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Dear Ray,
I appreciate your response and I have no position in this debate,only the insight of a long term Buffet watcher and avid reader of every book about him.
I would offer the following:
1.People who take delivery generally have thought out why they are taking delivery and have this cost built in to their profit analysis.
2.Buffet owns an insurance conglomerate and certainly has this figured in as far as insuring his silver.
3.Having seen most of his annual reports for the last 20 years,his usual shorter term investments are his ones that went against him.If this goes against him he would sell.There is a good chance he would buy into the shorts since he has a tendency to average up.
4.This is a very high profile move for him--he does 'need' the money and does not want to be cast as a market manipulater at this stage of his life
Everyone from the Lone Ranger to Ken Roberts to Merryl Lynch has been saying silver is too low for years.With stocks Buffet bought there was a threshhold limit where the world found out what he was doing via the SEC.If it were me I would find out via whatever regulatory agency there is for silver what he is doing and plan accordingly.
Mechanically yours,
John
------------------ Reply Separator --------------------
Originally From: TRaffertu@xxxxxxx
Subject: Re: SILVER....--Another point of view
Date: 02/07/98 00:12am
In a message dated 98-02-06 22:05:31 EST, jvc689@xxxxxxx writes:
<< As a long time Buffet watcher who has made money more often than not
purchasing his stock selections immediately after SEC filings,I tend to
disagree with your viewpoint.
1.Buffet historically purchases for the long haul.
2.His Berkshire Hathaway company is very liquid.
3.Buffet very rarely does the obvious.
4.There is no pressure on him to sell.
5.He hates short term gains. >>
Sorry John, Rick is right, but so is Mr. B. He bought low and is or
will sell high and woe be unto him who chaseth this one.
You wrote in item 1. "Buffet historically purchases for the long
haul." and in item 5. "He hates short term gains." but you also gave the
answer in item 3. "Buffet very rarely does the obvious."
Also you wrote "2. His Berkshire Hathaway company is very liquid."
Liquid enough to manipulate the market, but not to corner it. There is simply
to much supply available. Others have tried and failed. He is too smart to
try this.
"4. There is no pressure on him to sell." Yes there is. He is
actually taking delivery of the silver, not trading futures. This amount of
metal costs a lot to store, insure, assay ship, etc. This all eats into
profits and the longer he holds the more it costs, untill no profits are left.
He knows this too.
He is basically in a box where he has to sell and may be doing so
now. He has to get out before new supply comes in and the costs eat the
profit. For us mortals all that is left to do is short silver before word
gets out that Mr. B. has sold and the price crashes.
Good luck and good trading,
Ray Raffurty
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