Warren Buffett Doubts Euro Strength, Ackman Explains J.C.Penney Buy: Trader Talk

Warren Buffett expresses doubt on the euro, Bill Ackman explains his bet on J.C. Penney in this, TheStreet's rundown on trader chatter.
Author:
Publish date:

NEW YORK (

TheStreet

) -

Warren Buffett expresses doubt on the euro and Bill Ackman explains his bet on J.C. Penney in this, TheStreet's rundown on trader chatter.

Warren Buffett: Euro Faces Real Challenge

Billionaire investor

Warren Buffett

is cautious in his outlook for the Euro, even as the currency made a strong rebound in the third quarter.

At a conference outside Tel Aviv, Buffett said that the euro's strength would still be tested.

"There's a real challenge when you try to get a large group of countries with different cultures, different attitudes toward fiscal policy, to share a common currency... I think it's going to be an interesting one to watch," Buffett said in previously recorded remarks, according to

Bloomberg.

Concerns about the euro zone were at a peak in early 2010 when Greece threatened to default on its debt. The sovereign debt risk in the region has highlighted some of the disadvantages of sharing a currency.

While the U.S. can print money to repay its debt -- although those measures tend to have their own repercussions -- countries that have adopted the Euro cannot operate an independent monetary policy. The European Central Bank sets policy for the euro.

Think you can pick stocks better than Buffett, Paulson, Soros, Icahn, or Pickens? Prove it and win! >>

Bill Ackman Addresses His J.C. Penney Buy

Hedge fund manager

Bill Ackman

recently

snapped up a 16.8% stake in

J.C. Penney

(JCP) - Get Report

, making him the retailer's largest shareholder.

At a value investing conference in New York on Monday, Ackman explained why he thought the company was a good bet.

"I thought it was a very high-quality asset base. Their real estate portfolio is better than the competition. Their balance sheet is very strong, and they're close to having no net debt by the end of this year," the fund manager said, according to

Barrons

. "The General Growth bankruptcy will tell you a lot about what JCP owns. When the market values the stock at 3.5 times EBITDA and a lot of the earnings come from shopping mall real estate, it's incredibly cheap," he said.

-- Written by Shanthi Venkataraman in New York

>To contact the writer of this article, click here:

Shanthi Venkataraman

.

>To follow the writer on Twitter, go to

http://twitter.com/shavenk

.

>To submit a news tip, send an email to:

tips@thestreet.com

.

RELATED STORIES:

>>Bill Ackman Buys Big Stake in J.C. Penney

>>George Soros Ups Stake In Plains Exploration

>>Icahn Ups Stake In Lawson Software

>>George Soros Buys More in Exar

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.