What’s Important in the Financial World (11/15/2011) Buffett Holdings, Un-Occupy Wall St.

Germany’s mixed bag. Two key economic figures out of Germany offset one another. GDP grew 0.5% in the third quarter. The number was up 2.6% from the same quarter last year. The advance was a relief. Germany’s economic health is still the cornerstone of the eurozone’s financial prospects. However, the ZEW Center for European Economic Research reported that investor confidence in Germany fell to a three-year  low in November. That would put it back to recession level numbers. Clearly, the financial community is concerned the sovereign debt crisis will swamp the financial strength of even Germany. Since confidence is often a self-fulfilling prophecy, the forward-looking number is more important that the Q3 economic success.

LinkedIn executives to sell shares. LinkedIn (NYSE: LNKD) executives want to sell a relatively large portion of their shares. This adds to the pressure on the stock . The company has already said it will offer more shares to the public. It also is clear that venture capitalists who invested in the LinkedIn over the years would like to make money on their positions too. Bain says it plans to sell a portion of its position along with LinkedIn executives. It is only natural that management would act similarly in its self-interest. That will not keep other investors from concern about dilution. And, why would executives sell shares now, if LinkedIn’s prospects are so bright? Expect LinkedIn’s stock to suffer because of the announcement.

The headline news about Warren Buffett was that he bought $10.6 billion in IBM (NYSE: IBM) shares. Just as important were other additions and dilutions he made to his portfolio. These became public as Berkshire Hathaway (NYSE: BRK.A, BRK.B), the company Buffett runs, released at list of its third-quarter holdings. Buffett increased his holdings in Wells Fargo (NYSE: WFC), a sign he is not as concerned about a new banking crisis as many bank analysts are. He moved even further into the financial sector with a new investment in Visa (NYSE: V). He also took new positions in military hardware provider General Dynamics (NYSE: GD), DirecTV (NYSE: DTV) and Intel (NYSE: INTC). All of these seem very conservative. Yet, Buffett has usually invested that way.

Occupy Wall Street forced out. For some reason, the financial headlines were dominated by the decision of New York City to use police to remove Occupy Wall Street protestors from the city’s Zuccotti Park. The story was the top headline in the Wall Street Journal and the New York Times. There is a great deal of evidence that the mass of people in their tents had disrupted that sales of businesses in the area. The large number of people in the park presented a public health hazard. Perhaps most important, the protestors were not successful enough for their removal by police to cause a ground swell of support. “Occupy” protestors are being moved out of their quarters by police in other cities. The movement ended almost before it began.

Douglas A. McIntyre