Wednesday, October 1, 2008

GE and Warren.

Given the news that has just hit the tape that Mr. Buffett has now become a significant shareholder in GE, I thought it fitting to have another look at the chart. The chart of GE (above) contains my comments I made back in June of this year.

I realise Mr. Buffett and his track record have been deified by the financial media. With that being said I look to the chart for answers and the GE chart does not look good. I see nothing that has changed in the pattern since I last posted on it. We see a fairly orderly continued succession of lower highs and lower lows. I would surmise the lows of mid Sept to be taken out in due time.

I will say without equivocation that the $18-18.50 area had better hold for Mr. Buffett or the fireworks could really get started. I also realise many out there, always looking for someone to think for them, will be jumping headfirst into GE following Mr. Buffett's lead. As for me, I am neither long nor short of GE but am inclined to hold out for $8 level. Crazy huh !

I also heard over the last few days that Mr. Buffett would not have made his investment in Goldman Sachs if he thought the government wouldn't pass the bail out bill. I am shocked that he is operating in this fashion. I would assume the same logic would probably apply to this foray into GE. This seems to me to be a very strange predication for plunking down some major bucks into the equity markets. But hey, who am I to criticize, the oracle of Omaha.

Good speculating to you all and never forget that "an investor is a speculator who made a mistake and will not admit it".

Open Positions:
Long 1 unit of Spdr Gold ticker GLD @ $86.85 stop at $83.59
Long 1 unit Ultrashort 20yr Treasury ticker TBT @ $60.50 stop at $57.32
Long 2 units of Ultrashort S&P ticker SDS @ 61.75 stop at $57.69
Long 2 units of Ultrashort Dow ticker DXD @ $57.85 stop at $53.79
Short 1 unit Int'l Bus Machines ticker IBM @ $129.05 stop at $126.36
Short 2 units of Apple ticker AAPL @ $178.05 stop at $177.76
Short 2 units ticker CRM @ $56.05 stop at $60.62
Long 2 units Hecla Mining ticker HL @ $5.20 stop at $3.89


Mike said...

The logical part of me says that if history is of any gauge, one would have to think that Mr. Buffett is just doing what he has always been doing, investing in undervalued businesses.

But, the skeptical part of me says perhaps Mr. Buffett is so afraid that this crisis will hurt Berkshire-Hathaway so much that he has to take drastic steps to restore confidence in the markets.

I guess only time will tell.

Harleydog said...

agree as his track record speaks for itself.

as for me I look at the charts and interpret GE much differently than the old sage.

that is what makes the markets.