Friday, June 09, 2006

So What Happened Yesterday?

Yesterday, the markets started off with a big slide down. Then, at about noon, it rocketed up to save the day. What happened? Bill Cara, the stock investigator, the guru of the markets, has the clues.
What happened today (Thursday, June 8, 2006) in my view was that, at 5 minutes to 12 noon, a programmed computer trading system issued instructions to sell bonds and buy stocks. An hour later there was a reverse order and five minutes later the order was again to sell bonds and buy stocks.

The dollars were huge, obviously in the billions.

So, who triggered the buying? As Bill finds out- it was Warren Buffett. Maybe not him exactly, or maybe it was just him. Maybe it was fund managers going to the man who could show them a thing or two about investing. Follow the leader as they say.
But the truth could be that Berkshire-Hathaway just happens to be the safest port in a storm for fund managers who are compelled to stay long in equities. If you can'’t go directly to cash, then what'’s wrong with the strategy of parking your portfolio with Warren for a while?

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