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What are people’s thoughts on Frydenburg suggesting the prudential regulator consider forcing the merger of industry super funds that suffer liquidity problems due to members withdrawing funds this financial and next...
which funds could potentially be at risk ?

pretty scarey times
 
ESKIE said:
What are people’s thoughts on Frydenburg suggesting the prudential regulator consider forcing the merger of industry super funds that suffer liquidity problems due to members withdrawing funds this financial and next...
which funds could potentially be at risk ?

pretty scarey times
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Maybe industry super funds who keep more of their of their funds in illiquid assets?

So people get your crystal balls out. Do we follow the great depression and have an irrational 4 month rally coming up?
Are our systems more advanced? Can we hold off on a depression? Is the virus going to kick in and send us spiralling?
 

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Deliverance said:
Maybe industry super funds who keep more of their of their funds in illiquid assets?

So people get your crystal balls out. Do we follow the great depression and have an irrational 4 month rally coming up?
Are our systems more advanced? Can we hold off on a depression? Is the virus going to kick in and send us spiralling?
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The drop hit just as many of our majors went ex-divvie which made the drop slightly worse. In WW2 parlance we're probably in the "phony war" stage of the market reaction as the US just starts to understand how much trouble they're in and some emerging economies are a step behind in getting hit hard (I'm tipping Indonesia and Brazil).
 
ASX Heist: small shareholders ripped by bankers in rash of emergency capital raisings

More than any other factor, it was Australia’s seven million mum and dad shareholders, plus their inheritance-focused children, who won Scott Morrison the 2019 election – courtesy of Bill Shorten’s overly ambitious franking credits policy. And how do Morrison and his Treasurer Josh Frydenberg repay those faithful shareholders for their support?

Last week they used the cover of the Covid-19 crisis to deliver totally unnecessary changes to Australia’s capital raising rules that will only serve to enrich Wall Street’s elite investment bankers whilst monumentally shafting ordinary small shareholders.

And all those in on this giggle can’t say we haven’t seen this movie before. During the GFC, ASX listed companies collectively raised an emergency $100 billion in record time, diluting small shareholders out of more than $10 billion in value and enriching those same investment bankers with an easy $2 billion in fees.
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https://www.michaelwest.com.au/asx-...ankers-in-rash-of-emergency-capital-raisings/
 
The warning for small investors in Cochlear's windfall
One London investor timed its move on Cochlear stock beautifully. But diluted retail shareholders might not be so happy.
Apr 6, 2020 – 10.53am


The website for London-based investment firm Veritas Asset Management says most of its employees have been working from home since mid March.
That’s very sensible. But it’s also a pity, as it means they would have no chance to exchange high fives to celebrate the impressive success of their investment in hearing implant maker Cochlear.
Of all the winners from Cochlear’s bargain-basement placement completed almost two weeks ago, Veritas – which is Latin for truth – stands out.

