The market is down 6. The SFE Futures were down 14 this morning.

The Dow Jones closed up 20 overnight. The Dow closed up for a third day as the Federal Reserve minutes boosted expectations of further economic stimulus after they revealed that the FOMC haven’t ruled out QE3 or other stimulus measures. The consumer confidence index fell more than expected. Bill Gross the manager of PIMCO (the world’s largest bond fund), has admitted he might have got it wrong by betting against US treasuries earlier this year and has been buying Treasuries (bonds) since. Metals were up on the LME, the oil price put on $1.63 at $88.90 and the Aussie dollar appreciated to 106.77c from 106.75c. Gold up $38 to $1829.

Today’s news and results … last day of reporting season.

  • The ACCC says that its concerns over the structural separation of Telstra’s (TLS) retail and wholesale arms should not delay the rollout of the NBN. The ACCC yesterday released a discussion paper seeking comments on Telstra’s structural separation and draft migration plan. Most brokers maintain their positive recommendation on the stock despite yesterday’s developments. TLS up 4c to 303c.
  • Commonwealth Bank (CBA) has offered $373m, or $1.40 per share, to acquire Count Financial (COU). Count’s board made a unanimous recommendation that shareholders vote in favour of the offer. COU has been placed in a trading halt. CBA down 34c to 4759c and COU is unchanged at 142c.
  • Beach Energy (BPT) reported a full year net loss of $97.5m, down from a $33.1m profit a year earlier.  The loss was due mainly to a large impairment charge on the Basker Manta Gummy gas project offshore Victoria. Full year underlying profit was $41m, up 7% on the prior corresponding period. BPT up 2.44%.
  • According to The Wall Street Journal, ANZ Bank (ANZ) is in early talks about buying Aozora Bank, a midsized Japanese lender. ANZ is aiming to get 25%-30% of their profit from their Asian Pacific, European and US operations by 2017. ANZ down 10c to 2008c.
  • Only three months after Whitehaven Coal (WHC) pulled down the ‘For Sale’ sign, majority shareholders and US private equity groups First Reserve and AMCI have sold shares worth $390m. 65m shares crossed at 600c this morning when the price was 630c. WHC down 5% to 598c.
  • Murchison Metals (MMX) has delayed the release of its results by more than three weeks until September 21. MMX down 1c to 60.5c.
  • Galaxy Resources (GXY) announced they have received debt funding interest for their Battery Project. They have been approached by 5 Chinese banks. GXY up 3.5% to 74c.

YOU ARE NOT BUFFETT — You wouldn’t have made money buying Goldman Sachs when Buffett did in 2008, or GE when Buffett did in 2008 and the implication is that you will struggle to make money buying Bank of America when Buffett did (last Thursday).

The reason … Buffett bought billions of dollars worth of stock on preferred terms, in the case of GE and Goldman Sachs he bought an issue of preferred stock tailored for him…with a 10% yield. He has done the same thing buying $5bn of prefs in Bank of America.

If you just followed him in on the ordinary stock of GE and Goldman, whereas Buffett made 30% on the two, the share prices of GE and Goldman are down 34.2% and 14%.

The message is, you can’t do what Buffett does and buying the Bank of America because he did (it went up 25% on the day he bought in last week) is no more likely to make you money than if he didn’t buy it. His buying is not a judgement on an ordinary stock that holds any weight….it is a judgement on their level of distress which dictates that he can get preferred terms on an injection of cash. Basically he was buying a pref (not the stock)…and pref means ‘preferred’ which he is and you’re not. Take a free 5 day trial at Marcus Today to read more.

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