Warren Buffett once again sent a buying (and selling) shockwave across the community. The disclosed purchase of a Barrick Gold (GOLD) position caught many by surprise although I don't think Doug Kass was shocked and three months ago on Twitter @QTRResearch nailed it. Both reminders there are financial resources of merit outside CNBC, but I digress.
The move by Buffett is a huge teaching moment for traders and investors. In fact, it reminds me of the time Buffett started a position in Apple (AAPL) . Many never thought that would happen either based on previous Buffett comments, but here's the lesson:
You have the right to change your opinion.
Economic conditions change, investment opportunities evolve, and risk versus reward fluctuates. Investors and traders must be willing to adapt. What works today may not work tomorrow. That's why it is incredibly difficult to be a perma-anything. Virtually zero about the markets and securities within them is static.
It's the same reason we talk about never hating nor loving a stock. You can hate Tesla (TSLA) all you want but shorting it has been murder. You can hate the Fed but you can't deny the psychological influence it has had. You can love IBM (IBM) all you want but there have been thousands of better places to put your money over the last several years.
We must be willing to change.
I've seen a bit of a change in regards to Robinhood. Although we still have many names running large amounts each day, the retraction of Robinhood holder sizes has changed the game for some. I've watched traders that have made a killing over the past several months buying every low float, low dollar, high volume breakout. Suddenly, it's not working like a hot knife through butter any longer. Sure, some still work, but people seem almost shocked at having to take a loss if they were one of the first buyers. The change is beginning to happen there too.
The big takeaway isn't to mimic what Buffett is buying, but what he is doing. He's adjusting to what he believes are evolving opportunities that swing outside his traditional scope. For many, the changes are subtle. In this instance, it appears as jarring as the Apple move years ago. It's one that makes everyone notice. While I'm not chasing gold here, I am taking notice of the move. Miners are now on my radar and I'll be watching for a pullback.