Cochlear's raising was completed at its lowest price for almost three years.
And as investors brace for an avalanche of capital raisings over the coming weeks – starting with the surprise raise from plumbing supplies giant Reece announced on Monday and the emergency placement from Flight Centre less than an hour later – the story of the winners and losers from Cochlear's deal will be important to keep in mind.
Cochlear announced on March 25 that it was raising $800 million via an institutional placement to help provide a liquidity buffer, as the company was squeezed by two forces – one general, and one specific.
The general one was, of course, the coronavirus pandemic, which has halted elective surgery in many parts of the world, stopping implant sales in their tracks.
But Cochlear’s specific liquidity issue is that it has been found to have done the wrong thing.
Early last month, the company announced it had lost its penultimate appeal against a US judgment that found it had infringed a rival’s patent.
Cochlear estimates it will be forced to pay out $483 million in damages, and potentially as much as $238 million in pre-judgment and interest costs. The company is still fighting both parts of that case, but is largely resigned to paying out at least the larger chunk of that legal loss.
The $800 million raising was accompanied by a $50 million share purchase plan for retail investors, and a new $150 million bank debt facility.
Cochlear was clearly taking sensible, prudent action designed to give it a margin for safety and let it retain its employees and its vital research and development program.
But despite the fact Cochlear's deal couldn’t be put in the same category as rescue raisings from Webjet and Kathmandu, the board and its advisers, JPMorgan, opted against raising via an entitlement offer, which would have helped to limit dilution but would have taken at least 14 days to complete.
Instead, they opted for a placement in the interests of speed amid incredible volatility.
The deal was priced at $140 a share; not only was this a 16.7 per cent discount to Cochlear’s price on the previous close, but it was the cheapest the stock has been since April 2017.
Veritas had very good reason to jump at the opportunity presented by the placement.
A substantial shareholder notice lodged last week showed the firm had actually been buying since mid February, grabbing $9.3 million of stock at about $215 a share on February 14, another $4.2 million parcel a fortnight later at about $208 a share and a $10.8 million parcel at $218 a share on March 3.
As the Cochelar board and its advisers considered their options in the days before announcing their capital raising, Veritas was still buying. It bought $33.2 million worth of shares on March 23 at $159 a share and then $37 million on March 24 – the day before the raising – at $168 a share.
When the $140 a share price on the raising was announced, Veritas jumped in boots and all, spending $304.5 million on stock.
Such was the British firm’s hunger that Cochlear increased the size of the placement by 10 per cent to $880 million. Veritas took more than 34 per cent of the expanded raising.
On March 26, Cochlear told the market the raising had met with “significant demand” for which chair Rick Holliday-Smith was “grateful and delighted”.
But not as delighted as Veritas. By the end of that day, the $304.5 million of shares it took in the placement were worth $396.2 million, as Cochlear shares surged to close at $182.17.
Veritas doubled down, spending a touch over $105 million – basically its profits on the placement – on Cochlear stock across March 30 and March 31, taking its stake to 5.6 per cent.
The delight from London’s truth seekers might not be shared by the retail investors who didn’t participate in the offering – and there will be plenty of them.
While they will be pleased Cochlear’s balance sheet is shored up, and that its share price never got anywhere near the discounted raising price, the dilution they’ve suffered – upsized for Veritas and other institutions – will surely sting.
They might well ask if demand was so “significant” because the price of the placement was too low.
They might also ask if an entitlement offer involving a bookbuild, which would have provided a mechanism to adjust the price to demand, might have been a better way to ensure the required liquidity was secured with the minimum dilution. The institutional component could have taken just 24 hours, although the retail portion would have stretched over at least 14 days.
They might also ask whether the board might have been prepared to take on the risk of a smaller discount or a more time consuming raising via an entitlement offer given it paid JPMorgan at least $19.8 million (or 2.25 per cent of proceeds) to underwrite the deal, according to a report by Ownership Matters.
Of course, this is all very well in hindsight. Investors must trust the Cochlear board and JP Morgan would have weighed up all these factors and done what they thought was best in what are clearly trying circumstances.
But as we prepare for an avalanche of capital raisings – many of which will take advantage of the temporary change in ASX listing rules that increases the cap on placement sizes from 15 per cent of shares on issue to 25 per cent – the Cochlear/Veritas example is worth keeping in mind.
These deals happen largely behind closed doors, without the approval of shareholders and very much at the whim of the board and their advisers.
And while there will be big winners – like Veritas and, to a lesser extent, JPMorgan – those gains typically come at the expense of retail shareholders. Value generally gets transferred from small investors to large.
It’s up to boards to make sure they do the right thing by all investors, especially in these difficult times.
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https://www.afr.com/chanticleer/the...estors-in-cochlear-s-windfall-20200405-p54haq
 
compact72 said:
Just me or is it insane how the US markets are growing.

Yes, I know they crashed, but their country is worse right now then it was 3 weeks ago and continues to grow?

Reminds me of "The Big Short"
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Job losses all around and companies are scrambling to find any costs to cut where they can

And yet the markets are going up. A bit of a head scratcher.
 
Gigantic said:
Job losses all around and companies are scrambling to find any costs to cut where they can

And yet the markets are going up. A bit of a head scratcher.
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and another green day for them

Inflated like hell, and Trump will continue to do it. The only problem when it bursts is when somebody else gets elected, it will be the new president's fault
 
Any clues what to do, I was in a balanced fund that is in pension mode. I had decided on 2nd March to go cash for a while only down about 10% at that stage but the wife said the experts saying not to change. So stupidity I held off and by the time I changed I was down 20% near the bottom. I could not see the market rebounding and could only see further losses. Now for whatever reason there a has been an upturn which I cannot believe the logic other than some stimulus package that needs to paid for in the future. There is rampant unemployment and businesses are in big trouble.

The reason for the change was to give me peace of mind which would have been fine if I gotten out earlier. However that has not worked because at the moment I got out near the bottom and every time the market has significant rise it is a worry.


