There are, however, some Americans paying attention. As in China, it’s the billionaires and elite who have direct access to the puppeteers pulling the strings, and like Li Ka-shing, they have been quietly and rapidly dumping millions of shares of stock:
Despite the 6.5% stock market rally over the last three months, a handful of billionaires are quietly dumping their American stocks . . . and fast.
In the latest filing for Buffett’s holding company Berkshire Hathaway, Buffett has been drastically reducing his exposure to stocks that depend on consumer purchasing habits. Berkshire sold roughly 19 million shares of Johnson & Johnson, and reduced his overall stake in “consumer product stocks” by 21%. Berkshire Hathaway also sold its entire stake in California-based computer parts supplier Intel.
Fellow billionaire John Paulson, who made a fortune betting on the subprime mortgage meltdown, is clearing out of U.S. stocks too. During the second quarter of the year, Paulson’s hedge fund, Paulson & Co., dumped 14 million shares of JPMorgan Chase. The fund also dumped its entire position in discount retailer Family Dollar and consumer-goods maker Sara Lee.
Finally, billionaire George Soros recently sold nearly all of his bank stocks, including shares of JPMorgan Chase (NYSE:JPM), Citigroup (NYSE:C), and Goldman Sachs (NYSE:GS). Between the three banks, Soros sold more than a million shares.
The big money, often referred to as the smart money, is getting out of the game and they are dumping these assets on unsuspecting investors.
They know, for example, that earnings growth has now plunged to its lowest levels since 2012.
As these in-the-know elites unload their positions, average investors depending on their financial advisers to tell them the truth are slamming money into these stocks and paying, in some cases, 500 times earnings. Real estate investors are, likewise, overpaying for homes based on the idea that markets are “hotter” than they’ve been in years.
It’s a recipe for disaster and it won’t end well – at least for 99% of people who blindly believe the opinions of their favorite “experts.”
This article is brought to you courtesy of Mac Slavo.