Buffett buying Tiffany debt - would you golong the stock now?

MNSL answered 10 months ago …

In a way Buffet is intelligent. Buffet and company know how to take decision according to situations especially in a depressed market like today. 08 and 10 years notes going to generality 10% yields. In addition they have holding power. In the long run some investment can generate above average returns.

Unless economy improves I do not think there will be great demand for products of Tiffany. Their sales and growth will come down in 2009. There will be to job cuts as well.

However current situation is completely different from 1987 crash and 1929 crash. Only few sectors will have above average growth in the next 05 years.

Therefore, average investors should become more intelligent now. They must think about their margin of safety. If they can identify hidden gems, companies in the next rotating sectors, companies with less debt and undervalued who can generate at least local demand they should think about investing in those companies in the next 18 months. Some investments will be life time opportunities. They should not trade very often. Keep your good investments for ever.

Sometimes once they identity good investment they must grab those opportunities and then should not trade at least in the next 12 months. Average investors can reduce their trading cost, commission. Volatility will come down drastically. Even currency market will stagnate in the next 18 months. It is better to be in their own currencies rather than converting into other currencies.

Demand has come down drastically for houses, cars, tyres, leathers, electronics, phones and mobile phones, computers, clothes, forest, iron and steel products, diamonds and gold jewellery globally. With the rising unemployment globally demand will come down further until 2011. Their will be fire sales in above products to generate cash in the next 12 months. In addition their will be severe competition among airlines, to survive in the industry and travellers will have greatest opportunities to travel in the next 18 months due to sharp fall in airline ticket fees.
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