1/20/2005

Warren Buffett sees nothing but down for the dollar. Bullshit. He's trying to talk the dollar down because he's in stocks that are being hammered by a rising dollar. He doesn't have a very good track record on individual stocks. He's made all his money buying entire companies and installing his people in them in an advisory role. He lost nearly a billion in silver four or five yearrs ago, his stock portfolio lost a staggering ten billion in 2001. He lost big time when he got into the airline business. He has large holdings in two major banks that may have bet incorrectly on the dollar, something they've done before. He is said to be a major foreign currency holder and a rising dollar will hurt him badly. He made another bad bet on the trade deficit. Buffett has held some of his stocks for decades and he has a small---for him---holding in a foreign company. Reportedly he is sitting on $27 billion in cash because he feels the market is over valued. The action has been in the small cap stocks---S&P 600 and Russell----and he buys very expensive stocks. The dollar has bottomed.
Response to emails Re; the 27bil. You can't believe everything you read but Buffett has a difficult time buying stock without moving the market. You cannot just buy 27 billion dollars worth of anything. The genius of Peter Lynch, the fund manager at Fidelity, was his ability to buy or sell huge quantities of stock or bonds without disturbing markets. How he did it is public knowledge should you want to know.