Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Two Ways To Play: Mixed Messages From Greenspan, Buffett, Dimon


Position your portfolio in good times and bad.

A number of big names made headlines over the weekend giving their thoughts on the state of the U.S. economy. Former Federal Reserve Chairman Alan Greenspan made the case that the U.S. is currently receding with economic growth practically at 0%.

According to Bloomberg, when describing the economy, Greenspan said it looked like a game of "tug-of-war" between cash-rich businesses and money-losing financial institutions, a very unusual situation with neither side winning the battle, he said.

Greenspan added that a recovery won't begin until home prices stabilize which would take the pressure off financial firms to disclose more writedowns on mortgage-related securities.

Meanwhile, billionaire investor Warren Buffett spoke alongside his investment partner Charlie Munger at Berkshire Hathaway's (BRK.A) famed annual shareholder meeting. In their speeches Buffett and Munger lambasted Wall Street and regulators and even accountants, saying they failed to protect the public. Although Buffett did suggest that the worst of the credit crunch may be over, he also reiterated that the U.S. economy is in a recession and he expected there to be more losses.

JP Morgan Chase's (JPM) CEO Jamie Dimon was also on the tape. Dimon said he remained cautious on the outlook for the U.S. and does not expect the U.S. financial crisis to end soon.

On the positive side, Richard Russell published an article in Barron's over the weekend: he's bullish on the equity markets on a technical basis, suggesting that stocks could reach new highs in the near future, possibly in the weeks or months ahead.

For a Minyanville perspective, see Jeff Saut's A Time for Caution.

From the Bull Pen: Those in the bull pen aren't shaken by the comments by Greenspan, Buffett and Dimon, Buffett in particular as he stands to benefit the most in a distressed environment. Nonetheless, bulls looking for upside vehicles can look to plays Professor Quint Tatro mentioned: Homebuilders (XHB), Financials (XLF), and the S&P Ultra Long (SSO).

From the Bear Cave: Which companies are going to be negatively impacted by a weak consumer and slowing demand? Bears see downside opportunities in retail plays like Home Depot (HD), Lowe's (LOW), and Sears (SHLD).
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

Featured Videos