5/16/2016 – A positive day with the Dow Jones up 175 points (+1.00%) and the Nasdaq up 58 points (1.22%)
Over the last couple of weeks we have witness a number of headlines from the industry heavyweights.
- First, Carl Icahn revealed that he liquidated his entire Apple position. Something that we predicted on this blog exactly a year ago. Billionaire Icahn Exits Apple Stake After Three Years
- But that wasn’t enough. Mr. Icahn went from being net long to an extremely short position at about 150% net short. As was shown on this blog about a week ago Carl Icahn Is Betting Big on a Stock Market Crash
But here is where it gets interesting. Warren Buffett is buying whatever Icahn is selling.
Who is right?
Both are. I believe it would be little unfair to compare what Mr. Icahn is doing to what Mr. Buffett is doing. It is a bit like comparing oranges to avocados.
First, Mr. Buffett takes an extremely long-term approach. He doesn’t necessarily care what the stock market will do this year or the next. It is more like a 5-20 year time frame. Second, by this point Mr. Buffett and Berkshire Hathaway are the stock market. Entirely too big and slow to move in and out.
Mr. Icahn on the other hand plays an entirely different game. He is a speculator who is small enough, in relative terms, to have the ability to move in and out at his heart’s content. When he sees short-term opportunities present themselves, he takes them.
And that’s the difference. At least based on my analysis. Carl Icahn sees the market a lot lower over the next 12 months. Mr. Buffett might see the same thing, but he is building his positions out with a much longer time frame in mind. Invest accordingly.
This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2015-2017. In fact, when it starts it will very quickly retrace most of the gains accrued over the last few years. If you would be interested in learning when the bear market of 2015-2017 will start (to the day) and its internal composition, please CLICK HERE.
(***Please Note: A bear market might have started already, I am simply not disclosing this information. Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here). Daily Stock Market Update. May 16th, 2016 InvestWithAlex.com
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