So at the moment I am sitting where the financial advisers say you are locking in the losses. To I go back in the market or to I follow logic that these recent gains will go south again and in a big hurry.
 
Optimistic Dog said:
Any clues what to do, I was in a balanced fund that is in pension mode. I had decided on 2nd March to go cash for a while only down about 10% at that stage but the wife said the experts saying not to change. So stupidity I held off and by the time I changed I was down 20% near the bottom. I could not see the market rebounding and could only see further losses. Now for whatever reason there a has been an upturn which I cannot believe the logic other than some stimulus package that needs to paid for in the future. There is rampant unemployment and businesses are in big trouble.

The reason for the change was to give me peace of mind which would have been fine if I gotten out earlier. However that has not worked because at the moment I got out near the bottom and every time the market has significant rise it is a worry.


So at the moment I am sitting where the financial advisers say you are locking in the losses. To I go back in the market or to I follow logic that these recent gains will go south again and in a big hurry.
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Sorry to hear that ☹️. Basically no one knows. FWIW
My prediction is one more week of rises, a 2 week drop, then about a 3 month rise, then a big drop for many months.
 

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Optimistic Dog said:
Any clues what to do, I was in a balanced fund that is in pension mode. I had decided on 2nd March to go cash for a while only down about 10% at that stage but the wife said the experts saying not to change. So stupidity I held off and by the time I changed I was down 20% near the bottom. I could not see the market rebounding and could only see further losses. Now for whatever reason there a has been an upturn which I cannot believe the logic other than some stimulus package that needs to paid for in the future. There is rampant unemployment and businesses are in big trouble.

The reason for the change was to give me peace of mind which would have been fine if I gotten out earlier. However that has not worked because at the moment I got out near the bottom and every time the market has significant rise it is a worry.


So at the moment I am sitting where the financial advisers say you are locking in the losses. To I go back in the market or to I follow logic that these recent gains will go south again and in a big hurry.
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That sucks, sorry to hear. Sadly if we knew we probably wouldn't be in here reading the opinions of others!
 
From over a week ago but a decent read.

https://www.livewiremarkets.com/wires/how-to-survive-the-2020-bear-market

How To Survive The 2020 Bear Market?

Last week I suggested investors needed a plan to significantly increase their chances to successfully negotiate this year's Bear Market in global equities.

This week I am adding my five cents worth about what to take into account when setting up such a plan.

Looking Forward

Let's start with the positive news. Every Bear Market, Grand or Small, offers the ideal starting point for outsized investment return, once the story of misery and despair has run its course.

We only have to look back at the final week of 2018 to back up that statement. Once the selling stopped, after four months of relentless down-draught, Australian share market indices rallied circa 20% over the following six months carried by banks, resources and other previously beaten down cyclicals. And that was after a rather mild pull-back that in Australia didn't even make it to -20%.

It is thus of no surprise that once the wildest of wild gyrations have been replaced with calmer moves in share prices, the financial sector is back to doing what it does best: trying to look forward, calling the bottom, and identifying attractive opportunities.

There is no judgment in that sentence. This is how the financial sector operates and most professionals in it have that special gene that never stops looking at the brighter side of life. Pessimists never get rich, etc I am sure you've heard all the mantras.

I am now letting out my naughty side, and I hope you don't mind, but reminiscing on past observations the track record for most to accurately identify "the bottom" in a Bear Market is far from great, and I am now being polite.

Back in 2007, once we had a Big Sell-Off followed by a quick reversal, many were prepared to call "the bottom".

As it happened, they tried again in the second quarter of the following year, and again by mid-year. Later that year more attempts appeared in print, and that was before that last Big Sell-Off dragged markets into early March of, by then, 2009.

Only then, finally, career-defining accurate calls about "the bottom" were made.

What we, the smaller sized investors, should keep in mind is that professional fund managers are wired to take risk. They are usually quite good at it.

But if it turns out they moved in too early, or bought the wrong stocks, most are not losing their job over it, or if they do, they can probably move on to the next endeavour.

In contrast, many years after the Bear Market of 2007-2009 had been relegated to history, I would still hear stories about self managing retail investors that had been wiped out, and many have never returned in the share market.

Recently I heard about portfolios of half a million dollar having been annihilated to virtually zero because of leveraged exposure to the Bull Market that so abruptly ended only a few weeks ago.

