A TIP YOU CAN USE TO MAKE MONEY FROM WARREN BUFFETT’S MULTIBILLION-DOLLAR LOSS $KHC $PG $KO $AAPL $FB $AMZN $NFLX $AMD $CGC $CRON $ACB $TLRY $DJIA $QQQ $SPY

Twitter
LinkedIn
Facebook

A TIP YOU CAN USE TO MAKE MONEY FROM WARREN BUFFETT’S MULTIBILLION-DOLLAR LOSS $KHC $PG $UN $KO $AAPL $FB $BB $AMZN $NFLX $AMD $CGC $CRON $ACB $TLRY $DJIA $QQQ $SPY

Warren Buffett is the most successful investor of our time. Still, he just suffered a multibillion-dollar loss on one of his high-profile investments.

What can we learn from this? Let’s explore with the help of a chart.

Chart

Please click here for an annotated chart of Kraft Heinz KHC.  Please note the following:

• The chart shows a big jump in the stock on the Heinz and Kraft merger. The market was excited about the involvement of Warren Buffett and his Berkshire Hathaway BRK.B  in the deal.

• The chart shows that The Arora Report gave a signal to sell or short-sell Kraft Heinz on the news. We wrote: “Consumer tastes are changing and neither company is aligned with the new trend.”

• This short signal was one of the hardest we have given, for two reasons. First, who in their right mind would want to short what Buffett was buying? Second, now years later with the benefit of hindsight, it is clear that our statement about consumer tastes was prescient. However, at that time, the prevailing wisdom was that organic and healthy food was a niche business and it was not going to adversely impact brands such as Kraft and Heinz, both of which sell processed food.

• As the chart shows, it was a cost-cutting story for a long time.

• The chart shows Kraft Heinz attempted a global-brand grab by offering $143 billion for Unilever UN.  For those unfamiliar with Unilever, it is a global British-Dutch consumer-goods company on par with the more familiar name of Procter & Gamble PG.

See also  PRUDENT INVESTORS WATCHING SEMICONDUCTORS FOR A SIGN OF A PULLBACK, GOLD HITS ALL TIME HIGH

• The chart shows that the Unilever bid was quickly abandoned.

• As the cost cutting ran its course and was not providing any new benefits and Kraft Heinz could not find a major acquisition, it simply became a story of the “hope” strategy and Buffett’s halo.

• As the chart shows, during a period in which the Dow Jones Industrial Average DJIA,  S&P 500 ETF SPY and Nasdaq 100 ETF QQQ performed well, Kraft Heinz lost a big part of its value.

• The chart shows that, finally, the long-overdue admission from the company came and the stock fell.

• Investors who were not paying attention to the “change” were hit with a bombshell. The change is that consumers are no longer buying processed food and are opting for healthier foods.

• The chart shows the two biggest volume days — the first on Buffett’s buy and the second on the bombshell.

A strategy that works

Buffett’s loss can help us understand a strategy. The strategy is to focus on change. In the case of Kraft, the change in consumer taste was happening. Buffett acknowledged Monday that he overpaid for Kraft.

Please click here to see five stages of a long trade based on change.

Please click here to see five stages of a short trade based on change….Read more at MarketWatch.

A knowledgeable investor would have turned $100,000 into over $1,000,000 with the help from The Arora Report. NOW YOU TOO CAN ALSO SPECTACULARLY SUCCEED AT MEETING YOUR GOALS WITH THE HELP OF THE ARORA REPORT. You are receiving less than 2% of the content from our paid services. …TO RECEIVE REMAINING 98% INCLUDING MANY ATTRACTIVE INVESTMENT OPPORTUNITIES, TAKE A FREE TRIAL TO PAID SERVICES.

See also  WEEKLY STOCK MARKET DIGEST: PRUDENT INVESTORS HEEDING EXTREME SENTIMENT

Please click here to take advantage of a FREE  30 day trial.

Check out our enviable performance in both bull and bear markets.

Subscribe to 'Generate Wealth'

Free Forever

More To Explore

30 Day Free Trial

Cancel within 30 days and you owe nothing

When you take a FREE 30 day trial, you get access to powerful techniques used by billionaires and hedge funds to grow richer. You can continue to use these powerful techniques to grow richer even if you cancel your subscription. You come out ahead by subscribing no matter how you look at it.

A fortune is to be made from AI stocks.
Get the list of 18 AI stocks to grab your share of the profits — no cost to you.

A fortune is to be made from AI stocks.

Get the list of 18 AI stocks to grab your share of the profits.

AI is a $1 Trillion Market

Making A Fortune
In Artificial Intelligence

Golden Age of Artificial Intelligence