Forum Archive Index - May 2002

[hugh webber <hugh.webber@clear.net.nz>]

I note in today's Bloomberg that Buffett's Berkshire Hathaway
has just increased its Q1 by 51% over Q1 last year, mainly by
increasing insurance premiums - Ok if u r not an insurance
consumer ;-)

I recall a recent comment that Buffett became rich by using other
people's money. Pardon? Other people became rich by following
Buffett. As the second richest man in the world of umpteen 
billion he doesn't need other people's money. Some years back
with his first vehicle, when he noted the Dow Jones was vastly
overvalued he wound up the vehicle and paid everyone their money
back until the market had crashed and he started up again.

And by the way, I have thought of a way to exploit the herd mentality
and chartists - end of next year when I have some free time and hopefully
Sharechat hasn't ditched its historical posts I'll have a go at it.
I thought I'd construct an index of the number of enthusiastic momentum
chartist posts per day together with a judgment of the degree of enthusiasm
and when this reached historical highs it would be a brilliant sell
signal. Would have worked perfectly for the tech bubble and 1987.

That's what investors need most, good sell signals. Otherwise one is reduced
to noting when brokers reduce ratings from Buy to Accumulate or Accumulate
to Hold.

I note also that the NASDAQ is now 1600. Some months ago I did a crude
calculation that said that the NASDAQ needed to drop to 1000 to be on
an equivalent overvaluation to the Dow at that time (and they both are still
overvallued). Remember when the NASDAQ was 5100? :-)

My heart bleeds for the Westland Council. Despite comment in Sharechat at 
the time that the best investment was in undervalued NZ shares underpinned
by the undervalued NZ dollar they stupidly went to the amateur professionals
at ASB (although the fact it was ASB is immaterial it could equally have been
the amateur professionals at AMP, Money Managers & &) who invested 
them up to the hilt in overseas shares. Now they've lost $1million of their
$4million investment. Twits.

Good shooting,
Hugh


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