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Ride the Coattails of the Investor Packing 32,000% Returns

Warren Buffett is an idiot.

Well, not really. But that’s the rumor circulating across the internet these days. Buffett’s famed Berkshire Hathaway is down double-digits on the year. And whenever Old Man Warren hits a rough patch, the haters come out swinging.

Never mind the fact that Buffett never stays down very long. Or the fact that those mocking the Oracle of Omaha will never taste even the tiniest fraction of the investing success he’s enjoyed for decades.

Instead, this is all we hear…

He’s losing money right now! Look at this buffoon!

But is it really stupid to invest alongside the guy who’s such a buffoon that his fund is up something like 32,000% since it first opened fifty years ago? Didn’t think so…

Still, Berkshire Hathaway is down about 12% on the year. But Buffett couldn’t possibly care less about this measly drawdown. The guy’s probably guzzling his third Cherry Coke of the day right now and laughing his ass off over all the hysteria around his recent lackluster performance.

Berkshire Blinks

The positions that are eating away at Buffett’s profits are pretty obvious at this juncture, too.

“Berkshire took big paper losses in the quarter on its position in IBM Corp., which last month reported a drop in earnings and issued a weak outlook. Shares of IBM are down 17% year to date,” MarketWatch reports. “And Berkshire’s stake in Walmart clearly has not had an easy ride; those shares have skidded 33% with just several weeks left to go for 2015.”

But instead of piling on the “Bash Buffett” bandwagon, let’s break down some of the Oracle’s most recent moves and see if we can learn something from the ultimate investing guru…

The first thing we’re looking for is any position Buffett been selling recently. And according to just-released SEC filings, Berkshire is sneaking out of a couple of big positions.

“As of September 30, Berkshire owned just under 11 million shares of Goldman, down from around 12.6 million on June 30,” Business Insider reports. “Berkshire’s Walmart stake also totaled 56.2 million shares, down from around 60.4 million at the end of the second quarter.”

Kudos to Warren for dumping some of those Walmart shares. That’s one nasty chart I wouldn’t touch with a 900-foot pole. On the other hand, this Goldman Sachs position isn’t helping or hurting Berkshire. The stock is barely negative so far this year.

Listen, the Sage of Omaha didn’t earn that handle for nothing. If you want to make some money, you’re better off riding his coattails than the guy on the internet who’s probably lost more money than he’s made.


Greg Guenthner
for The Daily Reckoning

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Greg Guenthner

Greg Guenthner, CMT, is the editor of Opening Bell Fortunes and Seven Figure Signals. He has been with Agora Financial/Seven Figure Publishing since 2005. In 2019, the average position in Greg’s Sunrise Fortunes portfolio outperformed the S&P 500 by 1.65x.

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