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  1. #21
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    Talking Buy American. I Am.

    http://www.nytimes.com/2008/10/17/op...17buffett.html

    THE financial world is a mess, both in the United States and abroad. Its problems, moreover, have been leaking into the general economy, and the leaks are now turning into a gusher. In the near term, unemployment will rise, business activity will falter and headlines will continue to be scary.

    So ... I’ve been buying American stocks. This is my personal account I’m talking about, in which I previously owned nothing but United States government bonds. (This description leaves aside my Berkshire Hathaway holdings, which are all committed to philanthropy.) If prices keep looking attractive, my non-Berkshire net worth will soon be 100 percent in United States equities.

    Why?

    A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors. To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions. But fears regarding the long-term prosperity of the nation’s many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.

    Let me be clear on one point: I can’t predict the short-term movements of the stock market. I haven’t the faintest idea as to whether stocks will be higher or lower a month — or a year — from now. What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up. So if you wait for the robins, spring will be over.

    A little history here: During the Depression, the Dow hit its low, 41, on July 8, 1932. Economic conditions, though, kept deteriorating until Franklin D. Roosevelt took office in March 1933. By that time, the market had already advanced 30 percent. Or think back to the early days of World War II, when things were going badly for the United States in Europe and the Pacific. The market hit bottom in April 1942, well before Allied fortunes turned. Again, in the early 1980s, the time to buy stocks was when inflation raged and the economy was in the tank. In short, bad news is an investor’s best friend. It lets you buy a slice of America’s future at a marked-down price.

    Over the long term, the stock market news will be good. In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.

    You might think it would have been impossible for an investor to lose money during a century marked by such an extraordinary gain. But some investors did. The hapless ones bought stocks only when they felt comfort in doing so and then proceeded to sell when the headlines made them queasy.

    Today people who hold cash equivalents feel comfortable. They shouldn’t. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value. Indeed, the policies that government will follow in its efforts to alleviate the current crisis will probably prove inflationary and therefore accelerate declines in the real value of cash accounts.

    Equities will almost certainly outperform cash over the next decade, probably by a substantial degree. Those investors who cling now to cash are betting they can efficiently time their move away from it later. In waiting for the comfort of good news, they are ignoring Wayne Gretzky’s advice: “I skate to where the puck is going to be, not to where it has been.”

    I don’t like to opine on the stock market, and again I emphasize that I have no idea what the market will do in the short term. Nevertheless, I’ll follow the lead of a restaurant that opened in an empty bank building and then advertised: “Put your mouth where your money was.” Today my money and my mouth both say equities.

    Warren E. Buffett is the chief executive of Berkshire Hathaway, a diversified holding company.

  2. #22
    F.A.B. Huang Chung's Avatar
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    Default Guess who on CNBC gets to interview Warren tonight?

    Yep, Warren sure is one smart guy.......



  3. #23
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    Default

    Buffett faces a grilling from investors

    By Francesco Guerrera and Justin Baer in New York

    Published: April 30 2009 19:21 | Last updated: April 30 2009 19:21

    Warren Buffett will be under pressure at Saturday’s annual gathering of faithful shareholders to explain his worst year ever, with the usually adoring crowd set to probe the legendary investor on his bargain-hunting strategy, succession plans and views of the crisis.

    Buffett-watchers say this year’s meeting of shareholders in Berkshire Hathaway, his candies-to-insurance group, will depart from the usual pattern of deferential questions and folksy answers and witness some criticism of the billionaire investor.

    “The hard questions will be asked this year,” said James Altucher, a hedge fund manager and author of Trade Like Warren Buffett. “There will be people who always stand by him and others who will ask: ‘Have you lost your way?’”.

    Berkshire was unavailable for comment. But people close to Mr Buffett say he has been preparing for tough questions from some of the 25,000-plus investors expected to converge on his native Omaha to attend an event he once called “the Woodstock for capitalists”.

    Mr Buffett’s supporters say his long-term record remains stellar and vastly superior to the stock market and that, even during a tough 2008, Berkshire’s shares outperformed major indices and most fund managers.

    But criticism of the “Sage of Omaha” would be particularly unwelcome at a time when the 78-year-old investor is looking to preserve his legacy and pick a successor for the roles of both chief executive and chief investment officer.

    As the financial crisis and the global economic slowdown raged, Mr Buffett stayed true to his “value investing” credo, buying stakes in blue chips such as Goldman Sachs and General Electric whose shares had slumped. But his motto of being “fearful when others are greedy, and greedy when others are fearful” could not prevent Berkshire from losing 9.6 per cent in book value per share – the metric that Mr Buffett uses to measure his performance – in 2008. That was Berkshire’s worst performance since 1965 when Mr Buffett bought a struggling textile-maker and turned it into a wildly successful investment vehicle.

    “I think he took his eye off the ball a bit,” said Douglas Kass, a general partner at the hedge fund Seabreeze Partners Management, who reversed his short position on Berkshire recently and began buying the stock. “He was encumbered by a buy-and-hold strategy which to some degree ignored the carnage that was going on.”

    Mr Buffett has admitted doing “some dumb things” last year, such as buying shares in the oil group ConocoPhillips when crude prices were at a peak and purchasing stock in two small Irish banks whose price later plummeted.

    His call to retail investors to buy shares in US companies, made in a New York Times editorial in October, has also not worked out. The S&P 500 is about 6 per cent below levels seen when Mr Buffett wrote the article. But he has always maintained he is unconcerned by short-term market movements because of his long-term outlook.

    His performance in 2008, for example, was hit by his large exposure to the ailing US financial sector, which includes stakes in American Express and Wells Fargo. Yet the recent rally in banking stocks appears to have helped Berkshire, whose shares have risen more than 30 per cent since their lows in March.

  4. #24
    Super Investor
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    Default

    Quote Originally Posted by Huang Chung View Post
    Yep, Warren sure is one smart guy.......


    I thought Buffett's simple messages had real clarity in this video.

    http://www.cnbc.com/id/39724884
    h2

  5. #25
    Advanced Member Valuegrowth's Avatar
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    Default

    http://www.nasdaq.com/article/did-yo...sight-cm217377

    Did You Listen To Warren Buffett's Advice In October 2008? - Real Time Insight



  6. #26

  7. #27
    Membaa
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    Default

    Superb. Thanks for the reminder, all too often it is easy to focus on the now and the immediate future when in fact investing is the long game, with an insightful eye for value.

    Appreciate your post MW,

    BAA

    Quote Originally Posted by MARKETWINNER View Post
    http://www.nasdaq.com/article/did-yo...sight-cm217377

    Did You Listen To Warren Buffett's Advice In October 2008? - Real Time Insight



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