No. of Recommendations: 10
Our Rotary club speaker today owns the dominant local wealth management company in our county. He spoke on the recent movements in interest rates, Japan yen-dollar trade and stock market gyrations. He said last week moves were predominantly by big money institutional investors. Monday’s rout included retail investors. He said prices fell hard because there were few takers, essentially the Michael Burry prediction. As you may recall, Burry said when retail investors get scared and reach for their funds held in index vehicles, it will be like trying to empty folks out of large room with mouse hole sized exits, thus prices crashing suddenly. The BAC shares I sold last Wednesday were given a minimum price point requirement, not sell at market because the market felt jittery to my gut.
At $300B+ cash on hand, Buffett, Weschler, and Coombs may have buy instructions in place at tantalizingly low prices on great companies. With the one day settlement requirement, there may be some big fish to catch for those with deep pockets should Burry’s prediction ring true. We, too, can do the same with options and buy instructions.
BTW, our speaker said his firm has approximately 150 widows and 35 widowers as clients, a startling statistic. We men need to take heed to get our estate and financial aspects in order for our longer living brides.
Uwharrie
No. of Recommendations: 8
At $300B+ cash on hand, Buffett, Weschler, and Coombs may have buy instructions in place at tantalizingly low prices on great companies. With the one day settlement requirement, there may be some big fish to catch for those with deep pockets should Burry’s prediction ring true. We, too, can do the same with options and buy instructions.
It's a lot more difficult for them to do it than for us to do it. Because of the large numbers. Basically one day settlement does nothing for them.
Let's say they want to accumulate a meaningful percentage of Metlife. Let's say 20% of it, or about $10B worth. At $68/share, they would have to buy about 147 million shares. That can't happen in a day or in a week or in a month, because not enough of those shares trade each day. So, they have to accumulate slowly, ask for a reporting exemption until they hit their percentage, and slowly buy each day. But they have to be very careful not to overload the bids because the price will immediately shoot up if they do. They might, just might, be able to get half a million shares on most days, and maybe a million on some days. But certainly no more than that. So, after 4 1/2 months, maybe 90 trading days, they could have 50 or 60 million shares, and then they would have to file. nd then everyone knows they are buying in, and the price would likely go up. Volume might also go up. But still to reach 147 million shares will take much longer.
