Wednesday, September 28, 2011

Portfolio Update

Haven't updated my portfolio info on this blog in a while. During this volatile market I was able to acquire some stocks at very attractive prices.

Prem Watsa hedging for deflation


GuruFocus: Yeah, actually there's a question from our readers about the difference between the U.S. and Japan.

Watsa: Yes, there are many differences. But it's the psychological climate that is very interesting to me. I was there in 1988, ‘89 in Japan, and when we asked the Japanese business people, this thing can't last, the markets are so high, the land prices are so high, you know what they said? "We're not like the U.S. We believe in working together, we won't let stock prices come down because we have all our group members owning our stock, and we won't let land prices come down because we'll buy it if anyone wants to sell land." And when you heard that discussion many times, over a week or so, you might actually believe them. You might have thought yourself, my goodness, this can't happen, maybe these guys are different, maybe the market doesn't work here in Japan. And to think today, 10-year government rates have gone from 7-8% to 1%, short term rates to 0%, and the stock market down 75% from 40,000 in 1989 to less than 10,000 today, it's unbelievable to someone who was there in the ‘80s.

Another thing: In the late 1980s, Japanese women, housewives, were taking their grocery money and putting it into the stock market because markets were going up and everyone was excited. Stock prices came down, and for the last10-15 years, Japanese households are only making bank deposits or investing in Japanese Treasury bonds. So the psychology has changed dramatically. And the question is, is the culture different in America that their psychology won't change? That people will continue to spend? House prices are down 50%, stock prices are down, 401k's are down, will they still spend? And my worry is, the answer to that is no. They will start saving, there's already signs of that, and they will be careful about their spending, they will be careful about taking risk, and that is left to be seen. But that's my worry, that psychological change in the American consumer might be taking place right in front of us.

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Tuesday, September 20, 2011

Insiders at BNY Mellon are buying

I am quite bullish on BNY Mellon stock (NYSE:BK) and the stock has fallen 33% since beginning of this year. Its always good to see when the insiders at a company put their own money to buy the stock....its another indication that the stock is a good value.