Thanks again for your comments on essay question answer formats. I posted the following as a follow up question; but no one seems to have noticed so far. So here it is: how about a sample, though, on an essay question? (I’m sorry I’m really not comfortable yet with “bullet points”) What would you say is the reason for Buffet to move away from equities and delve into bonds? If the US economy were poised to enter into a recovery phase in 2010, wouldn’t investment in equities be more–if anything–CFA Level III intuitive? State with one reason on Buffet’s decision
USD depreciation.
Equities overvalued Interest rates to remain low for foreseeable future Inflation to be less than target rate for foreseeable future
mpnoonan Wrote: ------------------------------------------------------- > USD depreciation. What???
Not sure on what type of bonds the Big Man is investing in, but I would argue that he sees corp. bonds way undervalued as a result of forced selloffs’ rather than equities being way overvalued.
most of the questions are alot more definitive than those that you gave. but on buffett, the first answer i’d think of is, “low economic growth going forward” harms equities, but not corporate bonds (they still pay if economy doesn’t go into depression)… but then the question becomes whether you explain why growth will be lower going forward i.e. tapped out consumers, deleveraging F Institutions… so then why are consumers and FI’s tapped out? when you do the exam you’re never really sure what level to go into. when you put down “lower economic growth in future”, part of you thinks that might not get full marks even though you know it’s the correct idea.
Canadianloco Wrote: ------------------------------------------------------- > mpnoonan Wrote: > -------------------------------------------------- > ----- > > USD depreciation. > > > What??? He is investing in foreign bonds…why is he investing in foreign bonds? pretty damn sure that he had an op ed piece in the NYTimes a few weeks ago and spelled it real clear…he is worried about USD depreciation b/c we printed so much money. Think about it.
mpnoonan Wrote: ------------------------------------------------------- > Canadianloco Wrote: > -------------------------------------------------- > ----- > > mpnoonan Wrote: > > > -------------------------------------------------- > > > ----- > > > USD depreciation. > > > > > > What??? > > > He is investing in foreign bonds…why is he > investing in foreign bonds? pretty damn sure that > he had an op ed piece in the NYTimes a few weeks > ago and spelled it real clear…he is worried > about USD depreciation b/c we printed so much > money. Think about it. Oh sorry, didn’t see the original post mention foreign bonds. Oh wait, he didn’t…
Canadianloco Wrote: ------------------------------------------------------- > mpnoonan Wrote: > -------------------------------------------------- > ----- > > Canadianloco Wrote: > > > -------------------------------------------------- > > > ----- > > > mpnoonan Wrote: > > > > > > -------------------------------------------------- > > > > > > ----- > > > > USD depreciation. > > > > > > > > > What??? > > > > > > He is investing in foreign bonds…why is he > > investing in foreign bonds? pretty damn sure > that > > he had an op ed piece in the NYTimes a few > weeks > > ago and spelled it real clear…he is worried > > about USD depreciation b/c we printed so much > > money. Think about it. > > > Oh sorry, didn’t see the original post mention > foreign bonds. > > Oh wait, he didn’t… Boom sucka