I know, the first thing that comes to mind is always: what exactly was their financial advisor thinking? Goal number one for the rest of us: let's make sure we don't end up in similarly dire straits.

The share market can be a wonderful creator of long term wealth, but we should always be mindful of the risks that lay within, in particular during times of pandemic, global recession, and another heavy collapse in the oil price.

Bear Markets Are A Process

Forecasts about "the bottom" in this year's Bear Market are all based on the assumption the world has only one problem to look after: a nasty covid-19 pandemic that at some point will have largely run its course, hopefully soon.

This is not dissimilar from the situation in 2007 when it was widely assumed the Americans would take care of their subprime-related liquidity problems, and that would be it.

Little did we know. Next up followed a rapid boom-bust cycle in oil markets, virtually guaranteeing an economic recession later in the year. Then China tripped over, causing the most severe sell-off for commodities and related share prices in modern human history.

And after that we still had to find out that the US housing and financial products related problems that had surfaced in 2007 were well beyond what any of us had ever imagined possible up to that point.

The message I am trying to get across here is that Bear Markets are a process. They develop in line with whatever comes out next in terms of bad news.

Most of the smaller Bear Markets have one key problem that needs to be dealt with. In 2012 it was the ECB that promised to do "whatever it takes". In late 2018 it was the Federal Reserve that reversed on its policy.

It is possible that to hunt the Big Bad Bear back in his cage this year all we need to see is a regression in global infection numbers, and that will be it.

It is also possible that more bad news is just about to come out of the woodwork. There is still a global economic recession happening in most economies around the world.

Combined with the collapse in oil prices, this is as good as a solid guarantee that a lot more negative developments will take place.

What we don't know is whether any of the forthcoming bad news stories will be strong enough to push share prices further onto new lows. Only one way to find out.

Equally, what history shows us is that Bear Markets tend to end unexpectedly. I don't recall anything special happening during the first week of March 2009 and virtually nobody thought in late December 2018 next stop 20% higher by July!

So there is a real dilemma for investors. On one hand there are plenty of once-in-a-decade opportunities in equity markets, on the other hand we don't know when or why or whether share prices can still become a lot cheaper - or not.

What if tomorrow's rally proves the real thing? How much will we blame ourselves if we miss out on taking advantage?

You Need A Plan, Not The Bottom

Investing during a Bear Market is about trying to balance the two opposing scenarios. You don't want to take a massive hit on your capital, and potentially handicap your future ability to generate returns, but you also want to be in the market when that big unexpected rally sweeps share prices to a significantly higher level.

The universal (and best) advice for investors sitting in cash thus remains the same: don't try to pick the bottom. You most likely won't be able to. If you try to pick the bottom, with the intention of then moving in big you most likely will miss the opportunity.

A much better strategy is to allocate small amounts to stocks you really want to own once all this is over. Accept that after you buy, the share price can (and probably will) go lower, at some point. This is why you move in small steps.

This is also why you need a plan, a list of stocks on your personal radar, and a mapped-out strategy of what exactly are you trying to achieve? The latter is less straightforward than most investors realise.

Let's start off with the basic observation: with exception of very few stocks in the share market right now (Fisher & Paykel Healthcare ((FPH)) comes to mind) ALL stocks are by now "cheap".

Many stocks are cheaper than many others, and some might look exceptionally cheap, but there is very little discrimination going on in these markets, except for degrees in volatility and share price weakness.

All stocks are cheap, but they do not all offer the same kind of opportunity. This is why it is paramount for investors to know what exactly they are after.

For example: a stock that has been clobbered by -80% might possibly represent the most upside when that sustainable, coming-out-of-the-bear-market rally arrives, but it does not by default represent a great longer term, buy and hold type of opportunity.

If you are looking to jump quickly on and off opportunities, stocks that have fallen the most would now be your favourite hunting ground.

Investors looking to (re-)build long term investment portfolios might want to look the other way, however. I am guessing you are much better off searching for dividends that grow and are sustainable, and for business models that can withstand the challenges and shocks that seem to come along regularly in this ongoing era of below-trend economic growth.

To put it more bluntly: many of the shares that have fallen a lot more than suggested by the index belong to companies that looked "cheap" and were operationally struggling before this Bear Market arrived (see also the February reporting season locally).

You are hopefully not assuming these companies will somehow transform into a much better version of themselves in the midst of this maelstrom of negative developments?

