US stocks to under perform this year? There a report that billionaires are dumping stocks fast, either to reduce exposure or profit taking.
Warren Buffett- complained of “disappointing performance” in dyed-in-the-wool American companies like Johnson & Johnson, Procter & Gamble, and Kraft Foods. He sold roughly 19 million shares of Johnson & Johnson, and reduced his overall stake in “consumer product stocks” by 21%.
Billionaire John Paulson- dumped 14 million shares of JPMorgan Chase
Billionaire George Soros recently sold nearly all of his bank stocks, including shares of JPMorgan Chase, Citigroup, and Goldman Sachs. Between the three banks, Soros sold more than a million shares.
My take is that they are trying to reduce exposure to consumer related goods. Possibly positioning for more tapering which translate to Companies spending more money on borrowing costs than business expansion costs which equals lower profit margins, lower dividends, and less hiring. Plus, more layoffs.
That market looks way overdone, although markets do have a tendency of staying irrational longer that we can stay solvent. I think its time to shift focus to the Chinese stocks that are still trading below 2008 highs. They eased on the one child policy which might translate to more consumer demand and growth in companies.There have been gains in China’s manufacturing and export sectors. They also want to ease price controls for energy, water, telecom and other services.
On a long enough timeline, the life expectancy of everyone drops to zero.