Berkshire Hathaway And Sequoia Fund: As Seen Through Alphabet, Amazon, And Apple

Introduction

For the week that ended Friday, one could focus on short-term price movements or long-term investment thinking. As my week evolved I did both, which produced positive but disjointed conclusions.

Short-Term Price Actions

On Thursday, prices fell supposedly in reaction to political events. As an analyst and portfolio manager trained in the school of contrarianism, I saw the reason for the decline differently. For some time I have been aware and have commented on the price gaps in the performance of the three main individual security price indices; Dow Jones Industrial Average, Standard & Poor's 500, and the NASDAQ composite. In each case, the index had two days when prices through the day were measurably higher than the high price achieved the day before. This price gap phenomenon rarely happens and most of the time a subsequent price action fills the gap before the market resumes its prior trend. In earlier blogs, I had warned about this probability. Further, I quoted a knowledgeable market analyst who was expecting a 5% correction.

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