Buying Warren Buffett's discards - Procter & Gamble Co. (NYSE: PG)
Why would anyone buy shares in companies that the World's greatest investor has sold?
That is a real good question and may explain why Procter & Gamble Co. (NYSE: PG) has been the second worst performer in the Dow over the past 12 months i.e. a dog of the Dow.
On May 25th last year, the Motley Fool wrote:
Berkshire Hathaway (NYSE:BRK-A) (NYSE:BRK-B) . . . just closed (disposed of) its Procter & Gamble (NYSE:PG) position -- over $4 billion worth -- according to its latest 13-F filing. That holding had been large enough to qualify as one of Berkshire's "big four" investments, and has been on its books for over a decade.
I am sure a lot of investors who follow Warren Buffett would have sold PG simply because Buffett is no longer an owner. It seems that alone would have put a big downward pressure on the PG share price over the past 12 months - maybe even enough to make it a Dow Dog.
Anyway we added it to our Dogs of the Dow portfolio last week at just under $74. Lets hope the abnormal selling is over and PG's share price begins to perform again.
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You can find the strangest things in dumpsters sometimes. One man's garbage is another man's treasure? Thanks for the heads up @dowdogs.
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Nothing wrong with Dumpster Diving in my book.
Haha, nope!
Warren Buffet is a great investor but remember that he didn't ever make more than a return of about 15-20% a year. You won't get rich by that
He did - I guess it came down to consistency and the power of compounding.
15% to 20% does not sound like much in the crypto world though.
Check out this post https://steemit.com/forex/@rollandthomas/my-journey-into-forex-part-3-of-3-the-usd1-mm-challenge
It has a table showing what 24% a year could mean.
PG is part of the consumer staples sector and that sector hasn't done well this year. What price is your target and stop loss?
The way the Dogs of the Dow theory works - is you buy a Dog today and sell it in 12 months time.
The theory is the market over corrects of the downside so you benefit from a bounce back effect.
Thanks for the clarification.
It certainly is an interesting time in the market. The steady stocks that were bid up too high are falling back down to earth as the interest rates rise and make it more viable for income investors to get a secure 3% or so from treasury bonds.
This has caused the 'safest' of the dividend aristocrats to drop pretty much across the board. I don't know if this is THE time to buy, but it sure seems like a decent entry point.
You are right about interest rates - they are probably only going up from here and that will likely put a drag on dividend stocks.
Muchos acedores de empresas lo que hacen es crear y venden en el mejor momento.. es su circulo... caso como lo dice una película muy famosa.. con Will Smit "en busca de la felicidad" esa es mi respuesta.
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This is really interesting! I am still learning about trading techniques and I haven't come across the dowdogs concept before. I will defo be looking into this more now! Thanks for the post
Glad you found it useful - remember to do your own research before committing funds.