Buffett in Annual Letter: America the Golden Goose Will Continue to Lay Larger Eggs

I know some of you dislike Warren because of his political leanings. All that aside, the man is a living icon. Although aging and his performance at Berkshire has been less than optimal, you’ve got to both love and admire his ceaseless optimism for America.

“For 240 years it’s been a terrible mistake to bet against America, and now is no time to start,” Buffett said. “America’s golden goose of commerce and innovation will continue to lay more and larger eggs.”

The 2015 Berkshire Hathaway annual letter can be read here.

I once went through a phase of watching foreign films. Sometimes I wonder where I found all this time to entertain myself.

This is one of my favorite samurai movies of all time, with an unexpected and unique twist at the end. I won’t ruin it for you by revealing too much.

If you want some action, great dialogue, albeit via captions, with a mysterious ending, go see this film.

Stocks edged crept lower throughout the day, as profits were taken and men of industry ran for the hills, ever so quietly. Although I’m cautiously pessimistic about the market, I do think, however, it can rally through April. Nevertheless, my selling is done and I have zero equity exposure.

For the year, thus far, long TLT and trading the oversold signals of Exodus, I am up 1.35%.

NOTE: Tonight at 7pm, Vince aka RAUL will be doing a demo for the Exodus market intelligence platform. For those of you who are on the fence about joining the league of men, purchase a ticket and also access the video archives of the last 4 days, featuring J. Macke and J. Kohler.

All in all, it was a fine week. The bulls retain the initiative heading into next week. Should oil move to the upside, or the Fed make some conciliatory comments regarding policy, I suspect the market will take another led to the upside, making it all the more punitive for anyone holding shorts.

Cheers

I don’t want to disparage Stoltzfus too much. Instinctively, I like the guy. He reminds me of someone I once hated and then learned to like. At any rate, he’s a lunatic. His target for the S&P 500 is 2,300, leagues and scores ahead of everyone else. He’s the outlier of the analyst community and he’s asking you to curb your enthusiasm.

The fuck?

The fuck is right, lads. He thinks stocks trade north, based on magnets from outerspace pulling them higher. Other than that, he’s rather melancholy about the whole ordeal–reminiscent of better global growth years, pining for reflators.

Well, sir, you shall not have any reflators!

Adjust your estimates, clown.

Herbalife announced they’ve come to terms with the FTC and pandemonium broke loose.

With approximately 20 million shares sold short, Bill Ackman’s Perishing Square, is writing a check it can ill afford right now (extra ride to Montauk). Losses range from $175-$250 million, for the day.

But who’s counting?

According to recent disclosures, Ackman’s playhouse of loss is down 17.5% for the year, prior to today’s drubbing.

Fellow cyclist to Bill Ackman, Dan “Mr. Pink” Loeb of Third Point said in a conference call today that he’s upped his long exposure and thinks you’re all stark raving jungle gorilla mad for even thinking of recession. After all, there aren’t any signs of it.

As such, he’s taken liberties to up his long exposure and make the world pay for its sins for betting against America.

He’s also a fan of energy related bonds, avoiding equities in the space due to the specter of dilutive share offerings.

“We see a lot of people that are on alert, but there haven’t really been any signs of recession from either the economic data, the surveys or our individual conversations with companies,” Loeb said Friday in a conference call held by Third Point Reinsurance Ltd. “We’ve actually increased our net exposure over the course of the month as some of these selloffs have created silly prices for securities.”

“The value of reducing volatility, aside from lowering the blood pressure of our team and our investors, is it really gives you the opportunity” to make long-term bets on underpriced securities, he said. Investors who are hedged against declines can “go in and make opportunistic acquisitions and purchases, which is exactly what we’ve been doing.”

Loeb, who’s known for pushing for corporate shakeups, said he’s turned his focus away from seeking targets for activist campaigns. Companies have been improving operations and creating capital structures that are favorable to shareholders, he said.

“Boards are holding the management teams more accountable, they’re getting a lot of pitches from bankers,” he said. “We’re really focusing on securities that are undervalued, where we can make investments and be constructive and not have to take any confrontational role with management teams.”

Loeb said he remains confident in health-care, industrial and consumer stocks and highlighted a recent investment in insurer Chubb Ltd. The money manager expects over-leveraged companies in cyclical sectors to face “some peril,” though investors may be able to profit from energy if they pick their holdings carefully, he said.

“We’re watching the energy markets very, very closely. We think that the better opportunities are on the credit side than on equities, as far as discounting potential bad news ahead,” he said. Energy stocks face the risks of high debt levels and “now the threat of equity offerings to shore up the balance sheets.”

Loeb’s corporate credit book lost 3.8 percent in the fourth quarter, hurt by energy-related holdings. He said Third Point may add to corporate bond positions this year as he looks to diversify the fixed-income portfolio beyond residential mortgage holdings. His largest sovereign position, in Argentine government debt, helped returns, he said.

Dan’s publicly traded reinsurance arm, TPRE, which is fueled by his investment acumen, has been a complete joke since coming public– down 18% over the past 3 months.

Cramer muses over the economy, in its never-ending quest to root out and vanquish all speculators. Some companies are doing much better than others, some for reasons that remain a mystery. At this point in the cycle, so many years removed from the ‘great recession,’ Jim, melancholically, ponders the prospect of having been ramshackled– to rack and ruin– in a market that acts like its enduring the pangs of a depression.

Dow futures are +114.

I haven’t the slightest idea what the hall of mirrors Sunedison resides in is all about, with all of their shell companies and subsequent ‘deals’ they seem to concoct. I do know, however, that David Tepper isn’t too happy about the whole ordeal and how Sunedison gimps Terraform out in an egregious display of self-interest.

Nevertheless, the courts have spoken. D. Tepper must shove a hammed sandwich into his mouth now, and quit haranguing the good folks over at SUNE.

SunEdison Inc said it has defeated an injunction filed by David Tepper’s Appaloosa Management on its TerraForm deal.

The company on Thursday said it was “gratified” after the Court of Chancery in Delaware denied Appaloosa’s injunction to prevent SunEdison’s yield co, TerraForm Power Inc, from buying some of Vivint Solar Inc’s assets.

TerraForm is to acquire Vivint’s residential solar rooftop portfolio for $799 million after SunEdison completes the Vivint transaction.

Appaloosa has repeatedly said TerraForm’s acquisition of Vivint’s assets, which had an initial purchase price of $922 million, was not in the interest of the yield co’s shareholders, mainly because it would alter the company’s business model and force it to take on debt of $960 million.

Although SUNE might still go belly up one day, possibly soon, the shares have moved firmly higher these past few days, in a very joyous, yet belligerent, manner.

Prepare yourselves for the largest rate hike you’ve ever seen. This 1.0% growth might just force the Fed to enact an emergency rate hike of 100bps to get this fucking tiger of an inflation rate under control.

Thus far, efforts by the American central bank to reign in this Zimbabwe like inflation has been futile.

SPY futures have leapt forward from +9 to +14.

Steve Liesman doesn’t think the Fed moves until James Bullard says so. Who’s the fucking Fed chief, Bullard or Yellen?

Get your rally caps ready. T. Slok from Deutsche Bank doesn’t quite understand what everyone is getting all bent out of shape about. The economy is doing just fine and the world will soon come around to the Slok-house way of thinking, pressing stock prices, inexorably, higher.

‘Markets are overly anxious over very unquantifiable worries.’