I fully agree with expert voices elsewhere, cheaper looking "value" stocks will outperform during the recovery from this Bear Market, but this will be predominantly because their share prices have fallen more deeply, and their operations are more leveraged to future recovery.

But once this process has run its course, it'll be back to old warts and smelly wounds.

Which is why I believe many long-term investors will be much better off by focusing on those companies that looked strong, solid and in excellent shape before this Bear Market pulled down their share price.

With the occasional exception, those companies will still be better, healthier, and growing more sustainably than their cheaper (and lower quality) peers who offer more upside, potentially, in the short term - when that final rally arrives.

Tomorrow Will Be Different

It gets more complicated, still.

I sense a general assumption that what we are experiencing is simply a temporary interruption. Soon all will be back the way it was pre-February seems to be the general look-through-the-crisis view.

But, again, I think this will prove way too simplistic. Bear Markets of this character and magnitude change the world. Investors who simply assume everything old will soon be reinstated are setting themselves up for major disappointment, I believe.

I suspect, for example, that global travel might remain more subdued for much longer than anyone of us is currently willing to contemplate. Geographical borders will remain less-friendly after this pandemic.

The corporate sector in particular is now discovering the ease and benefits from online conferencing and working from home. Are they really going back to booking as many flights as before?

Corporates might also consider reducing headquarters office space. Possibly with less staff too, of which more might be allowed to (at times) work from home.

Similar expectations seem but valid for online shopping and services, more electronic transactions (less coins and paper money) and a general drop in popularity of ocean cruises.

Most importantly, I believe, the damage that is currently being inflicted on already over-indebted Australian households might usher in a new era of subdued household spending long after the current crisis has run its course.

Mortgage and debt-relief are most welcome, of course, and I truly believe governments the world around have no alternative but to provide excessive support to their population and businesses, but further out those debts still need to be paid off, irrespective of the damage that is currently inflicted on cash reserves and incomes.

This year's financial situation for Australian households doesn't look any rosier now that property owners are expected to "share the burden" which in many cases translates into no collecting of the rent and thus loss of income, while portfolios in the share market will be hit by listed companies deferring, reducing or scrapping altogether their dividend payout to shareholders.

Soon, I believe, property prices will fall in value.

Capital Raisings And Other Risks

Locally, I believe one key risk for retail investors is that companies will announce capital raisings to either pay off debt/fix the balance sheet, or make sure they don't run out of cash.

As already shown by recent examples provided by Cochlear ((COH)) and oOh!media ((OML)), these additional share placements are executed at significant discounts, even after the share price shellacking, and retail investors might not be offered the opportunity with all the spoils reserved for cashed up institutions.

Depending on specific circumstances, large capital raisings at depressed share price level not only weigh upon the share price, they also dilute a significant share of the future upside potential. In the above two examples: this will prove more so the case for oOh!media and less so for Cochlear.

Investors should check their list and/or portfolio because many more of such capital raisings will be announced in the days, weeks, and months ahead. You can pretty much consider this a personal guarantee.

Those with a healthy memory will remember fresh capital raisings equally became one of the defining features during the Bear Market of 2007-2009.

This time around, companies that are being mentioned as a likely candidate for fresh raisings include Tabcorp ((TAH)), Star Entertainment ((SGR)), Oil Search ((OSH)), Woodside Petroleum ((WPL)), Boral ((BLD)), Computershare ((CPU)), James Hardie ((JHX)), G8 Education ((GEM)), Link Administration ((LNK)), Ramsay Health Care ((RHC)), Transurban ((TCL)), Sydney Airport ((SYD)), McMillan Shakespeare ((MMS)) and Vocus Group ((VOC)).

The problem for most companies is that business spending plans and balance sheets all date from pre-February and none incorporate an extreme economic shock as is currently upon us.

Many will try to avoid raising fresh capital through deferring spending, reducing costs and (if they can) sell assets or take on more debt, but a number of companies might also simply move early in order to "get it out of the way".

Those who wait until they are forced to execute quickly will be subjected to larger discounts. That's how this works.

Investors should note Bapcor ((BAP)) was seen as a likely candidate for a capital raising, but management organised an investor call on Friday assuring there would be no new equity required.

If somehow I have now given you the impression that investing in the share market in 2020 is a lot more complicated than simply buying into a cheap looking stock, than damn right you are getting the message.

In terms of macro-risks, the most obvious is the sinking oil price, of which I am 100% certain investors are underestimating the impact on the industry's spending, profitability and balance sheet vulnerability.

