Buffett – The Ultimate Market Mover; Dow Accepts New Members

Calendar February 12, 2008 | Posted by Jorge

This morning, futures shot up after Warren Buffett released an $800 billion (note the b) plan to help bail out the bond insurers (MBI, ABK, and FGIC).  Futures shot up over 70 points on the news.  The offer is good for only 30 days according to Buffett.  As of this morning, it appears that one of the companies has rejected the offer, but he has yet to release which company did.  My guess is it’s FGIC since they’re not publicly traded but you never know.  The dollar and treasury bonds are also spiking on the news, making Buffett the ultimate market mover.  If I had to pick one person to be my mentor in the financial world, he would be the one.

Yesterday, the Dow Jones group decided to remove Honeywell (HON) and Altria (MO) from their index and accept Bank of America (BAC) and Chevron (CVX).  BAC and CVX are better indicators of the US economy according to the index.  The index will also be recalculated in order to ensure the current price of the index remains unchanged.

Markets are looking to gap open this morning.  Potential fade of the gap?

Category Categories: Market Pulse | Tag Tags: | Comments Comments

  • No one seriously thought munis were in trouble, did they? I guess that is why companies like PCR are down... I am not surprised that Buffet swoops in like this. This is his MO.
  • But it works and that's why he's the third? richest man in the world. Take the best parts of a company and trash the rest. He said it himself though. This wasn't a charity case. He's in it to make money.
  • Rob
    Many in the market tend to watch Warren Buffet like a hawk, what I like about him is that he will often go against the general market consensus based on his own thorough research. Lets face it, he's a proven winner year upon year. Something worth remembering - not trading on whims or hear-say.

    He seems able to remove emotional from his trading, basing judgements on the companies long-term value.
  • And that's why he's the man. Looking into the bond offers, he was going to make a killing taking the best parts of the bond insurers away from them. I'm not at all surprised they all said no. It would have been committing corporate suicide.
  • Buffet does seem to know what he is doing. I guess that's why he is worth so much.
  • I'd have to agree with Jason Pearson. That's a good way to put it. "Corporate suicide"... Haven't been to your blog before but this was definitely an awesome read. I will be reading your content on a regular basis from now on. Thanks for the share, mate!
  • Jason,

    Indeed he does. Although a few of us were joking that his stock actually came down just a tad this week. Buy the dip? Hah!

    OTF,

    Not a problem my friend. Thanks for stopping by!
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