03 November 2009

Buffett's BNI Buy Baffles Beta Bears

This morning the Beta Bears thought they had survived the BDK and BNI takeouts. But as the day progressed the Beta Bulls did some thinking and concluded that Buffett's buy of BNI was a vote of confidence for cyclical stocks. And they saw that will SWK hooking up with BDK there was hope still for rent-seeking market dominators. SWK ended up 10%! Nothing good for the rest of us but BDK owners are happy. As are BNI holders thank you very much.

Back to the story the Bulls won VMO by 101bps, PMO by 203bps, beta by 130 bps and small cap by 54 bps. Sometimes this reversal is just noise like last Thursday. Sometimes it marks the new regime. A regime of dominators....if you want to buy a tool that is.

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