Apple shares since the end of June.

https://www.cnbc.com...pple-stake.html

 

Buffet got a $23b tax cut...can we afford it?