Greece: Fear of a default in Greece once again was the biggest news for US stocks today. The consensus is now that a default is imminent and it is a matter of when, not if it happens.
Volatility: Recent market volatility has been very high. Although the market has not yet breached the August low (it is close), the volatility started in late August has continued. In the past six days, the median trading range on the S&P has been 2.8 percent.
Buffett: Berkshire Hathaway said today that Ted Weschler will help oversee investments upon Mr. Buffett’s retirement. Ted manages Peninsula Capital and told investors he will be closing the fund. As of June 30, Peninsula held roughly $2 billion in assets according to filings. It is hard to say exactly how the fund has done through the recent downturn, but its three largest holdings, which appear to be more than half the fund, are down over 20% on average. The S&P is down about 13% during that time. That said, this is a concentrated, buy and hold portfolio where large drawdowns are to be expected. The most interesting thing about this story is that Ted Weschler was twice the winner of the annual power lunch with Warren Buffett. CNBC implied this is where the two first met. The two lunches are said to have cost more than $5 million combined. It sounds like Weschler made another good investment with these lunches.
Market Today: The market was quite weak for most of today on the aforementioned Greek and European debt fears. In the late afternoon, news services announced that China is buying Italian debt. From that point forward, the market rallied roughly 2.3% and closed up on the day. It may be better for the markets for Greece to just default and to get past that fear and move forward.
Have a good day! Brent