There is no doubt in my mind the significant fall in the price of oil will trigger a lot of negative news in the USA where a direct link exists into high yielding corporate bonds.

It is difficult to predict when exactly, or how this process will play out, but I have little doubt the world is watching this very closely.

Investors who are not sitting on the sideline with a load of cash, should use every opportunity to re-adjust their portfolio for the fact that the world has now changed rapidly since mid-February.

A bad decision made in the past doesn't get any better during a Bear Market. This is the ideal opportunity to improve the overall quality and sustainability of your share market exposure.

But first: make sure you have a plan. Know yourself, your goals and needs, your risk appetite and your time-horizon. Only then will this Bear Market represent a true opportunity for you.
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Jesus XJO warrants are thinly traded. Looking to accumulate more downside protection, it's not an easy task.

CitiBank have one series of Qantas installment warrants, if the rumours about Virgin are true they will be added to my watchlist.
 
Be interesting to see what happens with Virgin, circa $5 billion in debt, a lot of that would be aeroplane mortgages (I think). Someone could get a real bargain of an airline if the structure the DOCA well, most of the creditors I think would accept a very low cents in the dollar offer. Be interested to see how political it gets, whether states or feds will get involved to take a stake to make it fully Australian owned and dictate where the headquarters are.
 
Pommie Docker said:
Be interesting to see what happens with Virgin, circa $5 billion in debt, a lot of that would be aeroplane mortgages (I think). Someone could get a real bargain of an airline if the structure the DOCA well, most of the creditors I think would accept a very low cents in the dollar offer. Be interested to see how political it gets, whether states or feds will get involved to take a stake to make it fully Australian owned and dictate where the headquarters are.
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isn't it 94% foreign-owned atm? I don't want the government giving them any money unless it's going to result in profits and have you seen how much wasted money the government goes through? They'll only f*ck this up too. Just save the taxpayers money IMO

If it was 94% Australian owned then maybe you jump in just to save the jobs but not worth it atm. Let private enterprise sort it out
 
I know a monopoly is a bit of a disaster. But weren't virgin on the ropes already? Are we big enough for 2 domestic airlines?

Seeds said:
Stock market is stupid. how can they not see this is going to end in a wave of bankruptcies. Virgin looks like being the first big one.
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As Mofra mentioned early a lot of the rallying was driven by covering shorts. The initial rally builds momentum and then bigger buyers jump in so they don't miss the gains. This kicks the momentum further. Technical indicators start to look good, so chartists etc jump in and it builds further. Then the amateur jumps in with FOMO, even though they've already missed out mostly. Then together they've built:

images - 2020-04-21T101232.797.jpeg

The big unknown this time round is the virus itself. Every good news piece of a vaccine etc, kicks it along even more. Do we ever get a vaccine? Do we get a second wave? Do we get US riots? How will global trade fair long term?
 
Seeds said:
Stock market is stupid. how can they not see this is going to end in a wave of bankruptcies. Virgin looks like being the first big one.
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Leading US stocks banking on a moral hazard? The bulk of US stimulus has already gone to large companies & millionaires.

FWIW the market seems to be tracking very closely with the 1929 graphs. I'm slowly accumulating index put warrants as I still see significant downside risk. As per graphs posted earlier, there was a 2+ month lag between the onset of recession and the market's second fall in 1929 and our current movement has seen a retrace to the magical 50% fibonacci line.
 
Interesting graphs floating around suggesting US markets are testing support levels of some very long term trends.

1587432835248.png
 

Munger: “Nobody Knows What’s Going to Happen.” And This Time, Berkshire Is Not Piling into Stocks & Companies | Wolf Street

wolfstreet.com

There is something refreshing during these insane times when a guy in his mid-90s who has seen it all and has been successful at navigating it, and who, during the last Financial Crisis, was buying stocks and entire companies hand over-fist, now says that he has never seen anything like this before, and that he doesn’t know what to do except to sit tight. And they’re not buying the rally, and they weren’t buying the crash.

Charlie Munger, vice chairman of Berkshire Hathaway, was talking with The Wall Street Journal about the current situation and how he and Warren Buffett are looking at it. And they’re not buying.

During the Financial Crisis, they were lending money to Goldman Sachs and GE and getting warrants too that turned out to be very profitable, and they bought stocks, and they bought BNSF outright after the partial stake they’d acquired before the Financial Crisis went sour.
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