Cash Is King Stocks Forecast

July 7, 2014

World's richest man (Warren Buffett) is building and hoarding cash.

Warren Buffett's Berkshire Hathaway’s cash hoard has surged 30% to nearly  $50 billion since the end of 2011.  

One must ask WHY the World's richest man is piling up the cash hoard if all is hunky-dory in the stock market. Why is Multi-Billionaire Buffett dumping stocks from his investment portfolio to build a record cash level to nearly $50 billion?!

To try to clarify this Cash Conundrum, let's take another careful look at WHY the world’s richest man is building cash to record levels.  Methinks that the sly Oracle of Omaha has been aggressively building a giant cash pile (by selling stocks) in anticipation of the forth-coming stock market decline of substantial magnitude. And that’s just classic Buffett.

It's worth your financial while to read:

Stock Market Forecast By Market Cap/GNP Ratio

Buffett's sly facial expression is saying:

"I KNOW SOMETHING YOU DON'T KNOW!!

Ominous Signs For Stocks Forecast Lower Prices

Stock Market Forecast By Market Cap/GNP Ratio

Warren Buffett has accumulated $50 BILLION IN CASH…and here are the principal reasons why:

  • The GNP results for this year’s 1st Qtr. were sadly disappointing.

  • The present Bull Market in stocks is very long in the tooth…with many stocks grossly over-valued.
  • Buffett’s Berkshire Hathaway stock dropped -53% in the 2007-2008 correction, while the Dow Index fell -52%...and he fervently desires to avoid the same miscalculation this time around. See the 2007-2008 Stock Market Crash results:
     

The writing is on the wall:  The 1st Qtr change in Real GDP was negative…down 2.9%.  In deed and fact it was a greater decline than the two drops in Real GDP in early 2008, which heralded horrific stock market crash when Billionaire Buffett’s Berkshire Hathaway investment portfolio plunged -53%.  We can be sure gifted guru Buffett anticipates the emergence of another Bear Market in stocks. Evidence of this that he has accumulated $50 BILLION in cash by taking profits and  selling into the all-time records highs registered by the Dow and S&P500 indices. Obviously, the legendary investment genius plan is to Buy Low when stocks finally bottom in the forth-coming Stocks Bear Market.

Would that today’s overtly greedy and naively complacent investors could recognize the artificial levitation of today’s stock prices…created by Fed “magicians” to deceive naïve investors. Famed analyst Adam Hamilton expressed it well:  “With each passing day, the overvalued, overextended, and over-loved stock markets get closer to their inevitable reckoning. Today’s market conditions are right up there with the riskiest ever seen at past major toppings! So don’t be lulled into complacency by June’s latest nominal records, most key indicators are still unanimously screaming “topping”. Couple the extreme complacency with the dicey state of the economy, and it won’t take much to spark a serious selloff.”

One of history’s greatest thinkers and philosophers was German Johann Wolfgang von Goethe, who said:  Genius is knowing when to stop! 

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Founder of Gold-Eagle in January 1997.  Vronsky has over 42 years’ experience in the international investment world, having cut his financial teeth in Wall Street as a financial analyst with White Weld. Vronsky speaks three languages with indifference: English, Spanish and Brazilian Portuguese.  His education includes a degree in Petroleum Engineering from the University of Oklahoma, a Liberal Arts degree from Hartnell College and a MBA in International Business Administration from UCLA – qualifying as Phi Beta Kappa and Tau Beta Pi for high scholastic achievements.  Vronsky believes gold and silver will soon be recognized as legal tender in all 50 US states…and many countries worldwide.  You may reach I. M Vronsky at: vronsky@gold-eagle.com and/or vronsky@bellsouth.net

One ounce of gold is so ductile it can be drawn into a wire 50 miles long