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Falling oil price and actions of Warren Buffett

Should we still buy shares today? One latest prediction for oil price is that it may reach as low as US$10 per barrel. It is still falling. The stock markets have been falling and the S&P 500 is at its lowest point since 2004! Yes, this is already lower than even the mortgage crisis in 2008. What does this mean, really? Well to one man, Warren Buffet it means opportunity. He is increasing his stake in oil refiner Philips 66. He is doing this at a time when crude oil prices are at a 12-year low. Currently, Berkshire Hathaway Inc already owns 12.3 percent or 65.68 million shares worth US$5.21 billion. Note that US$5.21 billion is a huge amount whichever way we look at it.
Crude oil prices have been falling since June 2014 as there is a huge supply amidst a anaemic economic growth in the world. Even the mighty China is struggling to grow faster. The US economy has showed some positive signs though and the Federal Reserve decided to up the rate by 0.25 percent last year. Some analysts are predicting more upward adjustments in 2016. I think everyone would have noted that the year of 2016 started with a BIG fall in China’s stock market. Ringgit has of course fallen lower from its short recovery towards the end of 2015. Oil prices ended up at US$29.42 per barrel at the close of market for this week.
This summary basically tells us that whether markets go up or down, opportunities open up for some who has done some homework. Of course, this ‘bet’ against the tide may backfire but it is definitely a calculated risk. I just spoke to a good friend about two stocks in particular which has not moved downwards despite such a bad run for BURSA. Well, perhaps I should start to view more stocks instead of just that few selected ones. I have also started to put more time and effort into viewing homes, both in Klang Valley and this weekend, in Ipoh. Whether I buy or not is another decision but the correct decision now is to assess all the potential opportunities. Remember, U.M.N.O.  Uncertainty Means New Opportunities. Happy thinking, believing and doing.
written on 16 Jan 2016
Next suggested article: Best time ever or worst time ever for property market 2016

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of kopiandproperty.com He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. kopiandproperty.com is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.

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